What it costs to live and work in Tennessee: the minimum wage, state income tax, sales tax and median rent, from official sources, and what they mean for your monthly budget.
| Tennessee | Source | |
|---|---|---|
| Minimum wage | $7.25 an hour | US Department of Labor, Wage and Hour Division: State Minimum Wage Laws |
| State income tax | none | Tax Foundation: State Individual Income Tax Rates and Brackets, 2026 |
| State sales tax | 7 % | Tax Foundation: State and Local Sales Tax Rates, 2026 (rates as of January 1, 2026) |
| Median gross rent | $1,284 a month (2024) | US Census Bureau, American Community Survey 2024 1-year estimates, table B25064 Median Gross Rent (Dollars), by state |
Tennessee has no state minimum wage law; the federal $7.25 an hour applies.
Tennessee has no personal income tax.
The state sales tax is 7 %; counties and cities add up to 2.75 % (average local rate 2.61 %).
What income does rent in Tennessee take?
A common rule of thumb is to keep rent at or below 30 % of gross income. At the median rent of $1,284 a month, that means a household income of about $51,400 a year before tax.
Good to know
- Groceries (food and food ingredients) carry a reduced state sales tax of 4 %, plus the local rate (Tennessee Department of Revenue).
Sources
- US Department of Labor, Wage and Hour Division: State Minimum Wage Laws (2026-07-01)
- Tax Foundation: State Individual Income Tax Rates and Brackets, 2026 (2026-02-19)
- Tax Foundation: State and Local Sales Tax Rates, 2026 (rates as of January 1, 2026) (2026-07-06)
- US Census Bureau, American Community Survey 2024 1-year estimates, table B25064 Median Gross Rent (Dollars), by state (2024)
- Tennessee Department of Revenue: State Sales Tax Rate on Food Is 4% (2017-08-22)