Tax & Paycheck Calculators
Tennessee Paycheck Tax Calculator
Tennessee has zero state income tax — genuinely, on every type of income. Here's your real take-home pay, and the sales-tax tradeoff that funds the state instead.
Calculate your Tennessee take-home pay
Federal income tax and FICA only — there's no state layer to add.
No state tax line to model — Tennessee genuinely charges $0 state income tax on wages, retirement income, and investment income alike.
Why there's no state tax line in this calculator
Tennessee is one of nine states with no state individual income tax — and unlike some of those states, this isn't a recent or partial exemption. Tennessee never taxed wages or salaries at the state level. The one income-type tax Tennessee did have, the Hall Income Tax (a levy on interest and dividend income only, dating to 1929), was phased down gradually starting in 2016 and fully repealed effective January 1, 2021. Since then, Tennessee has had zero state income tax on any type of income: wages, salaries, capital gains, dividends, interest, retirement distributions, and Social Security are all state-tax-free.
The real tradeoff: one of the highest sales tax rates in the country
Tennessee also taxes groceries — at a reduced 4% state rate rather than the full 7%, but this still puts a real burden on food purchases that many other states exempt entirely. For a household with meaningful taxable spending, this sales tax load can offset a real portion of the income tax savings, especially for lower and middle-income households who spend a larger share of income on taxable goods.
Our Reverse Sales Tax Calculator can help you back out exactly how much sales tax you're paying on a given purchase, and our Sales Tax, Vehicle Tax, and Transfer Tax by State guide covers how Tennessee's rate compares to the rest of the country in more depth.
What this means for your actual paycheck
- Your take-home pay reflects only federal tax and FICA — no state withholding line will ever appear on a Tennessee paycheck.
- Retirees benefit significantly, since pension income, 401(k)/IRA distributions, and Social Security are all state-tax-free.
- The sales tax burden is regressive — it falls harder, as a share of income, on lower earners than on high earners, which is worth factoring into any state-to-state cost comparison beyond just the headline "no income tax" appeal.
Tennessee's Hall Tax repeal timeline (fully eliminated January 1, 2021) and current sales tax rates cross-verified against multiple independent 2026 state tax guides. This is a planning estimate — property tax and local sales tax rates vary by county and city within Tennessee.
Frequently asked questions
Before you estimate your Tennessee paycheck.
Does Tennessee have a state income tax?
No. Tennessee has zero state income tax on wages, salaries, retirement income, capital gains, dividends, and interest. The Hall Income Tax, which previously taxed interest and dividends only (never wages), was fully repealed effective January 1, 2021.
What was the Hall Tax?
A Tennessee tax dating to 1929 that applied only to interest and dividend income, never to wages or salaries. It was phased down gradually from 2016 through 2020 and eliminated entirely starting with the 2021 tax year.
How does Tennessee fund state government without an income tax?
Primarily through sales tax. Tennessee's combined state and local sales tax rate is among the highest in the country, typically 9.25% to 9.75% depending on the city and county.
Does Tennessee tax groceries?
Yes, but at a reduced rate — 4% state sales tax on groceries versus the standard 7% rate, plus applicable local additions.
Is Tennessee a good state for retirees, tax-wise?
Generally yes — Social Security, pensions, and retirement account distributions are all free of state income tax, which is a meaningful advantage for retirees living primarily on fixed or investment income.