Tennessee Take-Home Pay Calculator

Tennessee does not tax wages, and a 2014 constitutional amendment prohibits the state and local governments from levying a tax on payroll or earned personal income. The Hall income tax, which once reached interest and dividends, was phased down and fully repealed starting with 2021. Today a Tennessee resident files no state income tax return at all.

The state funds its budget mainly through sales tax, which applies to groceries at a reduced rate and stacks with local option sales taxes set by counties and cities, plus franchise and excise taxes on businesses. A few licensed professions, including attorneys, still pay an annual professional privilege tax, but it is a flat license fee rather than a tax withheld from pay.

A single filer earning $75,000 in Nashville, Memphis, Knoxville, or Chattanooga pays only federal tax and FICA. Federal tax starts by subtracting the $16,100 standard deduction, leaving $58,900 taxable, which is taxed $12,400 at 10%, $38,000 at 12%, and $8,500 at 22%, for $7,670.

Payroll taxes add $4,650 for Social Security and $1,088 for Medicare, so a Tennessee worker's total tax bill is $13,408. The rest, $61,592 a year or roughly $5,133 a month, is take-home pay. The Tennessee $75,000 salary page shows the same figures by pay period.

The federal 22% bracket is the marginal rate at this salary, and it is the only income tax rate that applies to a raise. Each extra $1,000 of pay costs federal tax and FICA, with nothing added for the state.

Tennessee cities and counties cannot tax wages, so a Memphis paycheck and a Johnson City paycheck have the same deductions. Tennessee also has no state disability or paid family leave contribution, and unemployment insurance is paid by employers, not workers.

The deductions that remain are federal income tax, Social Security at 6.2% up to $184,500 of wages, Medicare at 1.45%, and the additional 0.9% Medicare tax on wages above $200,000. Anything else is an elective benefit.

There is no Tennessee withholding certificate. Your federal W-4 alone sets withholding, so a two-earner household or a worker with a side business should use Step 2 or Step 4(c) to keep federal tax on track. Service and hospitality workers in Nashville and Gatlinburg can enter expected qualified tips in Step 4(b) to reflect the new federal tips deduction during the year.

Tennessee borders eight states, and cross-border commuting is common. A Tennessee resident who works in Kentucky, Virginia, Georgia, or Mississippi owes that state's nonresident income tax on those wages, with no Tennessee credit to offset it, since Tennessee has no income tax. Clarksville residents with a Kentucky job site, Bristol, Tennessee residents who work across State Street in Bristol, Virginia, and Chattanooga commuters into north Georgia all face this.

The reverse commute is the bargain. Residents of Mississippi, Arkansas, and Georgia who work in Memphis or Chattanooga owe no Tennessee tax on those wages, though their home state still taxes them as residents.

Tennessee ties for first among the 50 states and DC for take-home pay at $75,000 and $150,000. Against its eight neighbors at $75,000, a single filer keeps $2,268 more than in Mississippi, $2,287 more than in Arkansas, $2,484 more than in North Carolina, $2,507 more than in Kentucky, $2,534 more than in Missouri, $2,994 more than in Georgia, $3,127 more than in Alabama, and $3,498 more than in Virginia.

Those gaps grow with income because every neighbor taxes wages at 3.5% or more on the margin. See Georgia vs Tennessee or Kentucky vs Tennessee for side-by-side paychecks.