Tennessee, unlike many other states, does not have a state income tax. However, employers and employees in Tennessee are still subject to various federal and state payroll taxes. This calculator focuses on the key state-level payroll tax applicable in Tennessee: the unemployment tax.
Tennessee Unemployment Tax (T.U.C.A.)
The primary state-level payroll tax in Tennessee is the Unemployment Tax, managed by the Tennessee Department of Labor & Workforce Development. This tax is levied on employers to fund unemployment benefits for eligible workers who lose their jobs through no fault of their own.
Employer Responsibility: Unemployment tax is primarily an employer-paid tax. The rate is experience-based, meaning it can fluctuate depending on the employer's history of unemployment claims.
Taxable Wage Base: There is a limit on the amount of wages subject to unemployment tax each year. For Tennessee, this taxable wage base is set by law and can change annually. As of recent years, it has been $9,000 per employee per calendar year.
New Employer Rates: New employers in Tennessee are typically assigned a standard rate during their first few years of operation until they establish an employment record.
Federal Payroll Taxes
In addition to state-specific taxes, all employers and employees in Tennessee are subject to federal payroll taxes, which are deducted from employee wages and paid by employers.
Social Security Tax: A portion of earnings is withheld for Social Security benefits. The employee contributes 6.2% of their gross wages up to an annual wage limit ($168,600 for 2024). Employers match this contribution.
Medicare Tax: Another portion of earnings is withheld for Medicare. The employee contributes 1.45% of their gross wages with no wage limit. Employers also match this contribution. Additional Medicare Tax may apply for higher earners.
Federal Unemployment Tax (FUTA): This is an employer-paid tax that funds federal unemployment programs. The FUTA rate is generally 6.0%, but employers often receive a credit of up to 5.4% if they pay state unemployment taxes in full and on time, resulting in a net FUTA tax of 0.6% on the first $7,000 of wages per employee annually.
Self-Employed Individuals
If you are self-employed, you are responsible for paying both the employer and employee portions of Social Security and Medicare taxes. This is collectively known as "self-employment tax." This tax is calculated on your net earnings from self-employment.
How the Calculator Works
This calculator provides an estimate primarily focusing on the Tennessee Unemployment Tax, assuming a standard rate for illustrative purposes, and the Federal Unemployment Tax (FUTA), as these are the most direct payroll taxes impacting employer costs in Tennessee. It also calculates the employee's share of Social Security and Medicare taxes.
Calculations:
Tennessee Unemployment Tax (Employer Portion Estimate): This calculator uses a representative employer tax rate (e.g., 2.7% for established employers, though actual rates vary significantly) applied to the taxable wage base ($9,000 annually). For simplicity, it prorates the annual taxable wage base based on the pay frequency. *Note: Actual rates are determined by the TN Dept. of Labor & Workforce Development and are experience-rated.*
Federal Unemployment Tax (FUTA – Employer Portion): Calculated at the net rate of 0.6% on the first $7,000 of annual wages per employee.
Social Security Tax (Employee Portion): 6.2% on gross wages up to the annual Social Security wage base ($168,600 for 2024).
Medicare Tax (Employee Portion): 1.45% on all gross wages.
Total Estimated Payroll Tax: Sum of estimated TN Unemployment Tax, FUTA, Social Security, and Medicare taxes.
Disclaimer: This calculator is for informational purposes only and does not constitute tax advice. Actual tax liabilities depend on specific employment situations, current tax laws, individual wage bases, and your unique state unemployment tax rate assigned by the Tennessee Department of Labor & Workforce Development. Consult with a qualified tax professional for precise calculations and advice.
function calculateTennesseePayrollTax() {
var grossWages = parseFloat(document.getElementById("grossWages").value);
var payFrequency = document.getElementById("payFrequency").value;
var employeeStatus = document.getElementById("employeeStatus").value;
var resultValueElement = document.getElementById("result-value");
var resultDisclaimerElement = document.getElementById("result-disclaimer");
// Clear previous results and disclaimer
resultValueElement.innerText = "$0.00";
resultDisclaimerElement.innerText = "";
// — Input Validation —
if (isNaN(grossWages) || grossWages < 0) {
resultDisclaimerElement.innerText = "Please enter a valid positive number for Gross Wages.";
return;
}
// — Constants & Rates (as of recent data, subject to change) —
var TN_UNEMPLOYMENT_TAXABLE_WAGE_BASE_ANNUAL = 9000; // Subject to change annually
var FEDERAL_UNEMPLOYMENT_TAXABLE_WAGE_BASE_ANNUAL = 7000; // For FUTA
var SOCIAL_SECURITY_WAGE_BASE_ANNUAL = 168600; // For 2024, subject to change annually
var SOCIAL_SECURITY_RATE = 0.062; // Employee portion
var MEDICARE_RATE = 0.0145; // Employee portion
var NET_FUTA_RATE = 0.006; // 0.6% after state unemployment tax credit
var ESTIMATED_TN_UNEMPLOYMENT_RATE = 0.027; // Representative rate for established employers (Actual rates vary per employer)
// — Calculate Annual Wages for Base Calculations —
var annualGrossWages = 0;
switch (payFrequency) {
case 'weekly':
annualGrossWages = grossWages * 52;
break;
case 'biweekly':
annualGrossWages = grossWages * 26;
break;
case 'semimonthly':
annualGrossWages = grossWages * 24;
break;
case 'monthly':
annualGrossWages = grossWages * 12;
break;
default:
resultDisclaimerElement.innerText = "Invalid pay frequency selected.";
return;
}
// — Calculations —
var estimatedTnUnemploymentTax = 0;
var federalUnemploymentTax = 0;
var socialSecurityTax = 0;
var medicareTax = 0;
// Tennessee Unemployment Tax (Estimate for Employer)
if (employeeStatus === 'employee') {
// Estimate based on prorated wage base for the period, capped by annual base
var tnTaxableWagesThisPeriod = Math.min(grossWages, TN_UNEMPLOYMENT_TAXABLE_WAGE_BASE_ANNUAL / getPeriodsPerYear(payFrequency));
estimatedTnUnemploymentTax = tnTaxableWagesThisPeriod * ESTIMATED_TN_UNEMPLOYMENT_RATE;
}
// Federal Unemployment Tax (FUTA – Employer Portion)
if (employeeStatus === 'employee') {
// Calculate based on the taxable wage base for FUTA
var futaTaxableWagesThisPeriod = Math.min(grossWages, FEDERAL_UNEMPLOYMENT_TAXABLE_WAGE_BASE_ANNUAL / getPeriodsPerYear(payFrequency));
federalUnemploymentTax = futaTaxableWagesThisPeriod * NET_FUTA_RATE;
}
// Social Security Tax (Employee Portion)
var ssTaxableWagesThisPeriod = Math.min(grossWages, SOCIAL_SECURITY_WAGE_BASE_ANNUAL / getPeriodsPerYear(payFrequency));
socialSecurityTax = ssTaxableWagesThisPeriod * SOCIAL_SECURITY_RATE;
// Medicare Tax (Employee Portion)
// No wage base limit for Medicare
var medicareTaxableWagesThisPeriod = grossWages;
medicareTax = medicareTaxableWagesThisPeriod * MEDICARE_RATE;
// Self-Employment Tax Calculation (if applicable)
var selfEmploymentTax = 0;
if (employeeStatus === 'selfEmployed') {
// Self-employment tax is calculated on 92.35% of net earnings
var netEarnings = grossWages; // For simplicity, assuming grossWages represents net earnings before SE tax
var taxableForSE = netEarnings * 0.9235;
// Social Security portion of SE tax (up to SS wage base)
var ssTaxableForSE = Math.min(taxableForSE, SOCIAL_SECURITY_WAGE_BASE_ANNUAL);
var ssPortionSE = ssTaxableForSE * (SOCIAL_SECURITY_RATE * 2); // Employer + Employee rate
// Medicare portion of SE tax (no wage base limit)
var medicarePortionSE = taxableForSE * (MEDICARE_RATE * 2); // Employer + Employee rate
selfEmploymentTax = ssPortionSE + medicarePortionSE;
// Reset other taxes if self-employed as SE tax covers SS/Medicare
estimatedTnUnemploymentTax = 0; // TN Unemployment is employer tax, not applicable directly for SE in this calculation context
federalUnemploymentTax = 0; // FUTA is employer tax
socialSecurityTax = 0; // Covered by SE tax
medicareTax = 0; // Covered by SE tax
}
// — Total Calculation —
var totalEstimatedTax = estimatedTnUnemploymentTax + federalUnemploymentTax + socialSecurityTax + medicareTax + selfEmploymentTax;
// Format and display result
resultValueElement.innerText = "$" + totalEstimatedTax.toFixed(2);
// Add specific disclaimer notes
var disclaimerText = "Estimated values. ";
if (employeeStatus === 'employee') {
disclaimerText += "Includes estimated employer TN Unemployment Tax, FUTA, and employee Social Security/Medicare. ";
disclaimerText += "Your actual TN Unemployment rate may differ. ";
} else if (employeeStatus === 'selfEmployed') {
disclaimerText += "Calculated Self-Employment Tax (covers Social Security and Medicare). ";
disclaimerText += "TN and Federal Unemployment Taxes are generally employer responsibilities and not directly paid by self-employed individuals in this manner. ";
}
disclaimerText += "Taxable wage bases and rates are subject to change. Consult a tax professional.";
resultDisclaimerElement.innerText = disclaimerText;
}
function getPeriodsPerYear(frequency) {
switch (frequency) {
case 'weekly': return 52;
case 'biweekly': return 26;
case 'semimonthly': return 24;
case 'monthly': return 12;
default: return 1; // Should not happen with select options
}
}
// Initialize with default values on load if needed, or just rely on user input
// Example: Call calculateTennesseePayrollTax() once on load if you want to show initial $0.00 or default calc