Tennessee Payroll Instructions

Tennessee has no state income tax, and no payroll tax withholding. However, employers still need to withhold federal tax, Medicare and social security, and pay several employer taxes (including Medicare, social security, SUTA and FUTA).

HINT: TurtleSoft provides free annual updates for US federal and Tennessee tax withholding rates.

Tennessee State Withholding Instructions

To enter withholding information for an employee in your Goldenseal company file, follow these steps:

  1. Open the Payroll tab on the left, and choose Employees.
  2. Locate the employee's record.
  3. Click the Payroll Setup button.
  4. Enter the employee's marital status into the Marital Status field.
  5. Enter the number of federal dependents into the Federal Exemptions field.
  6. Enter a Tenessee Tax Package into the Tax Package field, based on the employee’s W4 form. Choose Old W4 for pre-2020 forms. Choose New W4 Step2- if they did not check the box in step 2 of the new form. Choose Step2+ if they did check it. HINT: If you don't see Tennessee packages in the list, you'll need to import the tax info first.
  7. Click OK.

Tennessee State Unemployment Tax Instructions

In 2023 the Tennessee SUTA tax is calculated on the first $7,000 of wages for each employee (it decreased from a $8000 cutoff in 2018). The starting rate for a new business is 2.7%. After three years the unemployment insurance tax rate is calculated from the employer's payroll history and unemployment claims (rates vary between 0.3% and 10%).

To enter your Tennessee SUTA rate into Goldenseal payroll accounting software, follow these steps:

  1. Choose Payroll Setup from the Costs menu, and choose Tax Items.
  2. You'll see a list of Tax Items. Double-click on the Tennessee SUTA tax. HINT: If you don't see Tennessee SUTA in the list, you'll need to import your state's payroll info first.
  3. Enter the current rate for your business into the field next to Calculation method.
  4. If the cutoff amount has changed, enter it into the dollar field next to First Adjustment.

Tennessee Marital Status

Use the following to determine the value for the Marital Status popup menu in each Employee account:

State Tax Contacts

Website

Little Known Tenessee Tax Fact

The Tennessee state tax on double-letter combinations was repealed in 1937.

Official State Lawn Ornament

Aspiring country guitarist/singer.