Tennessee paycheck calculator for hourly and salary pay 2025

Calculating paycheck in Tennessee

Here’s a step-by-step guide to walk you through the paycheck calculator:

1. Fill in the employee’s details 

This includes just two items: your employee’s name and the state where they live. These details will help the tool calculate some of the employee’s local taxes.

2. Add the employee’s pay information

You should see fields that say pay type, pay rate, hours worked, pay date, and pay period. Start with “pay type” and select hourly or salary from the dropdown menu. 

If the employee is hourly, input their hourly wage under “pay rate” and fill in the number of hours they worked that pay period. If the employee worked more than 40 hours and accrued overtime, record 40 here and save the rest for “additional pay.”

If the employee is salaried, both the “pay rate” and “hours worked” fields will disappear. Instead, you’ll need to know how much the employee makes each pay period. You’ll put that into the field labeled “amount.” 

Then, select the pay date and the employee’s pay frequency—for example, if you pay them weekly or every two weeks. 

3. Input any additional pay the employee receives

If the employee is salaried, you will only see two fields: bonus and commission. Fill in those amounts, if applicable.

If the employee is hourly, you should see four fields: overtime worked, bonus, commission, and salary. This is your opportunity to add any additional pay they should receive this pay period. If the employee earned overtime, input the number of overtime hours they worked. The tool calculates overtime pay using time and a half.

4. Fill in the employee’s federal tax information

This includes the employee’s filing status, number of allowances, and additional withholdings. You should be able to glean this information from the employee’s W-4 form. If you don’t yet have the employee’s W-4, the payroll calculator can fill in tax rates to help you create a semi-accurate paycheck estimate.

5. Fill in the employee’s state tax information

Here, you’ll enter the same information on allowances, filing status, and additional withholdings. However, since Tennessee has no state income tax, this section will not affect net pay.

6. Calculate the employee’s paycheck

To see an estimate of the employee’s earnings for the pay period, select “calculate check.”

Tennessee income tax rate

Tennessee is one of seven U.S. states that doesn’t tax individual wage income at all. However, Tennessee has a 1% to 2% tax rate on income earned from interest and dividends. There are also no local county or municipal personal income taxes in Tennessee.

However, even without state withholdings, businesses need to learn how to do payroll because other deductions influence workers’ net pay. 

Tennessee tax withholdings

Tennessee does have one state payroll tax. If an employer has even just one employee in Tennessee, they must pay state unemployment taxes, regardless of the length of employment or payroll amount.

This tax is levied solely on employers in Tennessee. There is no employee contribution. Employers pay a rate of 0.01% to 10% on the first $7,000 per employee per year, up to a maximum of $700.

For specific information on state unemployment insurance taxes in Tennessee and how and where to register your business, consult our payroll tax map.

Also, even though Tennessee has no state income tax withholdings, employers still have to consider federal tax withholdings. Money taken out for federal taxes goes toward federal income taxes, Social Security, and Medicare. An employee’s tax bracket depends on their gross income, excluding pre-tax deductions.

Employers are also responsible for making FUTA (Federal Unemployment Tax Act) payments. This is a federal unemployment tax and is separate from Tennessee’s state unemployment tax. It’s based on the wages you pay to employees but is NOT deducted from their wages. It must be paid by the business itself.

Opportunities for deductions on Tennessee paychecks

Aside from standard federal deductions, there are other common payroll deductions that you may need to apply if you offer benefits. Since employers subtract this income before taxes, these deductions can move employees to a lower tax bracket. 

Some common pre-tax deductions include: 

• Health insurance 
• Dental and vision benefits 
• Health savings account (HSA) 
• Wellness benefits
• Disability insurance 
• Life insurance 
• 401(k) contributions 
• Court-ordered garnishments, including child support, alimony, back taxes, and overdue loans 
• Commuter benefits

Note: Our calculator only accounts for federal and state deductions. Pre-tax deductions do not factor into our paycheck estimates. If you have questions about these deductions, talk to an accountant or payroll specialist. 

Frequently asked questions

What are payroll taxes?

Payroll taxes are taxes levied on employers and employees to fund various state and federal programs, including Social Security, Medicare, unemployment benefits, education, defense, construction, and infrastructure maintenance such as roads, parks, and first responder services. Employers must deduct employee contributions from their paychecks and send tax funds to the proper authorities.

How do I calculate taxes from my paycheck in Tennessee? 

Even though Tennessee has no state income tax, follow the steps carefully in Calculating paycheck in Tennessee to make sure your calculation reflects all the relevant factors. (Also, if you’re an employee with a new pay rate, you can use this tool as a take-home pay calculator to estimate how much money you’ll actually be depositing each pay period.)

How can QuickBooks make Tennessee payroll easier?

QuickBooks has multiple features to make Tennessee payroll easier:

• Automation reduces tedious manual entries and frees up your time.
• QuickBooks calculates, files, and pays your payroll taxes for you—100% accurate tax calculations guaranteed.
• With tax penalty protection, you’re covered up to $25,000 if you receive a penalty for any reason.
• Your team can get paid fast with same-day direct deposit while you hold onto your cash longer.
• Time tracking can improve timesheet accuracy and streamline approvals.
• Seamless integration of processes can save you hours every week.
• With the Quickbooks Workforce app, your team can track their own hours and view their pay info and W-2s.

Flexible payroll plans for your business

QuickBooks offers flexible payroll plans tailored to your business needs. Whether you want to streamline payday, accurately track time, manage HR tasks, or provide benefits to your team, there's a payroll solution for your Tennessee business. 

Existing QuickBooks users can easily add payroll functionalities and leverage the QuickBooks Workforce app for enhanced employee management. Plus, with seamless time tracking and invoicing features, QuickBooks empowers you to stay organized and efficient. Explore QuickBooks payroll today.