Payroll and Benefits Guide - United States - Tennessee

United States - Tennessee


United States Dollar



Employer Taxes

8.27% – 33.65%

Date Format


Fiscal Year

1 Jan – 31 Dec

Fun Facts

Nashville’s Centennial Park is home to The Parthenon, an exact reproduction of the Greek city of Athens’ original Parthenon.

The oldest registered distillery in the United States, the Jack Daniel’s Distillery, is located in Lynchburg, Tennessee.

The most visited national park in the US is the Great Smoky Mountains National Park, which is situated in Tennessee and North Carolina.

The site of the world’s only freshwater pearl farm is in the state.

The origins of blues music genre is in Tennessee, and home to major artists like B.B. King and Memphis Minnie.

The longest river system in the state is the 652-mile Tennessee River.



Employee Payroll Tax

Contribution TypeRate
FICA Social Security (federal)6.20%
FICA Medicare (federal)1.45%
Additional tax on earnings over 200,000 USD0.90%

Employer Payroll Tax

Contribution TypeRate
Unemployment Insurance (state)0.01% – 10.00%
Unemployment- New Employer (state)0.01% – 10.00%
FICA Social Security (federal)6.20%
The FUTA (Federal Unemployment Tax Act)0.60% – 6.00%/td>
FICA Medicare (federal)1.45%


Payroll Cycle

In Tennessee, employees are paid either bi-weekly or monthly.

13th Salary

There are no laws requiring 13th salary.

Work Hours and Week

The average workweek consists of 40 hours, or 8 hours per day from Mondays to Fridays.


The rate for overtime hours is 150% of the usual salary rate. If an employee is scheduled to work on weekends or off days, no extra compensation is needed

However, if an employer requests an employee to work on these days due to unexpected circumstances, overtime pay is paid at a rate equal to 150% of the regular compensation rate.



Paid Time Off

There are no state statutes requiring paid time off in Tennessee. Employers typically choose whether to provide paid or unpaid vacation time, though. This must be specified in the collective bargaining agreements and adhere to employment legislation.

Public Holidays

There are 13 public holidays in Tennessee.

Sick Days

If an employee has worked for their employer for at least a year, put in at least 1,250 hours in the previous year, and worked at a location where the company employs 50 or more people within 75 miles, they are eligible for FMLA.

The FMLA grants some employees up to 12 weeks of unpaid, job-protected leave annually for specific family and medical reasons (maternity leave, serious illnesses, or if the employee has to care for a spouse or child).

Maternity Leave

Both leaves are under FMLA-granted sick leave. They are given twelve working weeks of leave during the first year of the baby’s life.

Paternity Leave

Both leaves are under FMLA-granted sick leave. They are given twelve working weeks of leave during the first year of the baby’s life.

Other Leave

Employees are entitled to unpaid leave when they are summoned to court either as a juror or a witness given they can provide summons to their employer.

All employees who are registered voters must be given paid leave to participate in any local or national election.

Any employees called to battle by the military must be given leave and rein-stated on the same or similar job on their return.


Termination Process

Except in mass dismissals or as specified in an employment contract or collective bargaining agreement, U.S. law does not need a formal notice period to end an employment relationship; employment is “at will.”

If there is no illegal or significant discri-mination on the basis of a protected class, either the employer or the emplo-yee may terminate the employment relationship without providing notice or a reason.

Notice Period

Most employees work “at-will,” which means that any party may end the employment arrangement at any time and without cause. Although there isn’t a formal notice period, the standard is two weeks.

Employers are required by law to give affected employees 60 days’ notice in situations involving mass dismissals.

Severance Pay

Employers are not compelled to provide severance pay unless specifically stated otherwise in an employment contract or collective bargaining agreement. If an employer offers severance, the clauses must be included in the employment contract and both parties must consent to them.

Probation Period

Probation Period

Regarding probationary terms, the law contains no restrictions. However, it is standard practice for employers to schedule performance reviews following a 90-day first period of employment.


No foreign nationals are allowed to work in the US without either a work visa or permanent resident status.

The potential employee must receive a visa stamp from a US embassy or consulate when the petition is authorized (Canadian citizens are excluded from this requirement). An employer must petition the U.S. government in order to obtain a temporary work visa. Immigration and Citizenship Services (USCIS). The visa application must include an authorized petition.

All companies are required to confirm that every person they hire is qualified to work in the United States.


Tennessee has a state tax of 7.00%, but cities and counties may add up to an additional 2.75% if deemed necessary.