Tennessee SUTA Tax Calculator
Figure basis: Official U.S. Department of Labor, Office of Unemployment InsuranceState Unemployment Tax Act (SUTA) tax is the state unemployment insurance tax that employers pay to fund unemployment benefits in Tennessee. This calculator estimates your Tennessee SUTA liability for the 2026 tax year. Enter the average annual wages per employee, your number of employees, and your assigned SUTA rate to see the taxable wages, tax per employee, and total tax. SUTA is charged only on the first $7,000 of each employee's wages (the 2026 Tennessee taxable wage base); wages above that per employee are not taxed. Your rate is set by the state based on your business's unemployment claim history (your "experience rating"); a new employer pays 2.7%. SUTA is separate from the federal FUTA tax and, in most states, is paid entirely by the employer and never deducted from employee wages. All wage-base and rate figures are sourced from U.S. Department of Labor, Office of Unemployment Insurance and verified for 2026. Replace the default rate with the rate on your state tax-rate notice for an exact figure.
In Tennessee, employers pay SUTA on the first $7,000 of each employee's wages for 2026, and a new employer pays 2.7%. For 5 employees earning $50,000 each at 2.7%, the estimated annual SUTA tax is $945.00 ($189.00 per employee).
How Tennessee SUTA tax works
Tennessee charges state unemployment tax on each employee's wages up to the taxable wage base of $7,000 for 2026. Once an employee has earned that much in the year, no further SUTA is due on that employee. Your rate is assigned by the state from your experience rating; a new employer pays 2.7%.
taxable wages per employee = min(annual wages, $7,000)
SUTA tax per employee = taxable wages per employee x rate / 100
total SUTA tax = SUTA tax per employee x number of employees
Worked example: 5 employees each earning $50,000 in Tennessee at 2.7%. Each employee's taxable wages are capped at $7,000, so the tax per employee is $189.00 and the total is $945.00.
Tennessee SUTA figures (2026)
| Figure | Value | Source |
|---|---|---|
| Taxable wage base | $7,000 | U.S. Department of Labor, Office of Unemployment Insurance |
| New employer rate | 2.7% | U.S. Department of Labor, Office of Unemployment Insurance |
The experience-rate range shown is the base statutory range. Most states add mandatory assessments on top (for example a fund-building, solvency, or administrative surcharge), so an employer's effective rate can be higher than the range shown, and the new-employer rate may exclude those add-ons. Your exact assigned rate is on your annual state tax-rate notice.
What a new Tennessee employer should budget for
Tennessee keeps one of the country's leanest SUTA setups. The taxable wage base is $7,000, the same figure as the federal FUTA base and among the lowest of any state, so state unemployment tax stops accruing once an employee has earned $7,000 in the calendar year. For a workforce where most people earn well above that, the tax behaves like a flat dollar amount per head rather than a percentage of full payroll.
A new Tennessee employer pays 2.7% until enough history builds up to be experience-rated. On the $7,000 base that caps the first-year cost at $189 per employee per year, or $945 for a five-person team. Because the base is so low, the effective rate on total payroll stays small: at $50,000 average wages, 2.7% of the capped $7,000 works out to well under one half of one percent of what you actually pay staff.
Once you have a track record, Tennessee moves you onto an experience (reserve-ratio) rate that reflects your own layoff history and the health of the state trust fund, which the state revisits on a set schedule. A stable employer with few claims can land below 2.7%; one with heavy turnover can pay more. Keep your state rate notice handy and enter that exact figure above, because the 2.7% default is only your starting point, not your permanent rate.
Tennessee SUTA tax: frequently asked questions
What is the Tennessee unemployment (SUTA) taxable wage base for 2026?
For 2026, Tennessee employers pay state unemployment tax on the first $7,000 of each employee's wages. Wages above $7,000 per employee are not subject to SUTA.
What is the Tennessee new employer SUTA rate?
New employers in Tennessee pay a SUTA rate of 2.7% until they have enough history to be experience-rated. On the $7,000 wage base that is up to $189.00 per employee per year.
How is Tennessee SUTA tax calculated?
Multiply each employee's wages, capped at the $7,000 taxable wage base, by your assigned experience rate, then add up across employees. SUTA is primarily an employer-paid tax and is not deducted from employee pay.
Is the Tennessee SUTA rate the same for every employer?
No. After the new-employer period, Tennessee assigns each employer an experience rate based on its history of layoffs and claims. The rate field above defaults to the new-employer rate; replace it with the rate on your state tax notice for an exact figure.
Official sources
- Tennessee unemployment taxable wage base and rates (tax year 2026): U.S. Department of Labor, Office of Unemployment Insurance, as at Jul 15, 2026.
Reviewed by the CalculatorHub team, edited by James Graham, 15 July 2026. See our methodology. General information, not tax or legal advice.