How Tennessee taxes a paycheck
Tennessee has never taxed wages, and its constitution was amended in 2014 to prohibit any future income tax on earned income. From 1929 to 2020 it levied the Hall tax on interest and dividends at up to 6%; that was phased down from 2016 and eliminated for tax year 2021. No Tennessee city or county levies an income tax. The state relies on a 7% sales tax, among the highest in the country and reaching 9.75% with local additions, plus business and franchise taxes.
The calculator shows the two federal lines only: income tax under the 2026 brackets after the $16,100 standard deduction, and FICA at 7.65% up to $184,500 of wages. Tennessee has no employee-funded disability or leave programme.
How much taxes are taken out of paychecks in Tennessee?
On a $60,000 salary in 2026, a single filer in Tennessee pays about $5,020 in federal income tax and $4,590 in Social Security and Medicare, a total of $9,610, and nothing to the state. That leaves about $50,390 a year in Tennessee, or $1,938 per biweekly paycheck.
At $150,000 the federal share is about $38,600, an effective rate of 25.7%, and that is the whole deduction from a Tennessee paycheck.
Tennessee compared with its neighbours
Tennessee borders eight states and all of them tax wages. On a $60,000 single salary the state tax is $0 in Tennessee against about $1,980 in Kentucky, $2,640 in Virginia, $1,890 in North Carolina, $2,490 in Georgia, $2,480 in Alabama, $1,670 in Mississippi, $2,130 in Arkansas and $1,650 in Missouri. Several of those add local taxes on top.
The Memphis, Chattanooga and Bristol metros all straddle state lines, and in each the Tennessee side has the lower income tax by the full amount of the neighbour's rate. The guide to states with no income tax covers the sales tax Tennessee charges instead.
Does Tennessee have state income tax?
No. Tennessee has no state income tax on wages, so a Tennessee paycheck has only federal income tax, Social Security and Medicare withheld, and no Tennessee city or county levies an income tax either. Tennessee funds itself largely through sales tax, which at 7% state plus up to 2.75% local is among the highest combined rates in the country at an average of about 9.5%, together with property taxes and business taxes.
Tennessee residents file no state income tax return; the Hall tax return that some filed until 2020 no longer exists. The state constitution was amended in 2014 to prohibit any tax on earned income, and the Hall tax on investment income was repealed for 2021. Tennessee residents who work in Kentucky, Virginia, Georgia or any other neighbouring state owe that state's tax on the wages earned there, with nothing in Tennessee to credit it against.