North Carolina employers must handle several payroll tax obligations: flat 4.5% state income tax withholding, SUI contributions (0.06%–5.76% on the first $31,400 per employee), plus all federal payroll taxes (FICA at 7.65%, FUTA at 0.6% on the first $7,000). New employers pay an SUI rate of 1.0%.
Table of Contents
Overview: North Carolina Payroll Tax Landscape
Running payroll in North Carolina means managing both state and federal tax obligations. Here is the complete picture of what North Carolina employers owe:
| Tax | Who Pays | Rate | Wage Base |
|---|---|---|---|
| North Carolina Income Tax | Employee (employer withholds) | flat 4.5% | All wages |
| North Carolina SUI | Employer | 0.06%–5.76% | $31,400 |
| Social Security (FICA) | Split 50/50 | 6.2% each | $176,100 |
| Medicare (FICA) | Split 50/50 | 1.45% each | No limit |
| FUTA | Employer | 0.6% (after credit) | $7,000 |
State Income Tax: flat 4.5%
North Carolina uses a flat income tax rate of 4.5%, continuing a downward trend from recent years. The state has been systematically reducing its rate from the former 5.25%.
As an employer, you are responsible for withholding North Carolina state income tax from every employee’s paycheck based on the withholding tables published by the North Carolina Department of Revenue. You must remit these withholdings on the schedule assigned by the state — typically monthly or quarterly depending on your total tax liability.
For details, visit the North Carolina Department of Revenue website.
💼 From the Payroll Desk
North Carolina’s high SUI wage base ($31,400) surprises employers who are used to states with $8,000–$10,000 bases. You’ll be paying unemployment tax on far more wages per employee here. Factor this into your labor cost projections when expanding to NC.
State Unemployment Insurance (SUI)
North Carolina SUI is an employer-paid tax on the first $31,400 of each employee’s wages per year. New employers pay 1.0%. Experienced employers are rated between 0.06%–5.76% based on their claims history.
SUI is administered by the North Carolina Division of Employment Security. You must register for an SUI account when you hire your first employee and file quarterly wage reports.
For a detailed breakdown, see our North Carolina SUI Rates 2026 guide.
Federal Payroll Taxes
On top of North Carolina state obligations, every employer must handle federal payroll taxes:
- FICA (Social Security + Medicare): 7.65% employer share, 7.65% employee share. Social Security applies to the first $176,100; Medicare has no cap.
- FUTA: 0.6% employer-only tax on the first $7,000 per employee (after state SUI credit).
- Federal Income Tax Withholding: Based on employee W-4 and IRS tables. Employer withholds but does not pay.
For a complete breakdown, see our Federal Payroll Tax Basics guide.
Filing Schedules and Deadlines
Key deadlines for North Carolina employers:
- Federal 941: Quarterly — due by the last day of the month after each quarter
- Federal 940 (FUTA): Annual — due January 31
- North Carolina SUI: Quarterly wage reports — due by the last day of the month after each quarter
- North Carolina Income Tax Withholding: Monthly or quarterly, based on your liability
- W-2s: Due to employees by January 31, filed with SSA by January 31
Penalties for Late Filing and Payment
Late or missed payroll tax payments result in penalties at both the federal and state level:
- IRS: Failure-to-deposit penalties range from 2% to 15% depending on how late
- North Carolina: State penalties vary but typically include interest on unpaid balances plus fixed or percentage-based penalty fees
- Trust fund penalty: The IRS can hold business owners personally liable for unpaid withholding taxes (the “Trust Fund Recovery Penalty”)
Frequently Asked Questions
What payroll taxes do North Carolina employers pay?
North Carolina employers pay federal payroll taxes (FICA, FUTA) and state unemployment insurance (SUI) on the first $31,400 of wages per employee. Employers also withhold North Carolina state income tax (flat 4.5%) from employee paychecks.
What is the North Carolina SUI wage base for 2026?
The North Carolina SUI wage base for 2026 is $31,400. Employers pay SUI on the first $31,400 of each employee's wages per year.
What is the new employer SUI rate in North Carolina?
New employers in North Carolina typically pay an SUI rate of 1.0%. Experienced employer rates range from 0.06%–5.76% based on claims history.
When are North Carolina payroll taxes due?
North Carolina SUI taxes are typically filed quarterly. State income tax withholding is remitted on the schedule assigned by the North Carolina Department of Revenue — monthly or quarterly based on liability. Check with the North Carolina Department of Revenue for current due dates.
Does North Carolina have local payroll taxes?
Some North Carolina municipalities may impose local taxes. Check with local authorities for specific requirements.
Simplify North Carolina Payroll
Gusto automatically calculates, withholds, and deposits both federal and North Carolina payroll taxes. It files your quarterly and annual returns, too. Trusted by over 300,000 small businesses.
Legal & Tax Disclaimer
This article is for general informational purposes only and does not constitute legal, tax, or professional advice. Employment laws, tax regulations, and compliance requirements change frequently. The information on this page reflects our understanding as of February 2026 and may not reflect recent changes in federal or North Carolina state law.
Do not act or refrain from acting based solely on the information in this article. Always consult a qualified attorney, CPA, or HR professional familiar with North Carolina law before making payroll or compliance decisions for your business.