Payroll and Benefits Guide United States – Tennessee
Last updated: Apr 04, 2023
Employer Payroll Contributions
|0.01%-10.00% (maximum taxable wages is 7,000 USD)||Unemployment Insurance (state)|
|0.01%-10.00% (maximum taxable wages is 7,000 USD)||Unemployment- New Employer (state)|
|6.20% (maximum taxable wages is 160,200 USD)||FICA Social Security (federal)|
|1.45%||FICA Medicare (federal)|
|0.60% – 6.00% (maximum taxable wages is 7,000 USD)||The FUTA (Federal Unemployment Tax Act) tax rate is 6.0% with a taxable wage base of 7,000 USD. However, if states operate their unemployment insurance programs in compliance with federal law then the FUTA tax is reduced (credit) by 5.4% to 0.6%.|
|8.27%-33.65%||Total Employment Cost|
Employee Payroll Contributions
|7.65% – 8.55%||Total Employee Cost|
|6.20% (Maximum taxable wages is 160,200.00 USD)||FICA Social Security (Federal)|
|1.45%||FICA Medicare (Federal)|
|0.90%||Additional tax on earnings over 200,000 USD (High-income earners also pay an additional 0.90% in Medicare taxes)|
Employee Income Tax
No state income tax.
|Federal Employee Income Tax|
|Federal Tax – Singles|
|10.00%||Up to 11,000 USD|
|12.00%||11,001 USD to 44,725 USD|
|22.00%||44,726 USD to 95,375 USD|
|24.00%||95,376 USD to 182,100 USD|
|32.00%||182,101 USD to 231.250 USD|
|35.00%||231,251 USD to 578,125 USD|
|37.00%||578,126 USD or more|
|Federal Tax – Married, filing jointly|
|10.00%||Up to 22,000 USD|
|12.00%||22,001 USD to 89,450 USD|
|22.00%||89,451 USD to 190,750 USD|
|24.00%||190,751 USD to 364,200 USD|
|32.00%||364,201 USD to 462,500 USD|
|35.00%||462,501 USD to 693,750 USD|
|37.00%||693,751 USD or more|
|Federal Tax – Heads of Households|
|10.00%||Up to 15,700 USD|
|12.00%||15,701 USD to 59,850 USD|
|22.00%||59,851 USD to 95,350 USD|
|24.00%||95,351 USD to 182,100 USD|
|32.00%||182,101 USD to 231,250 USD|
|35.00%||231,251 USD to 578,100 USD|
|37.00%||578,101 USD or more|
|Standard Deduction and Personal Exemption|
|27,700.00 USD||Married Filing Jointly|
|20,800.00 USD||Head of Household|
Tennessee does not have a state minimum wage law in place; therefore, the federal minimum wage is used; for 2023, this is 7.25 USD.
In Tennessee, employees are paid monthly or semi-monthly.
There is no legislation for 13th-month payments in Tennessee.
In Tennessee, the working week is a maximum of 40 hours per week, 8 hours per day.
Tennessee adheres to the Fair Labour Standards Act (FLSA), and work in excess of 40 hours per week is considered overtime and paid at the rate of 150% of the regular pay. If employees are scheduled to work on weekends or rest days, no additional payment is required. However, should an employer request an employee to work in exceptional circumstances on these days, then overtime is paid at the rate of 150% of the regular pay.
Paid Time Off
Tennessee does not have any state statute governing the amount and payment of vacation time; however, it is common for employers to decide whether to offer paid or unpaid vacation leave. This must comply with employment law and must be stipulated in the collective bargaining agreements.
There are 13 official holidays.
It is common for an employer to follow the Family and Medical Leave Act (FMLA) which provides certain employees with up to 12 weeks of unpaid, job-protected leave per year for certain family and medical reasons (maternity leave, serious illnesses or if the employee needs to care for a spouse or child).
Employees are eligible for FMLA if they have worked for their employer for at least one year, completed a minimum of 1,250 hours over the past year, and worked at a location where the company employs 50 or more employees within 75 miles.
FMLA eligible employees are entitled to:
- Twelve working weeks of leave in any one year for a child’s birth and to care for the newborn child within one year of birth.
- The employee may be entitled to leave for the adoption or foster care of a child and care for the newly placed child within one year of placement.
- To care for the employee’s spouse, child, or parent who has a severe health condition.
- A serious health condition that makes the employee unable to perform the essential functions of their job.
- any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty.”
- Twenty-six working weeks of leave during a single one-year period to care for a covered servicemember with a serious injury or illness if the eligible employee is the service member’s spouse, son, daughter, parent, or next of kin (military caregiver leave).
In addition to the Family and Medical Leave Act (FMLA) (See Sick Leave above) and the Pregnancy Discrimination Act, Tennessee has the following laws regarding Maternity and Paternity Leave; employers with more than 25 employees are required to provide maternity leave of up to 6 weeks for employees who do not have pregnancy-related complications or disabilities and up to 4 months for employees with disabilities related to pregnancy, childbirth, or other related conditions.
PAID MATERNITY LEAVE (DAYS)
Tennessee does not have any state statute governing the amount and payment of Maternity and Paternity leave. This is covered under the FMLA (see Sick Leave above) and the Pregnancy Disability Act.
Tennessee does not have any state statute governing the amount and payment of Parental leave. This is covered under the FMLA (see Sick Leave above).
Jury Duty – Tennessee law requires all employers (with five or more employees) to provide their full-time employees with job-protected paid time off from work to perform their duty as jurors. Employees must provide a copy of the jury summons to the employer as evidence of requirement.
Voting leave – Tennessee law states that all employees registered to vote must be allowed to take the necessary time off from work, up to three hours of unpaid leave, to vote in any municipal, county, state, or federal primary or general election.
Employees must provide reasonable notice to their employers to take time off to vote before noon on the day before the election. Leave is paid if it occurs during the employee’s normal working hours. Employers must provide unpaid leave for employees who are serving as part-time voting machine technicians.
In addition to the federal law USERRA, Tennessee law provides Protection against discrimination for members of U.S. armed forces, reserves, National Guard, commissioned corps of the Public Health Service, and any other category of persons designated by the president in a time of war or emergency. Reemployment in a former or a similar position regarding seniority, status, pay, and other employment benefits may be offered by an employer.
Except in mass dismissals or as provided for in an employment contract or a collective bargaining agreement, U.S. law does not impose a formal “notice period” to terminate an individual employment relationship, and employment is stipulated “at will.”
This means that either the employer or the employee may end the employment relationship without giving either notice or reason, provided it is not illegal, notable discrimination on the grounds of a category protected by law, etc., and as per the Federal Worker Adjustment and Retraining Notification Act (WARN).
The employment contracts of executives and other highly skilled individuals often incorporate a “just cause termination” clause which mandates that the employer may only terminate the employee for “cause” and lists the permissible grounds. In such cases, the parties negotiate the foundations for a “just cause” termination case-by-case.
In Tennessee, most employees are employed “at-will,” and either party can terminate the employment relationship without notice. In Tennessee, pay out of unused vacation time is not required by law. Still, generally, employers will pay an employee for unused vacation days, provided the employee gave some advanced notice of resignation; there is no official notice period. Still, in general practice, two weeks’ notice is a minimum requirement.
In mass dismissal cases the Worker Adjustment and Retraining Notification Act (WARN Act) must be followed, and employers must give 60 days’ notice to impacted employees.
Except as otherwise provided in an employment contract or collective bargaining agreement, employers need not make severance payments to terminated employees. Employers who choose to offer severance would need to have the provisions within the employee’s contract and agreed by both parties, many employers choose to offer severance payment linked to the employee’s length of service.
No legal provision governs a formal “trial /probation period.” However, it is common practice for employers to set a performance evaluation after an initially stated period of employment of 90 days.
Foreign nationals without permanent resident status or a work visa are not permitted to work in the United States. An employer seeking to hire a foreign national may file a petition with the United States Department of Homeland Security/ United States Citizenship and Immigration Services (“USCIS”) for an employment visa on behalf of the prospective employee.
If the petition is approved, the prospective employee must obtain a “visa stamp” from a United States embassy or consulate (Canadian citizens are exempt from this requirement). To get a temporary U.S. work visa, an employer must file a petition with U.S. Citizenship and Immigration Services (USCIS). An approved petition must be part of the visa request; the types of visas include:
- H-1B – for applicants with a college degree hired to do specialised work. The visa is valid for three years and can be extended for an additional three years. The visa is connected to the employer that filed the petition. If there is a change of employer, the new employer must repeat the process. There are 65,000 H-1B visas available each year.
- H-1B1 – for applicants with a college degree from Chile and Singapore. The US government grants up to 1,400 visas to Chilean citizens and 5,400 from Singapore each year.
- H-2A – for temporary or seasonal agriculture work. It is limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
- H-2B – for temporary non-agricultural work. These visas are limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
- L – for intercompany transfers (people transferred from a foreign company to a US branch of the company.) The applicant must have been employed at the company for a year before the transfer and work in a managerial level position or higher with specialised knowledge.
- 0 – for people with extraordinary ability in science, arts, education, business, or athletics.
The standard procedure is to obtain a short-term work visa and then apply for an immigrant visa after the employee has started working in the United States.
For those seeking employment-based immigrant visas:
- E-1 – Highest priority employment for those with extraordinary ability in science, arts, education, business, and athletics.
- E-2 – for those with advanced degrees or exceptional ability.
- E-3 – for skilled workers and professionals, as well as unskilled workers.
- E-4 – Members of certain immigrant groups.
- E-5 – Immigrant investors in US companies (substantial investment)
Alternatively, an employer may sponsor a potential employee’s application for permanent resident status, referred to as a “green card,” if the employee can establish that the potential employee is a multinational executive/manager transferee, has unique skills, or has been offered a job in the United States. The employer must have been unable to recruit a U.S. worker who meets the position’s minimum requirements.
All employers are obligated to verify that all individuals they employ are authorised to work in the United States.
In the US, there are 38 states where there is a combined state and local tax rate.
Tennessee has a combined state and local tax rate of 9.614% (state rate of 7.00% and local rate of between 1.25% – 2.75%).
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Questions & Answers
Payroll and Benefits Guide
in United States – Tennessee
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
Public Holidays Calendar
|Sunday||Jan-1||New Year's Day|
|Monday||Jan-16||Martin Luther King Jr. Day|
|Monday||Jun-19||Juneteenth Independence Day|
|Tuesday||Jul-4||Independence Day July|