Tennessee Paycheck Calculator: Estimate Your Take-Home Pay After Taxes

Tennessee Paycheck Calculator: See What Gets Withheld When There’s No Income Tax

From auto plant floors in Chattanooga to overnight shifts in the warehouses and logistics hubs that keep Memphis humming, a lot of Tennesseans earn their living on hourly and shift-based work. Add in Nashville’s mix of healthcare administration, hotels, restaurants, and entertainment jobs, and you get a pretty wide range of pay scales and schedules across the state, which makes it especially helpful to know how each paycheck actually gets sliced up before it hits your bank account.

Tennessee’s job market has grown steadily in recent years. Nonfarm employment rose 1.7% from 2021 to 2022, adding 53,000 jobs to reach 3.24 million total, which is among the Southeast’s strongest gains. That means more people than ever are getting paid under Tennessee’s specific set of payroll rules, and understanding those rules can make it easier to budget, plan for taxes, and spot any errors on your paystub.

Here’s a walkthrough of a typical Tennessee paycheck so you can see what is happening under the hood. Learn how your money goes from gross pay, through federal income tax withholding, Social Security and Medicare deductions, plus any benefits or retirement contributions — all the way down to your final take-home amount. Along the way, you will see how Tennessee’s no-state-income-tax affects what appears on your stub compared with workers in many other states.

Disclaimer: This page is for informational purposes only and is not tax advice. Tax rules can change, and individual situations vary. For personal tax questions, consider speaking with a qualified tax professional.

How your Tennessee paycheck is calculated: A breakdown

Tennessee has no state income tax on wages, which means workers here are not subject to state income tax withholding from their paychecks. What does come out is federal income tax and FICA. While the list of deductions is shorter than in many other states, these federal deductions apply to every Tennessee worker the same way they apply nationwide. Understanding each one individually makes the full picture easier to read on your pay stub.

Part 1: Your gross pay before deductions

Gross pay is total earnings before any deductions are taken out. For hourly workers, that means regular hours plus any overtime. For salaried workers, it is a fixed amount each pay period.

Tennessee follows the federal minimum wage of $7.25 per hour, a rate unchanged since 2009. The state has no independent minimum wage law and defaults to the federal rate under the Fair Labor Standards Act (FLSA).

There are no regional or city-specific minimum wage variations. State law explicitly preempts local governments from setting higher rates, so Nashville and Memphis have no separate minimum wage ordinance. Overtime follows the federal 40-hour-per-week standard under the FLSA.

Your taxable income is your gross pay minus any pre-tax deductions, such as retirement contributions or health savings account deposits.

Part 2: Federal withholding and its impacts

Because Tennessee has no state income tax, the W-4 is the only withholding form you will complete. There is no state equivalent. The W-4 tells your employer how much federal income tax to withhold from each paycheck. Your filing status, income level, number of dependents, any additional income sources, and any extra withholding you request all factor into that calculation. Federal withholding uses progressive brackets and is typically the largest single deduction on your paycheck.

Part 3: Social Security and Medicare (FICA) withholding

Because Tennessee has no state income tax, FICA — the combined Social Security and Medicare taxes — is one of the most significant deductions you will see on your pay stub.

• Social Security: 6.2% on covered wages, with the employer matching the same 6.2%.
• Medicare: 1.45% on all covered wages, with the employer matching the same 1.45%.

Employers must withhold an Additional Medicare Tax of 0.9% once wages paid by that employer exceed $200,000 in a calendar year, regardless of filing status. Employees reconcile any difference between withholding and their filing-status-based liability on their tax return. This surcharge is not employer-matched.

Part 4: No state income tax and what that means for your paycheck

Tennessee does not levy a state income tax on wages. Workers in Tennessee are not subject to state income tax withholding from their paychecks. The state previously taxed certain interest and dividend income through the Hall Tax, but that was fully repealed effective January 1, 2021, so it no longer applies to any individual income.

What remains in the list of deductions is federal income tax and FICA. These two categories cover everything that comes out on the federal side. Tennessee also has no local income-tax withholding on wages. Local governments can levy other taxes, such as local sales and property taxes, but they do not add a local income-tax deduction to employee paychecks. Workers in cities like Nashville, Memphis, Knoxville, and Chattanooga therefore face the same paycheck withholding categories.

For more information on Tennessee’s tax structure, visit the Tennessee Department of Revenue.

Where does your income fall in Tennessee? Median income overview

Median household income is a useful benchmark for understanding where most workers in a state actually land, rather than where averages are pulled by higher earners at the top.

4 ways your take-home pay can change

Why does take-home pay feel different in Tennessee?

For Tennessee, a state with no income tax (state or local level), the list of deductions is shorter than in many other states. Here’s a look at how that shakes out compared to some other states.

• A Tennessee worker earning $60,000 annually pays federal income tax and FICA.
• A Georgia worker earning the same $60,000 pays federal income tax, FICA, and an estimated $2,491 in Georgia state income tax (calculated as $60,000 minus the $12,000 standard deduction, multiplied by the 5.19% flat rate).
• An Arizona worker at the same salary would pay federal income tax, FICA, and approximately $1,500 in Arizona state income tax at the state’s 2.5% flat rate.

Note: Estimated taxes are illustrative only, assuming the tax year, filing status, and standard deductions/credits. All figures are estimates and may vary based on individual circumstances and time of filing.

While not seeing a state income tax line on your pay stub may seem favorable by comparison, it doesn’t automatically mean more purchasing power. The federal deductions still apply, and what the paycheck buys depends heavily on where in the state you live. Nashville and its suburbs carry higher costs than the rest of the state, while Memphis, Knoxville, and Chattanooga are noticeably more affordable in housing, even though the minimum wage and withholding rules are identical across the state.

Lower withholding does not equal a lower overall cost of living. Tennessee’s combined state and local sales tax averages roughly 9.61%, among the highest in the nation, with a 7% state sales tax plus local add-ons of up to 2.75%. That is not a payroll deduction, but it does affect how far each dollar stretches at the register.