Key figures
North Carolina payroll
2026, with sources
Withholding and unemployment insurance
Wage withholding is registered with the Department of Revenue, employees complete the state Form NC-4 (the federal W-4 is not accepted for North Carolina), and returns are filed on Form NC-5 on the schedule the Department assigns. North Carolina withholds at a flat 3.99% for tax years after 2025, and there are no local income taxes.
Unemployment insurance runs through the Division of Employment Security. Beginning employers pay 1.0% on the first $34,200 of each employee’s wages in 2026, up from $32,600 in 2025; that is about $342 per employee, and the wage base moves every year with average wages. Rate notices land in the NCSUITS inbox each November or December.
Thresholds a growing team crosses
Workers’ compensation is required at three employees, counting corporate officers. E-Verify is required for employers with 25 or more employees in North Carolina, not counting those hired for terms shorter than nine months.
Take a two-founder startup in Durham that hires its first engineer: with the two officers counted, it has three employees and needs a workers’ compensation policy from that first payroll, plus a withholding account, a DES account and a new hire report within 20 days. At 25 employees it must start verifying every new permanent hire through E-Verify.
Pay rules
The North Carolina Wage and Hour Act requires a departing employee’s final wages by the next regular payday, whether they quit or were let go, and bonuses and commissions on the first regular payday after they can be calculated. Wages can be forfeited only under a policy the employee was told about in advance.
Deadlines
- Monthly filers: 15th of the following month (December due January 31)Withholding return, on the schedule NCDOR assignsForm NC-5
- Last day of the month after the quarterEmployer’s Quarterly Tax and Wage ReportForm NCUI 101
- Within 20 days of hireNew hire report
The federal baseline
This page covers what North Carolina adds. The federal rules underneath it apply here too.
Common questions
When do we need workers’ comp in North Carolina?
Earlier than most founders expect. The Industrial Commission counts corporate officers toward the three-employee threshold even if they opt out of coverage, so two founders who are officers and one hire already make three. The Commission’s own example is a corporation with two officers and one employee, which must have coverage.
Is there anything unusual about North Carolina wage rules?
North Carolina’s minimum wage matches the federal $7.25 an hour. What does matter is the Wage and Hour Act’s rules on paying a departing employee: everything owed is due by the next regular payday, and a mailed check must be trackable and requested in writing.
Payroll next door
- GAGeorgia payrollGeorgia payroll is flat 4.99% withholding for 2026 through the Department of Revenue and unemployment tax at 2.70% on $9,500 through the Department of Labor; there is no paid leave program or local wage tax.
- SCSouth Carolina payrollSouth Carolina payroll is withholding at 1.99% and 5.21% for 2026, unemployment insurance at 1.060% on $14,000 for new employers, written pay terms at hire, final pay within 48 hours, and workers’ comp from four employees.
- TNTennessee payrollTennessee payroll has no state income tax or local wage tax; it is unemployment premiums on the first $7,000 of wages, new-hire reports in 20 days, and workers’ comp from five employees counting officers.
- VAVirginia payrollVirginia payroll withholds up to 5.75%, pays unemployment on the first $8,000, and follows a minimum wage of $12.77 in 2026 that rises to $15.00 by 2028. Paid family leave contributions start April 1, 2028.
How North Carolina compares
- No tax on wagesStates with no state income tax on wagesNorth Carolina: withholds state income tax. 9 of 51 states are on the list.
- Paid leave payrollStates with a paid leave or disability payroll programNorth Carolina: no state program. 16 of 51 states are on the list.
- Local payroll taxStates with city, county or district payroll taxesNorth Carolina: state-level only. 14 of 51 states are on the list.
Founder guides on this
- PeopleContractor or employee? Classification for startupsContractor or employee depends on control, not the contract. The IRS test, state rules, 1099s, payroll registration and the cost of getting it wrong.
- ComplianceFirst-year compliance calendar for a Delaware C-corpDelaware franchise tax, 1099s, the federal return, payroll filings, state annual reports and sales tax: the deadlines a young C-corp misses most, by month.
More of the North Carolina guide
- AccountingAccounting and state tax in North CarolinaCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in North CarolinaSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesPayables and contractors in North CarolinaPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- ComplianceCompliance and filings in North CarolinaRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in North CarolinaCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.