Tennessee employer payroll tax calculator 2026
Hiring in Tennessee? New Tennessee employers pay 2.7% state unemployment tax on the first $7,000 of each employee's wages, on top of the federal 6.2% Social Security, 1.45% Medicare and FUTA. For a $60,000 employee that's about $4,821 a year in employer payroll taxes — $189.00 of it to Tennessee.
| Wages | $60,000.00 |
| Employer Social Security | $3,720.00 |
| Employer Medicare | $870.00 |
| FUTA (0.6% on $7,000.00) | $42.00 |
| State unemployment insurance (SUI) (2.7% on $7,000.00) | $189.00 |
| Employer payroll taxes | $4,821.00 |
| Total cost before benefits | $64,821.00 |
Per two-week payroll: $2,493.12. Add health insurance, retirement and workers' compensation in the cost of an employee calculator.
Tennessee unemployment tax (SUTA) for new employers
New employers pay 2.7% (new manufacturers get a rate based on their sector).
After a few years the state assigns your own rate based on your layoff history; enter it in the calculator once you have it. Your rate also earns the usual federal FUTA credit: pay Tennessee on time and FUTA is 0.6% on the first $7,000. If Tennessee ends up a credit-reduction state for the year (the Department of Labor lists them each November), FUTA is higher.
Other Tennessee payroll programs
Tennessee has no state paid-leave or disability program with an employer share, and no other broad state payroll tax on employers.
What an employee costs in Tennessee
| Salary | Federal employer taxes | Tennessee employer taxes | Total cost | Taxes as % of pay |
|---|---|---|---|---|
| $40,000 | $3,102.00 | $189.00 | $43,291.00 | 8.2% |
| $60,000 | $4,632.00 | $189.00 | $64,821.00 | 8.0% |
| $100,000 | $7,692.00 | $189.00 | $107,881.00 | 7.9% |
A year, before benefits. New-employer rates, 5 employees, full FUTA credit.
How much does a $40,000 employee cost in Tennessee?
About $43,291 a year: the $40,000 salary plus $3,102.00 of federal employer taxes and $189.00 of Tennessee employer taxes, before benefits. That's $1,665.04 per two-week payroll.
How much does a $60,000 employee cost in Tennessee?
About $64,821 a year: the $60,000 salary plus $4,632.00 of federal employer taxes and $189.00 of Tennessee employer taxes, before benefits. That's $2,493.12 per two-week payroll.
How much does a $100,000 employee cost in Tennessee?
About $107,881 a year: the $100,000 salary plus $7,692.00 of federal employer taxes and $189.00 of Tennessee employer taxes, before benefits. That's $4,149.27 per two-week payroll.
Both halves of one paycheck
On a $60,000 salary paid every two weeks, the employee sees $9,610 a year taken out of pay — federal income tax, their own Social Security and Medicare — and takes home $50,390 (single filer, standard W-4). That money is withheld from their wages, not an extra cost to you. On top of the salary, you pay $4,821.00 of employer taxes. See the employee's side line by line in the Tennessee paycheck calculator.
More employer tools
Cost of an employee (benefits and cost per hour) · Employer payroll tax calculator (all states) · Employer payroll taxes guide
Tennessee figures checked 2026-09-28 against the state's own publications. Planning estimate, not a payroll return: your rate notice and the state's rules decide the final amount.
Sources
- Tennessee LWD — How is my premium rate determined? — new employer premium rate for all other industries is 2.7% (checked 2026-09-28)
- Tennessee LWD — UI tax rates — 2026 taxable wage base $7,000
- IRS Publication 15 (2026), Employer's Tax Guide — 2026 employer Social Security and Medicare rates and wage limits; FUTA
- IRS — FUTA credit reduction — 6.0% FUTA on the first $7,000; usual 5.4% credit; credit-reduction states lose part of the credit
- U.S. Department of Labor — FUTA credit reductions — the list of credit-reduction states for each year (checked 2026-09-28)
Questions
What is the Tennessee SUTA rate for new employers?
2.7% in 2026, on the first $7,000 of each employee's wages. New employers pay 2.7% (new manufacturers get a rate based on their sector).
What is the Tennessee unemployment tax wage base for 2026?
$7,000 per employee per year.
How much does it cost to employ someone for $60,000 in Tennessee?
About $64,821 a year before benefits: $4,632.00 of federal employer taxes and $189.00 for Tennessee, at the new-employer rate with 5 employees.