TN SUTA Tax: Who Pays, Wage Base, and Filing Deadlines

If you employ workers in Tennessee, you owe State Unemployment Tax Act (SUTA) premiums on the first $7,000 of each employee’s wages each year, at a rate between 0.01% and 10% depending on your claims history. The Tennessee Department of Labor and Workforce Development (TDLWD) administers the program, and only employers pay. Nothing is withheld from employee paychecks.¹²

Who Owes Tennessee SUTA

You become liable for Tennessee unemployment premiums as soon as your business crosses one of several thresholds. The common ones:³

You pay $1,500 or more in gross wages in any calendar quarter, or you employ at least one person during 20 different weeks in the current or preceding calendar year.
You are already liable under the Federal Unemployment Tax Act (FUTA) and have at least one employee in Tennessee.
You acquire all or part of a business that was already liable.

Different triggers apply to a few specific categories. A 501(c)(3) nonprofit is covered once it has four or more paid employees during each of 20 weeks in the current or preceding year. All state and local government units are covered. Domestic service employers are liable at $1,000 in cash wages in a quarter. Agricultural employers are liable at 10 or more workers for 20 weeks, or $20,000 in gross wages in a quarter.³

If your business operates 26 consecutive weeks or fewer each year, you can apply for a seasonal employer designation by filing Form LB-3304 between September 1 and October 31. You need an experience-rated premium rate, no unpaid liabilities, and no delinquent filings in the preceding four quarters. The designation must be renewed annually.³

The $7,000 Taxable Wage Base

You pay SUTA only on the first $7,000 of each employee’s wages per calendar year. Wages above that line are not subject to the tax. The $7,000 base has been in place since 2018 and matches the federal FUTA base.²

The wage base is not permanent. It rises when the state’s Unemployment Insurance Trust Fund drops. It was $9,000 in 2014–2015 and $8,000 in 2016–2017 before falling back to $7,000.²

How Your Rate Is Set

Tennessee assigns experienced employer rates using a reserve-ratio formula. The state adds up all the premiums you have paid, subtracts all benefits charged against your account, and divides the result by your average taxable payroll over the most recent three years. That ratio determines your row on the active premium rate table.²

Six premium rate tables exist under T.C.A. § 50-7-403, and which one applies depends on the trust fund balance measured on June 30 and December 31 each year. Table 6, the most employer-friendly schedule, has been in effect continuously since January 1, 2016, because the fund has stayed above $850 million.⁴²

Under Table 6, experienced employers with a positive reserve ratio pay between 0.01% and 2.3%. Employers whose benefit charges exceed their premium contributions (a negative reserve ratio) pay between 5% and 10%.¹ If the trust fund were to fall below $650 million, an additional 0.6% surcharge would apply.⁵

Rates for New Employers

You do not receive an experience-rated premium until you have been liable for 36 consecutive months ending on December 31. Before that, your rate is tied to your industry sector under NAICS. Manufacturing sectors (NAICS 31, 32, and 33) each carry their own industry-based rate. Employers in all other industries pay 2.7%.⁶

Tennessee does not accept voluntary contributions, so you cannot pay extra into your account to buy down your rate the way employers can in some other states.⁷

Registering for an Account

Every employer registers online through the Employer e-Services portal on jobs4TN.gov. The system determines whether you are liable and, if so, issues an eight-digit employer account number.³ Since the system was modernized in 2025, new employers receive the number immediately upon completing registration, rather than waiting up to seven days as under the old process.⁸

If you have already registered and need to find your account number, check any TDLWD notice such as a Premium Report or Wage Report, or call the department at (615) 741-2486.⁹

Professional Employer Organizations register separately. A PEO sets up a customer account and then registers each Tennessee client under it. PEO clients remain jointly and severally liable for premiums unless the PEO has posted a $100,000 corporate surety bond.³

Quarterly Filing and Payment Deadlines

You file wage and premium reports through the Employer e-Services portal every quarter. Each report is due by the end of the month following the close of the quarter:¹⁰

Q1 (January–March): due April 30
Q2 (April–June): due July 31
Q3 (July–September): due October 31
Q4 (October–December): due January 31

The portal lets you enter wage data manually or upload a file (abbreviated ICESA, 58-character text, or full ICESA for single or bulk filing). Uploaded files are validated automatically and rejected if they contain errors. Amendments that only add wages process immediately; amendments that decrease previously reported wages require staff approval.¹¹

Penalties and Interest for Late Filing or Payment

Miss a deadline and the costs under T.C.A. § 50-7-404 are:¹²

Interest of 1.5% per month, or any portion of a month, on unpaid premiums until paid.
A late-report penalty of $10 per month or portion of a month for each delinquent or incomplete quarterly report, capped at $50 per report.
If you don’t file within 30 days of a written notice from the commissioner, the department may assess the premiums due or $50, whichever is greater.

The delinquency sequence starts about three weeks after the due date with an initial notice, then a certified notice 30 days later, and a final assessment 30 days after that if you still haven’t filed.¹⁰ Unpaid amounts become a lien on your assets and can be pursued through civil action, distress warrants, or federal tax refund offsets. The collection statute of limitations is six years from the due date.¹²

The Reimbursement Option for Governments and Nonprofits

State and local government units, political subdivisions, municipalities, and 501(c)(3) nonprofits can elect to be “reimbursement” employers instead of paying premiums. Under this arrangement, you pay no ongoing premiums and instead reimburse the state dollar-for-dollar for any unemployment benefits charged to your account.¹³ For nonprofits, the election is affirmative under T.C.A. § 50-7-403(h); if you don’t elect it, you pay standard premiums.⁴ This option is not available to for-profit businesses.

Buying or Selling a Business

When a business changes hands, the buyer may inherit the seller’s unemployment experience rating. For acquisitions on or after January 1, 2006, T.C.A. § 50-7-403(b)(2) sets the rules. To transfer the predecessor’s payroll, benefit, and premium experience, all outstanding unemployment liabilities must be paid, and the parties must execute a notarized written agreement filed with the Division of Employment Security during the quarter of the acquisition or the quarter immediately after.⁴

A merger creating a new entity produces a blended reserve ratio from the combined experience of the merging employers. A partial acquisition can transfer only the experience attributable to the acquired portion, as long as that portion is distinct and identifiable. When the two employers share common ownership or control (at least a 10% interest or management participation), the transfer is mandatory and both rates are recalculated immediately. The administrator can void any transfer found to have a substantial purpose of obtaining a lower rate.⁴

Penalties for “SUTA dumping” are heavy. Knowingly violating the transfer provisions, or advising someone else to do so, triggers immediate assessment of the premium difference plus interest, a 2% penalty rate on taxable payroll for three years, and civil fines up to $50,000. The conduct can also be prosecuted as a Class A misdemeanor.⁴

1
Bloomberg Tax. Tennessee Unemployment Taxes Unchanged for First Half of 2026
2
Tennessee Department of Labor and Workforce Development. UI Tax Rates
3
Tennessee Department of Labor and Workforce Development. Unemployment Insurance Tax
4
Justia. Tennessee Code § 50-7-403
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FindLaw. Tennessee Code § 50-7-403
6
Tennessee Department of Labor and Workforce Development. How Is My Premium Rate Determined
7
Paylocity. Tennessee Tax Facts
8
Tennessee Department of Labor and Workforce Development. June Unemployment Insurance Tax System Newsletter
9
Gusto. Tennessee Registration and Tax Info
10
Tennessee Department of Labor and Workforce Development. What Is Delinquent Cycle
11
Tennessee Department of Labor and Workforce Development. Filing and Amending Wage Reports
12
Justia. Tennessee Code § 50-7-404
13
Municipal Technical Advisory Service. Premium v. Reimbursement