North Carolina Wage and Payroll Tax Facts
August 1, 2023
Having to comply with unique state taxes and wage laws can make processing payroll doubly daunting. Here’s everything you need to know about these rates and laws for the state of North Carolina.
North Carolina uses the same minimum wage rates that are required by the federal government in the Fair Labor Standards Act (FLSA), including standard and tipped minimum wage rates as well as tip credits. The state uses these rates for all county and local government agencies, and governmental instrumentalities too.
When it comes to processing payroll, North Carolina-based organizations must handle the following taxes in addition to those required by the federal government:
- Personal Income (a.k.a. State Income Tax)
- State Unemployment Insurance (SUI)
The below information was last updated July 28, 2023. It is not intended as legal or tax advice.
North Carolina Minimum Wage Rates
|
Wage Type |
North Carolina Rates |
Federal Rates |
|
Minimum Wage |
$7.25 |
$7.25 |
|
Tipped Minimum Wage |
$2.13 |
$2.13 |
|
Actual Tip Credit |
$5.12 |
$5.12 |
|
Wage Type |
North Carolina Rates |
Federal Rates |
|
Minimum Wage |
$7.25 |
$7.25 |
|
Tipped Minimum Wage |
$2.13 |
$2.13 |
|
Actual Tip Credit |
$5.12 |
$5.12 |
North Carolina State Income Tax (SIT) Rates
North Carolina has a flat income tax rate of 4.85%, meaning all residents pay the same amount regardless of their income levels.
|
Additional North Carolina SIT Details |
|
|
Valid Filing Statuses |
|
|
Exemptions |
Number of claimed allowances |
|
Form W-4 |
Form NC-4 |
|
Reconciliation Frequency |
Annual |
|
Additional North Carolina SIT Details |
|
|
Valid Filing Statuses |
|
|
Exemptions |
Number of claimed allowances |
|
Form W-4 |
Form NC-4 |
|
Reconciliation Frequency |
Annual |
North Carolina State Unemployment Insurance (SUI) Rates
SUI provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined by state law) and meet the state’s eligibility requirements.
|
North Carolina SUI Tax Details |
|
|
Taxable Wage Base |
$29,600 |
|
Employee Subject to Tax |
No |
|
Rates for Experienced Employers |
0.06% - 5.76% |
|
Rates for New Employers |
1.00% |
|
Effective Period |
Calendar Year |
|
Voluntary Contributions Allowed |
Yes; due within 30 days of receiving annual rate notice. |
|
North Carolina SUI Tax Details |
|
|
Taxable Wage Base |
$29,600 |
|
Employee Subject to Tax |
No |
|
Rates for Experienced Employers |
0.06% - 5.76% |
|
Rates for New Employers |
1.00% |
|
Effective Period |
Calendar Year |
|
Voluntary Contributions Allowed |
Yes; due within 30 days of receiving annual rate notice. |
North Carolina State Disability Insurance (SDI) Rates
SDI benefits are funded by employees through mandatory payroll deductions from each paycheck. North Carolina, however, doesn't require employers to collect an SDI tax.
Miscellaneous North Carolina Tax Information
Reciprocal Agreement(s)
Reciprocal agreements are when workers only pay taxes in the state where they live, not the state where they work. North Carolina currently has no reciprocal agreements with any other states.
Paid Sick Leave (PSL)
The state of North Carolina doesn’t require employers to collect tax for paid sick leave, nor does the state have a program providing paid sick leave to employees.
North Carolina Employer Registration
The agencies below can help with your state-based employer registration, including best practices, account numbers, and unemployment information. Contact the Department of Revenue for withholding tax topics and the Division of Employment Security for unemployment tax topics.
|
Registration Details |
Department of Revenue |
Division of Employment Security |
|
Phone |
(877) 308-9103 | (919) 707-1170 |
|
Online Registration |
https://www.ncdor.gov/taxes-forms/business-registration/online-business-registration | https://www.des.nc.gov/employers/create-or-update-employer-account |
|
Registration Form |
https://www.ncdor.gov/documents/files/form-nc-br-business-registration-application-income-tax-withholding-sales-and-use-tax-and-other/open | https://www.des.nc.gov/documents/downloads/ncui604/download |
|
Registration Instructions |
Online and paper registration options are available. Account numbers will be issued during the online process or in 2-3 weeks via mail. |
|
|
Employer Self-Service Login |
https://www.ncdor.gov/file-pay/efile-businesses | https://fed.div.des.nc.gov/ofis/citizen/pages/public/login.aspx |
|
Registration Details |
Department of Revenue |
Division of Employment Security |
|
Phone |
(877) 308-9103 | (919) 707-1170 |
|
Online Registration |
https://www.ncdor.gov/taxes-forms/business-registration/online-business-registration | https://www.des.nc.gov/employers/create-or-update-employer-account |
|
Registration Form |
https://www.ncdor.gov/documents/files/form-nc-br-business-registration-application-income-tax-withholding-sales-and-use-tax-and-other/open | https://www.des.nc.gov/documents/downloads/ncui604/download |
|
Registration Instructions |
Online and paper registration options are available. Account numbers will be issued during the online process or in 2-3 weeks via mail. |
|
|
Employer Self-Service Login |
https://www.ncdor.gov/file-pay/efile-businesses | https://fed.div.des.nc.gov/ofis/citizen/pages/public/login.aspx |
Additional North Carolina Payroll Tax Resources
- Department of Revenue Business Registration Checklist
- Department of Revenue Tax Calendar
- Division of Employment Security Tax Rate Information
This information is provided as a courtesy and may be updated at any time. It is not intended as legal or tax guidance. If you have questions or concerns, we encourage you to seek the advice of a qualified CPA, Tax Attorney, or Advisor.
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