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Tennessee: minimum wage, income tax and cost of living

Tennessee in numbers: the minimum wage, state income tax, sales tax and median rent, from official sources, and what they mean for a budget.

Updated: October 11, 2026

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.

TennesseeSource
Minimum wage$7.25 an hourUS Department of Labor, Wage and Hour Division: State Minimum Wage Laws
State income taxnoneTax Foundation: State Individual Income Tax Rates and Brackets, 2026
State sales tax7 %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.

Work out your take-home pay

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

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