Your Ultimate Guide to Tennessee Payroll

Employers must navigate various regulations and requirements to ensure proper payroll withholding in each US state. This guide introduces what employers must pay and withhold from payroll in Tennessee, including unemployment insurance and workers’ compensation. 

Paying unemployment insurance (UI) in Tennessee

On top of withholding federal taxes such as Medicare and Social Security taxes, you are also responsible for withholding and paying certain Tennessee state taxes from your employee’s payroll. These taxes together are referred to as employer payroll taxes or payroll withholding. One of the taxes you must pay is unemployment insurance (UI). 

Unemployment insurance is a national program administered by the US Department of Labor. The program provides temporary payments to people who are unemployed through no fault of their own. You can manage your Tennessee unemployment insurance through the online portal.

Refer to the Tennessee Department of Labor and Workforce Development for more information on paying your unemployment insurance. 

Tennessee state unemployment insurance (SUI) tax rates

Tennessee unemployment insurance tax rates are determined annually based on the employer's experience rating and the balance of the state’s unemployment trust fund. Employers can access their specific rates and make payments through the Tennessee Department of Labor and Workforce Development's online portal.

Employers are responsible for paying unemployment insurance contributions based on these rates. These contributions help support the unemployment fund, which provides benefits to eligible employees.

Personal income tax in Tennessee

Tennessee does not have any personal income tax; therefore, you do not have to withhold any personal income tax after hiring your first employee in the state.

Paying your Tennessee workers’ compensation

On top of paying your Tennessee payroll taxes, you will also need to pay for workers’ compensation. Unlike most other states, you will not need to purchase workers’ compensation in Tennessee unless you are in construction or have more than five employees.

Workers’ compensation is insurance for an employee’s injury while performing their job. Employers should purchase workers’ compensation from a qualified commercial carrier in the state. Tennessee State provides information online to help you find a qualified commercial carrier.

Employers should verify that their workers’ compensation insurance complies with the state’s regulations for workers’ compensation.

Payroll tax due dates in Tennessee

Employers must adhere to payroll tax due dates to remain compliant and avoid penalties. Tennessee has specific deadlines for filing unemployment insurance taxes and other required payments:

Quarterly tax filings

Employers are typically required to file unemployment insurance tax reports quarterly. The due dates fall at the end of the month following each quarter:

Annual reconciliation

An annual reconciliation of all payroll taxes must be submitted by February 28th of the following year. For more information on filing deadlines, visit the Tennessee Department of Labor and Workforce Development - Filing Deadlines.

Payroll tax due dates in Tennessee

Submission process for payroll taxes in Tennessee

Employers are required to file unemployment insurance tax forms electronically using Tennessee’s online portal. This system ensures efficient and accurate filing. Employers should use forms and guidelines provided by the Tennessee Department of Labor and Workforce Development for all payroll-related submissions.

Tennessee Online Portal allows employers to register, file, and pay their payroll taxes electronically, supporting efficient and accurate tax filing and payments.

Simplify US payroll tax compliance with Deel

While this guide provides essential information on Tennessee payroll taxes, payroll compliance and state requirements extend beyond what is covered above. To streamline the process and ensure full compliance, companies can turn to Deel.

Deel offers a comprehensive solution for managing US and international payroll, including payments, taxes, worker classification, and more. Speak with an expert today to see how you can streamline your US payroll processes and ensure compliance with state regulations.