Massachusetts vs Tennessee: Business Hiring Cost Comparison (2026)
A $60K employee costs $65,949 in Massachusetts and $65,385 in Tennessee. Tennessee saves $564/year per hire.
Tennessee is $564 per year cheaper than Massachusetts for a $60,000 employee in 2026, with total employer costs of $65,385 vs $65,949 including all mandatory payroll taxes.
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At a $60,000 salary
Tennessee saves $564/employee/year
$65,949 in Massachusetts vs $65,385 in Tennessee
Massachusetts
$65,949
1.1x salary
Tennessee
$65,385
1.09x salary
Shareable Insights
$5,640/yr for a 10-person team
Same salaries, same roles. Just Tennessee instead of Massachusetts.
SUTA accounts for 43% of the gap
$240 difference in SUTA alone between these states.
Massachusetts adds $204 in mandatory programs
Disability insurance and paid family leave that Tennessee doesn't require.
Cost Breakdown Comparison
Based on $60,000 annual salary
| Cost Component | MA | TN | Diff |
|---|---|---|---|
| Base Salary | $60,000 | $60,000 | — |
| Social Security (6.2%) | $3,720 | $3,720 | — |
| Medicare (1.45%) | $870 | $870 | — |
| FUTA (0.6%) | $42 | $42 | — |
| SUTA (State Unemployment) | $345 | $105 | +$240 |
| Workers' Compensation | $768 | $648 | +$120 |
| State-Mandated Insurance | $204 | $0 | +$204 |
| Total Employer Cost | $65,949 | $65,385 | +$564 |
Tax Rate Comparison
| Rate | Massachusetts | Tennessee |
|---|---|---|
| SUTA Rate Range | 0.56% – 8.4% | 0.1% – 5.0% |
| SUTA Typical Rate | 2.3% | 1.5% |
| SUTA Wage Base | $15,000 | $7,000 |
| Workers' Comp Rate | 1.28% | 1.08% |
| State Income Tax | Yes | No |
| Paid Family Leave | 0.34% | Not required |
What This Means for Employers
For a business hiring at a $60,000 salary, choosing Tennessee over Massachusetts saves $564 per employee per year in employer-side payroll costs alone. For a team of 10, that's $5,640 annually — enough to fund an additional hire or significantly offset operating costs.
The biggest difference comes from SUTA (state unemployment tax) — Massachusetts charges 2.3% on the first $15,000 vs Tennessee's 1.5% on $7,000. The rate difference of 0.8 percentage points is significant because SUTA is levied on every employee and adjusts annually based on your unemployment claims history. Federal taxes — Social Security (6.2%), Medicare (1.45%), and FUTA (0.6%) — are identical in both states and account for the majority of employer tax burden.
A notable difference between these states is mandatory benefit programs. Massachusetts requires employer contributions to paid family leave programs that Tennessee does not mandate — adding $204 per employee annually.
These numbers reflect employer-side costs only and don't include benefits, overhead, or the employee's own tax burden. Use the interactive Employee Cost Calculator to model different salary levels and benefits packages.
Choosing Between Massachusetts and Tennessee?
Cost alone favors Tennessee: At a $60K salary, you save $564 per employee — a real number that compounds across a growing team. At 20 employees, that's $11,280/year before factoring in any raises.
When Massachusetts might still make sense: If your business depends on talent concentrated in Massachusetts — tech workers, finance professionals, specialized trades — the labor market access may outweigh the payroll cost premium. Remote-friendly roles, however, make the $564/employee savings a strong argument for Tennessee-based registration.
What this comparison doesn't capture: State income tax (employee side) affects your offer competitiveness — employees in high-tax states need higher gross pay to net the same take-home. Massachusetts has state income tax; Tennessee has no state income tax. This affects what salary you need to offer to attract equivalent candidates.
State Employment Profiles
Massachusetts
Massachusetts has a high employer tax profile with a $15,000 SUTA wage base and mandatory paid family leave contributions, offset by one of the highest-educated workforces in the country.
biotechnology & life sciences, financial services, higher education
The Route 128 biotech corridor and Cambridge's Kendall Square drive premium wages in life sciences and tech; total employment cost per worker is among the highest in the Northeast.
Tennessee
Tennessee has no state income tax, a minimal $7,000 SUTA wage base, and no paid family leave mandate, making it one of the most employer-friendly states in the South.
automotive manufacturing (Nissan, Volkswagen), healthcare (HCA HQ), logistics
Nashville has emerged as a major healthcare corporate hub (HCA, Community Health Systems, Envision); white-collar healthcare wages are reshaping the regional compensation landscape.
Employer Environment in Each State
Key factors that shape employer costs beyond the numbers above
- State income tax applies — factor into total compensation packages
- SUTA rate 2.3% (wage base $15,000) — in line with national average
- Workers' comp rate 1.28% — near national average, varies by industry classification
- State paid family leave program (0.34% employer share) — additional mandatory payroll cost
- No state income tax — employees keep more of their paycheck, a recruiting advantage
- SUTA rate 1.5% (wage base $7,000) — in line with national average
- Workers' comp rate 1.08% — near national average, varies by industry classification
Hiring Strategy Takeaway
The $564 per-employee cost gap at $60K salary is primarily driven by SUTA rates (MA: 2.3% vs TN: 1.5%). Tennessee's lack of state income tax gives it a recruiting edge — employees take home more pay for equivalent salaries. For a growing business, this difference compounds quickly — a 10-person team in Tennessee costs $5,640 less annually than the same team in Massachusetts, before accounting for benefits, overhead, or salary-level differences.
Explore Each State
Cost Comparison at Different Salary Levels
How the gap changes from $30K to $150K
| Salary | MA Total | TN Total | Difference |
|---|---|---|---|
| $30,000 | $33,168 | $32,766 | +$402 |
| $40,000 | $44,095 | $43,639 | +$456 |
| $50,000 | $55,022 | $54,512 | +$510 |
| $60,000 | $65,949 | $65,385 | +$564 |
| $75,000 | $82,340 | $81,695 | +$645 |
| $100,000 | $109,657 | $108,877 | +$780 |
| $125,000 | $136,975 | $136,060 | +$915 |
| $150,000 | $164,292 | $163,242 | +$1,050 |
Click any amount to see the full cost breakdown for that salary and state. Amounts shown from the perspective of MA.
What About Startup Costs?
Hiring is one piece. See what it costs to actually open in these states.
Massachusetts
Tennessee
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