TennesseeSalary Calculator 2026 — Take-Home Pay After Federal & State Taxes

Tennessee has no state income tax on wages — the Hall Income Tax on investment income was fully repealed effective January 1, 2021. W-2 workers pay zero state income tax, keeping their full gross pay minus only federal taxes and FICA. Tennessee's state sales tax is 7% — one of the highest base rates nationally — plus local add-ons of 1.5–2.75%, making the combined rate 8.5–9.75% in many areas. Tennessee is consistently ranked as one of the best states for tax-friendly cost of living for workers earning wages (investment-heavy portfolios should consider the sales tax impact on spending). Nashville, Memphis, and Knoxville have no city income taxes. Tennessee's moderate property taxes, zero income tax, and growing economy (particularly Nashville's boom) have attracted significant population growth. The lack of a state income tax on wages is the state's signature financial advantage for workers.