Tennessee Salary & Tax Calculator
Tennessee has no state income tax on wages, and even repealed its old tax on interest and dividends in 2021. See your real take-home pay below.
Tennessee is one of nine states that levy no personal income tax on wages or salaries. It went a step further than most no-tax states in 2021 by fully phasing out the "Hall Tax," which had previously applied a 6% tax on interest and dividend income for high earners — meaning investors and retirees in Tennessee now keep all of that income tax-free at the state level as well. Every state bordering Tennessee charges some form of income tax: Kentucky and Missouri tax in the 4-5% range, Georgia and Mississippi around 4.7-5.4%, and Virginia climbs as high as 5.75% for top earners. That makes Tennessee a clear outlier in a region where income tax is otherwise standard. Nashville's growth as a business and music-industry hub, combined with this tax advantage, has drawn a steady stream of relocating workers and companies. No Tennessee city or county adds a local income tax on top of the state's zero rate, so a Tennessee paycheck is reduced only by federal withholding and FICA. Use the calculator below with a rate that reflects just those two categories to estimate your true net pay.
*Estimates only, not financial or tax advice. Actual withholding may vary — consult a tax professional for precise figures.
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Full Salary & Tax Calculator🏆 Tennessee Paycheck Basics
What actually comes out of a Tennessee paycheck, and why it's less than in most Southeastern states.
How it Works
With no state income tax and no remaining Hall Tax, only federal withholding and FICA reduce your Tennessee paycheck — enter a rate reflecting just those two.
The Formula
Net Pay = Gross Pay - (Federal Tax + FICA + Pre-tax Deductions). No state tax line is subtracted because Tennessee's rate is 0%.
Pro Tip
If you have investment income, remember the Hall Tax is fully gone — dividends and interest that used to be taxed up to 6% are now state-tax-free in Tennessee.
Frequently Asked Questions
Does Tennessee tax wages? +
No. Tennessee has no tax on wages or salaries. The state also fully repealed the old Hall Tax on interest and dividend income in 2021, so investment income is untaxed at the state level too.
How does Tennessee compare to its neighbors? +
Tennessee is surrounded by states that all tax income to some degree: Kentucky (flat 4%), Georgia (flat 5.39%), North Carolina (flat 4.5%), Virginia (up to 5.75%), Alabama (up to 5%), Mississippi (flat 4.7%), Arkansas (up to 3.9%), and Missouri (up to 4.95%). Tennessee undercuts all eight of its bordering states.
Are there local income taxes in Tennessee cities like Nashville or Memphis? +
No. Neither Nashville, Memphis, Knoxville, nor any other Tennessee municipality imposes a local payroll or income tax. Local governments fund services mainly through sales and property taxes instead.
What deductions still apply to a Tennessee paycheck? +
Federal income tax withholding and FICA (6.2% Social Security, 1.45% Medicare) still apply, along with any pre-tax deductions you elect such as health insurance premiums or 401(k) contributions.
Why has Tennessee become popular for remote workers? +
The combination of no state income tax, a relatively low cost of living compared to coastal cities, and growing metro hubs like Nashville has made Tennessee attractive to remote employees who can relocate freely and keep more of every paycheck.