Unemployment Compensation Tax
2.7% for most new employers to Tennessee
- mining - 5%
- construction - 7%
- manufacturing sect 33 – 5.5%
Collected by both the federal and state governments, Tennessee's portion is a credit against part of the federal taxes owed. Unemployment Compensation Tax is paid by employers only and cannot be deducted from employee's wages.
The first $9,000 in wages paid to each employee is subject to this tax. Taxable wages include: tips, meals, lodging and other payments in kind. Non-taxable wages include: payments made by employer for insurance, retirement, or annuities.
After 3 years as an employer in the state of Tennessee, an employer’s history can be reviewed and a different lower rate assigned
Source: Mark Howell, State of Tennessee, Director Employer Accounts Operations, Dept. of Labor & Workforce Development