Tennessee Take-Home Pay Calculator (2026)

Tennessee does not tax wages or salary income. Workers in Tennessee take home their full gross pay without any state income tax withholding. Tennessee previously taxed investment income through the Hall Income Tax, which applied to interest and dividends. That tax was fully repealed in 2021. As of 2026, Tennessee taxes no personal income of any kind.

Tennessee raises revenue through a high sales tax. The state rate is 7%, which is one of the highest in the country, and local jurisdictions add between 1.5% and 2.75% on top. Most Tennessee residents pay a combined sales tax rate of 9% to 9.75% on purchases. Memphis and Nashville consumers typically pay around 9.75%. This is one of the highest combined sales tax burdens in the country. For households spending heavily on taxable goods, the sales tax can offset part of the income tax advantage.

For a worker earning $70,000 in Tennessee compared to a worker earning the same amount in Kentucky (3.5% flat rate) or Georgia (5.19% flat rate), the Tennessee worker saves $2,450 to $3,633 per year in state income tax. That advantage is real even accounting for higher sales taxes, particularly for workers who save and invest a significant portion of their income rather than spending it all on taxable goods.

Tennessee has no local income taxes beyond the state-level zero. Nashville, Memphis, Knoxville, and Chattanooga do not charge city income taxes. The state is particularly popular among remote workers who can choose their location, retirees drawing from retirement accounts that would be taxed in other states, and self-employed workers who would otherwise owe state income tax on business profits.