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Version: 1.7.3

Tennessee Payroll Tax Compliance

Employers in Tennessee must meet two key payroll compliance obligations: unemployment insurance (UI) and new hire reporting. Tennessee does not impose a state income tax on wages, so employers are not required to withhold state income tax from employee paychecks.

Each requirement comes with its own forms, deadlines, and reporting rules established by Tennessee state agencies. The sections below provide a clear overview of these obligations

Tennessee Withholding Tax Requirements​

Tennessee does not impose a state income tax on employee wages. This means:

  • Employers are not required to withhold Tennessee state income tax from employee wages.
  • No Tennessee state income tax withholding returns or deposits are required.

Tennessee Unemployment Insurance (UI) Requirements​

Employers are liable for Tennessee unemployment insurance tax, administered by the Tennessee Department of Labor & Workforce Development (TDLWD).

Forms required​

Form LB-0456​
  • Used as the Premium Report to report total wages, taxable wages, unemployment premiums due, and any interest or penalties.
Form LB-0851​
  • Used as the Wage Report to report employee-level wage details, including employee name, SSN, and total wages paid during the quarter.
  • Filed quarterly.
  • Due April 30, July 31, October 31, and January 31.
  • Employers must file even if no wages were paid during the quarter
Note:

TaxBandits API supports the automation of LB-0456/0851. See how it works

Tennessee New Hire Reporting​

  • Employers must report newly hired, rehired, or recalled employees to the Tennessee New Hire Reporting Program within 20 days of hire. Independent contractors must also be reported in Tennessee.

  • This reporting supports the enforcement of child support orders and helps detect fraud in unemployment insurance and public assistance programs.