Make employment in Tennessee easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in Tennessee, all in one easy-to-use platform.
From the vibrant musical Americana of Nashville to the dramatic beauty of the Great Smoky Mountains, Tennessee is one of the US’ most iconic regions.
There’s more to The Volunteer State than its musical legacy, though. With two major urban centers and a diverse economy spanning multiple sectors, Tennessee is a highly desirable location for country-lovin’ employees and employers alike.
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In Tennessee, workers’ rights are protected by numerous employment and labor laws, at both the state and federal level. As a result, employees enjoy protection from discrimination based on age, religion, sexual orientation, gender, and race.
Here are the key things you need to know about hiring in Tennessee.
Work and overtime laws in Tennessee are governed by the Labor Standards Unit.
Under state law, full-time employment is generally deemed to be between 30 and 40 hours per week.
Under the federal Fair Labor Standards Act, non-exempt employees are entitled to overtime pay of 1.5x their regular pay rate if they work more than 40 hours in a week.
Employees are generally (but not always) exempt from overtime if they:
Earn more than the specified state or federal exemption threshold
Perform a role with duties that are
Work in a certified or licensed profession, such as law, accounting, architecture, or engineering
In Tennessee, the salary threshold for exemption is currently $684 per week, which is the federal minimum.
Note that the federal salary threshold for exemption is currently being reviewed in the US.
From July 2024, the minimum wage for private sector employees in Tennessee will be $12 per hour.
We can help you get your new employee started in Tennessee fast. Note that our minimum onboarding time (MOT) is dependent upon registration with the local authorities, and begins after the employee has submitted all the required information on the Remote platform.
For non-citizens of the US, a work eligibility assessment may be required, and can add three extra days to the onboarding time. If a follow-up is needed, there may be additional delays.
Please note that payroll cut-off dates can impact the actual first day of employment. Remote’s payroll cut-off date is the 10th of the month, unless otherwise specified.
Under state law, employees must be paid at least twice per month.
For Remote customers, employee payments are made twice per month in equal installments, payable in arrears. The first payment is made on the 15th of the month and the second payment is made on the final day of the month. If relevant, bonus payments, commissions, and expense reimbursements are included in the second payment of the cycle.
Remote can help you craft a competitive benefits package to attract and retain the best global talent. Our benefits experts understand the trends, requirements, and expectations of the Tennessee labor market, allowing your employees to feel appreciated and thrive.
Our benefits packages in Tennessee usually include some or all of the following:
Under the federal Affordable Care Act, organizations with a headcount of 50 or more must offer statutory health insurance to their full-time employees.
Many employers also offer some level of supplemental health insurance. While this can lead to a relative rise in employment costs, it’s an essential benefit that ensures your people have access to routine care and are covered in the event of an emergency.
Because Remote is the employer of record (EOR), it’s important for us to offer the same core benefits to all employees to ensure fair and non-discriminatory hiring practices. This protects both your business and ours.
Note that we do not add a markup on any benefits premiums or administration costs.
No. Organizations are not legally required to offer a 401k retirement plan (or any other type of savings plan) to their employees. However, they may choose to offer this benefit as part of their overall compensation package.
Tennessee, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in Tennessee may lead to fines and penalties for the offending company.
Employment taxes and statutory fees affect both your payroll and your employees' paychecks in Tennessee. Note that your employees may be liable for additional local taxes.
Employer taxes
0%
Federal unemployment insurance tax (FUTA) (charged on the first $7,000 an employee earns per year)
0.00% to 10%
State unemployment insurance tax (SUTA)
0.0%
FICA (Social security)
0.00%
FICA (Medicare)
Employee taxes
0% to 37%
Federal income tax
NA
State income tax
0.0%
FICA (Social security)
0.00%
FICA (Medicare)
In Tennessee, there is no state or federal law that requires employers to provide paid or unpaid vacation leave to their employees, although many organizations do.
In Tennessee, there is no state or federal law that requires employers to provide paid sick leave to their employees, although some organizations do. Can an employer deny sick time in Tennessee? Under the federal Family and Medical Leave Act (FMLA), eligible employees are entitled to up to 12 weeks of unpaid sick leave per year, provided they: Have worked for the same employer for at least 12 months Work in a location where at least 50 people are employed by the company within a 75-mile radius
Under the FMLA, employees are entitled to up to 12 weeks of unpaid maternity or paternity leave. Some organizations opt to pay a reduced salary during this period. Under state law, employees are also entitled to four months’ unpaid parental leave, provided: The employer has at least 100 employees The employee has been at the company for at least 12 months Three months’ notice is provided by the employee
Employers are not legally required to provide bereavement leave to their employees, although most organizations offer unpaid leave.
Employees must report for jury duty if summoned (unless exempt). Jurors are typically “on call” for two weeks. Do employers have to pay for jury duty in Tennessee? Yes. Employers must provide full pay to employees for all hours served on jury duty (minus the jury pay provided by the court), provided: The company has five or more employees The employee has been at the company for at least six months Employers also cannot penalize or terminate an employee on jury duty.
Under state and federal law, employers must grant unpaid leave to employees who are members of the military or the National Guard for military duty or training. These employees have the right to take time off for their military obligations, and employers are prohibited from discriminating against them based on their military service.
Like nearly all US states, Tennessee is an “at-will” state. This means both employers and employees can end the employment relationship without reason, provided it is legal.
Remote’s legal experts can help you navigate terminations to ensure employees are only let go fairly, negating any potential legal complications.
Employers and employees are not required to provide notice of termination, unless otherwise stated in the employment contract.
Despite this, it's usually customary for employees to provide two weeks' notice when leaving an organization.
Employers are not legally required to provide severance pay (unless it is stipulated in the employee's contract or in the company policy).
Employers are also not required to pay any accrued but unused vacation time or sick leave, unless stipulated in the employment agreement.
There is no requirement to provide a probation period for employees, although many companies implement internal probation policies. These policies typically involve a formal performance evaluation after a specified period, such as three or six months.
Tennessee has a growing economy supported by industries such as manufacturing, healthcare, tourism, and technology. With state-specific payroll regulations, including no state minimum wage, no personal income tax, and right-to-work laws, employers in Tennessee must ensure compliance with both state and federal payroll laws. Understanding these regulations is crucial for smooth payroll operations and compliance.
Employers in Tennessee must adhere to both federal and state payroll regulations regarding wages, taxes, and benefits. Below is an overview of key payroll components:
Minimum wage: Tennessee does not have a state minimum wage, so employers must comply with the federal minimum wage of $7.25 per hour.
Overtime rules:
Tennessee does not impose a state income tax on wages, meaning employers are only responsible for federal income tax withholding.
Tennessee does have a Hall Income Tax, which applies to interest and dividend income but does not affect wages.
Employers must contribute to Tennessee’s Unemployment Insurance (UI) program, managed by the Tennessee Department of Labor and Workforce Development.
The UI wage base in Tennessee is $7,000.
UI tax rates vary based on an employer’s experience rating and range from 0.01% to 10.0%.
New employers typically pay a 2.7% UI tax rate.
Tennessee law requires most employers with five or more employees to carry workers’ compensation insurance to cover medical expenses and lost wages for employees injured on the job.
Construction and coal mining businesses are required to carry coverage even if they have one or more employees.
Coverage can be obtained through private insurance carriers or self-insurance programs.
Employers must register for a Tennessee Employer Tax Account with the Tennessee Department of Labor and Workforce Development.
UI tax reports must be submitted quarterly to the Tennessee Department of Labor and Workforce Development.
Payroll tax payments can be made electronically through the TNPAWS (Tennessee Premium and Wage Reporting System).
State minimum wage compliance: Tennessee follows the federal minimum wage of $7.25 per hour as there is no state-specific requirement.
Final paycheck rules:
New hire reporting: Employers must report new hires to the Tennessee New Hire Reporting Program within 20 days.
Paid sick leave: Tennessee does not require employers to provide paid sick leave, but employers may choose to offer it as a benefit.
Payroll recordkeeping: Employers must maintain payroll records for at least three years to comply with state and federal laws.
Right-to-work state: Tennessee is a right-to-work state, meaning employees cannot be required to join a union as a condition of employment.
Managing payroll in Tennessee requires careful attention to state-specific regulations, including minimum wage compliance, UI tax requirements, and workers’ compensation laws. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.
The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be, book a demo with Remote today.
Hiring contractors in Tennessee can be a strategic and cost-effective way for businesses to complete projects without the obligations of hiring full-time employees. Whether you are engaging independent contractors for specialized services or working with subcontractors for short-term projects, understanding Tennessee laws and federal regulations is essential.
Remote helps businesses stay compliant when hiring contractors globally with these key features:
Global compliance support: Ensures adherence to labor laws in 200+ countries with localized contracts and proper documentation.
Misclassification protection: Includes built-in compliance checks and seamless contractor-to-employee conversion.
Centralized documentation: Maintains essential records for audits and automates tax filings (e.g., 1099s for U.S. contractors).
Legal expertise: Provides guidance on complex local labor laws, simplifying international hiring.
Remote’s streamlined approach minimizes compliance risks and simplifies contractor management for businesses.
Remote simplifies contractor payments with:
Automated processing: One-click approvals, bulk payments, recurring invoices, and real-time tracking.
Global coverage: Payments in 200+ countries, multiple payment methods, and currency flexibility.
Cost and compliance: Fair price guarantee (pay only for active contractors), built-in compliance with regional regulations, and localized contracts.
Learn more about how Remote simplifies contractor management in Tennessee — get started for free today.
Our employer of record (EOR) service enables you to hire, manage, and pay top talent in Tennessee with speed and simplicity.
Remote’s EOR allows your company to legally hire employees in any country or US state — including Tennessee — wherever your business is based, without having to set up a local legal entity.
On paper, Remote is the official employer, and we handle compliance, payroll, benefits (including equity), and other HR processes — but you maintain full control over the hire’s day-to-day management and work responsibilities. Learn more.
An EOR may be ideal if your company:
Needs to hire employees in Tennessee but doesn’t want to establish a legal entity there
Is testing local markets before committing to a full business expansion
Wants to ensure full compliance with federal, state, and local employment laws and tax requirements
Needs a fast, cost-effective way to onboard employees in the state
Needs a temporary hiring solution before establishing a legal entity
If your company wants to hire talent in Tennessee but doesn't have a legal entity there, our EOR provides a fully compliant and efficient solution. Whether you’re hiring from outside the US, or from a different US state, there are strict employment and payroll processes that you must adhere to. Our EOR service ensures you meet these legal obligations while enabling you to grow quickly.
Key benefits of hiring through our EOR in Tennessee include:
Faster market entry . You can hire talent quickly, without having to wait months to establish a local entity.
Full compliance with local employment laws . Avoid the legal risks associated with non-compliance and misclassification.
Simplified payroll management . We automate payroll tax calculations and ensure you are fully compliant with all federal, state, and local withholding obligations, even when laws change.
Lower costs. Setting up a legal entity in Tennessee can be costly and time-consuming. An EOR eliminates the need for entity registration, reducing overhead expenses.
Fewer resources required. With HR, payroll, and compliance managed by the EOR, your company can concentrate on scaling operations and assigning your resources elsewhere.
It’s also crucial to note that, at Remote, we own all our own legal entities. As a result, we don’t need to rely on third parties, which can incur delays and extra costs, and result in a negative employee experience. All our EOR services — including the dedicated support of our local specialists — are provided in-house.
To learn more — and to see our EOR platform in action — book a demo with one of our friendly experts today.
Tennessee offers a pro-business environment with no state income tax, a growing population, and thriving industries in healthcare, logistics, and advanced manufacturing. Whether you’re a startup expanding across the southeast or an SMB ready to build a distributed team, managing HR, payroll, and compliance across state lines can quickly become overwhelming. That’s where a professional employer organization (PEO) can help.
A professional employer organization (PEO) is a third-party provider that helps businesses handle key HR functions. These typically include payroll, benefits administration, tax filings, and employment law compliance. With a PEO, your business enters into a co-employment relationship, meaning the PEO takes on the administrative and legal tasks related to employment — while you retain full control over day-to-day management of your team.
For small to midsize companies, a PEO can provide enterprise-grade HR services without the cost or complexity of building an in-house department.
As mentioned, a PEO operates through a co-employment model, which requires your company to be registered and operating in Tennessee.
In contrast, an employer of record (EOR) acts as the legal employer on your behalf. EORs are typically used for hiring in states (or countries) where your business doesn’t yet have a legal presence. If you’re hiring your first employee in Tennessee and don’t yet have an entity or tax setup, an EOR may be a better fit initially.
Working with a PEO in Tennessee offers several advantages, such as:
Compliance with state employment laws and tax regulations
Access to affordable, competitive employee benefits packages
Reduced administrative burden around payroll and HR documentation
Simplified onboarding, performance tracking, and employee offboarding
Minimized risk around misclassification, workplace policies, and employee relations
Tennessee employers must also navigate unique state laws, including workers’ compensation requirements and specific tax obligations. Remote’s PEO helps you stay compliant while keeping your HR operations lean and efficient.
To partner with a PEO in Tennessee, your business must have a registered legal entity in the state. Once that’s in place, our PEO service takes on your HR administration tasks such as running payroll, administering benefits, and filing local and federal taxes.
Remote’s PEO services integrate seamlessly into your operations, whether you're hiring your fifth employee or your 50th. You maintain full control over how your team works while we handle the operational complexities behind the scenes.
If your company is legally established in Tennessee and you're looking for a scalable way to manage HR, a PEO is an ideal solution. You’ll gain access to expert support, reduce your compliance risk, and free up time to focus on growth.
If you're just entering Tennessee and don’t yet have a legal entity, consider starting with an EOR and transitioning to a PEO as you scale.
Remote makes it easy to manage HR, payroll, and compliance across all 50 states. Learn more about our PEO services and how we can support your team’s growth in Tennessee.
$29
per employee/month
Powerful, transparent international payroll
Simple self-service platform
Personalized support from dedicated specialists
Adhere to local payroll regulations in every country
Integrated benefits management
Includes HR Core as standard
$29
per contractor/month
Only pay for contractors you actively work with
Work with international contractors
Create, edit, and sign tailored, localized contracts
Approve contractor invoices with one click or auto-pay
Transparent payments with complete visibility
Includes HR Core as standard
$699
per employee/month
Hire without opening a local entity in 90+ countries
Onboarding with a dedicated specialist
Local payroll paid on time, every time
Compliance protections built-in
Competitive, flexible and localized benefits
Dedicated in-house experts for local support
Includes HR Essentials as standard