Tennessee Payroll Tax Requirements A comprehensive guide to Tennessee’s payroll tax laws and regulations to help you stay compliant. 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Run Unlimited Payrolls Accurate Payroll & Tax Calculations Secure Portal for Employee & Contractor Generate Pay Stubs Instantly Includes Bonus & Off-Cycle Payroll Includes Bonus & Retirement Plan Get Started Now Employer's Payroll Tax & Filing Requirements for the State of Tennessee (TN) Employers running a business in Tennessee must understand the payroll responsibilities. Tennessee is one of the states that does not require a specific minimum wage. Instead, it follows the federal minimum wage rate. Below is a comprehensive guide to help you understand and manage all essential information regarding Tennessee. Applicable Tennessee Taxes In Tennessee, employers are responsible for a few key state and federal payroll taxes. Here’s a quick overview of the taxes in Tennessee. While Tennessee does not have a state income tax for individuals, businesses must still manage the Unemployment Tax. At the federal level, employers must withhold and pay Federal Income Tax, Social Security, and Medicare (FICA) taxes. Employers are also responsible for the Federal Unemployment Tax (FUTA). Understanding these obligations is essential for maintaining compliance and avoiding penalties. Register for TN state unemployment tax on your own Tennessee tax agency: Tennessee Department of Labor & Workforce Development - Unemployment tax. To report and pay unemployment insurance in Tennessee, employers must register with the Tennessee Department of Labor & Workforce Development. Steps to Register with the Tennessee Department of Labor & Workforce Development Register by mail To report the SUI taxes, you must register with the Department of Labor and Workforce Development. Employers must fill out the Report to determine status from (LB-0441) and mail it to EmployerStaus.Rates@tn.gov. If the Tennessee Department of Labor decides you need to pay unemployment tax, they will send you an eight-digit EIN (XXXX-XXX X) and unemployment tax rate. Tennessee New Hire Reporting All Tennessee employers are required to report newly hired or rehired employees to the Tennessee New Hire Reporting Center. This information helps the state enforce child support orders and track employment for tax purposes. Who needs to report? All employers with atleast one employee in Tennessee must report new hire details to the Tennessee New Hire Reporting Center. What information must be reported? Employers of Tennessee must report the newly hired and rehired employees. Here is the information required to report newly hired employees to the TN Department of Labor and Workforce Development. Employer information: Name Address Federal Employer Identification Number (FEIN) Employee information: Full name Address Social Security Number (SSN) Date of hire Date of birth (optional but recommended) How to report new hires in Tennessee? To report newly hired employees, follow the steps given below. 1. Online (Recommended) Use the Tennessee New Hire Reporting Portal to submit employee information. 2. Mail Complete the New Hire Reporting Form and send it to: Tennessee New Hire Reporting Center P.O. Box 198880 Nashville, TN 37219-8880 3. Fax Fax completed Tennessee New Hire Reporting Form to (615) 741-1252. What are the penalties for not filing a New hire report in Tennessee? Employers in Tennessee must report all newly hired or rehired employees, as well as independent contractors, to the Tennessee New Hire Reporting Center within 20 days of the employee’s start date. Here are the penalties for not filing new hire report on time. $25 per person for each new hire, rehire, or independent contractor that is not reported, reported late, or reported with incomplete information. $500 per person if the failure to report is due to a conspiracy between the employer and the employee or contractor to avoid reporting. Tennessee State Payroll Tax Requirements Tennessee is one of the few states that does not have a state income tax, making payroll administration relatively straightforward for employers. However, businesses are still responsible for complying with other state-specific regulations, including reemployment tax (unemployment insurance), minimum wage laws, and new hire reporting. This section outlines the key state tax requirements that every Tennessee employer must follow to ensure compliance. State Income tax Tennessee does not impose a state income tax, which means employers are not required to withhold state income tax from employee paychecks. This makes payroll processing simpler compared to many other states. State Unemployment Tax State unemployment taxes are state-level payroll taxes that employers pay to fund unemployment benefits for eligible workers who lose their jobs through no fault of their own. Who is liable? Tennessee employers are liable for SUI taxes if they meet the following conditions: Paid $1500 in wages during a calendar quarter or; Had at least one Tennessee employee working for any part of the week, for 20 or more different weeks during a calendar year. Tennessee State Unemployment Tax Rate Employers in Tennessee must pay State Unemployment Insurance (SUI) taxes to support the state’s unemployment benefit program. The following table outlines the applicable SUI tax rates in Tennessee: Tennessee State Unemployment Tax Rate Taxable Wage Base $7,000 Tax Rate Range 0.1% to 5.4% New Employer Rate 2.7% Tennessee Minimum Wage Requirements Tennessee is one of the states that doesn’t have its own minimum wage law. However, it follows the federal rates. Employers must ensure they meet the minimum wage for all employees, including a separate, reduced rate for tipped workers—as long as tips make up the difference. Wage Type Tennessee Rates (per hour) Federal Rates (per hour) Minimum wage $7.25 $7.25 Tipped Minimum Wage $2.13 $2.13 Actual Tip Credit $5.12 $5.12 Overtime Regulations Employees in Tennessee are entitled to overtime pay at 1.5 times their regular rate for hours worked over 40 in a workweek, unless they are classified as exempt. Exemption: Certain employees are exempt from overtime if they meet both the salary and duties tests under the FLSA. In Tennessee, this typically includes: Executive employees Administrative employees Professional employees To qualify for exemption, these employees must earn at least $684 per week ($35,568 annually) on a salaried basis and perform the specific job functions defined by the FLSA. Tennessee Termination Report Tennessee requires employers to report terminated employees to the Tennessee Department of Labor and Workforce Development (TDLWD) using the Employer Separation Notice (LB-0489), primarily to keep state records up to date for child support enforcement and other wage-related programs. Who needs to report? All Tennessee employers who pay wages subject to Tennessee unemployment insurance must report terminated employees. This includes full-time, part-time, and seasonal employees. When is the deadline for the termination report? Employers must provide this notice within 24 hours of separation (voluntary or involuntary) when an employee leaves work for any reason. How to Report Termination in Tennessee 1. Online (Recommended) Use the Tennessee Department of Labor & Workforce Development (TDLWD) Employer Portal to submit the termination report electronically. 2. Mail Complete the Employer Separation Notice (LB-0489) and mail it to: Tennessee Department of Labor & Workforce Development Unemployment Insurance Division 220 French Landing Drive Nashville, TN 37243 3. Fax You can also fax the completed form to: (615) 253-3584. Tennessee State Tax Payments Tennessee State Unemployment Tax Payments In Tennessee, employers must submit State Unemployment Insurance (SUI) tax payments also called Unemployment Tax, to the Tennessee Department of Labor & Workforce Development (TDLWD) on a quarterly basis. Quarterly filers – Payments are due by the last day of the month following the end of each calendar quarter: Quarter Filing Deadline Quarter 1 (January - March) April 30 Quarter 2 (April - June) July 31 Quarter 3 (July - September) October 31 Quarter 4 (October - December) January 31 Methods to deposit State unemployment tax withholding taxes To deposit your state Unemployment taxes, you can use various payment methods, which include: 1. Online (Recommended) Use the Tennessee Department of Labor & Workforce Development (TDLWD) Employer Portal to make electronic payments. 2. Mail You can mail a check or money order along with your SUI payment voucher to the TDLWD: Tennessee Department of Labor & Workforce Development Unemployment Insurance Division P.O. Box 305219 Nashville, TN 37230-5219. Tennessee State Filings Quarterly State Unemployment Tax Filings Employers of Tennessee must report the unemployment insurance to the TN Department of Labor and Workforce Development. Form LB-0851 (Employers Quarterly Wage Report): In Tennessee, employers must report unemployment taxes using the Form LB-0851 wage report. It is used to report individual employees' wages. Employers covered under Tennessee’s Unemployment Insurance (UI) law must submit this form by the due date. Deadline: The due date for filing Form LB-0851 is the last day of the month following the end of the calendar quarter. Quarter Filing Deadline Quarter 1 (January - March) April 30 Quarter 2 (April - June) July 31 Quarter 3 (July - September) October 31 Quarter 4 (October - December) January 31 Form LB-0456 (Quarterly Premium Report): Form LB-0456 is a quarterly premium wage report used to calculate and report total unemployment taxes owed by the employer. Employers covered under Tennessee’s Unemployment Insurance must submit this form before the due date. Deadline: Unemployment taxes are due by the last day of the month following the end of the calendar quarter. Quarter Filing Deadline Quarter 1 (January - March) April 30 Quarter 2 (April - June) July 31 Quarter 3 (July - September) October 31 Quarter 4 (October - December) January 31 Run payroll for free with TaxBandits. With TaxBandits, you can process payroll in less than 5 minutes with no limits. Everything is automated, including federal and state filings and payments. Explore More Success Starts with TaxBandits The Smart Business Owners Choice Create a Free Account Tennessee State Filing Form 1099 Filing Form W-2 Filing Payroll Requirements