Every North Carolina Payroll Tax and How To File Them

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North Carolina employers must pay state income tax and state unemployment tax as part of their regular payroll processes. North Carolina’s state income tax is 4.75% and gets withheld from employee paychecks. Unemployment tax in North Carolina ranges from 0.06% to 5.76% and is paid only by the employer rather than first deducted from employee paychecks.

Here’s what you need to know about North Carolina payroll taxes and how to pay them.

North Carolina State Income Tax

State income tax is money each employee within a state has deducted from their paycheck to pay the state’s government. North Carolina’s state income tax rate is 4.75%, meaning that each employee subject to the state income tax gets up to 4.75% of their paycheck withheld for North Carolina tax.

As an employer in North Carolina, it’s your responsibility to collect and pay this tax by withholding it from your employees’ paychecks.

Employers must first register their business for tax withholding in North Carolina by submitting Form NC-BR to the North Carolina Department of Revenue. This will give you a North Carolina Withholding Identification Number to pay your withheld taxes.

Upon their hiring, employees also need to provide you with Form NC-4 EZ, Form NC-4, or Form NC-4 NRA, depending on which form fits their situation. You’ll use the information in their tax forms to determine their tax rate, along with Form NC-30, Income Tax Withholding Tables and Instructions for Employers.

North Carolina requires employers to file and pay these taxes semiweekly, monthly, or quarterly. Your frequency depends on how much you withhold each month:

  • Semiweekly Filers: Employers who withhold at least $2,000 per month from employee paychecks. Semiweekly payments are due when the employer’s federal tax withholdings are due.
  • Monthly Filers: Employers who withhold at least $250 but less than $2,000 per month. These taxes are due the 15th of the month following the month in which you withheld them.
  • Quarterly Filers: Employers with an average of less than $250 in withholdings per month. Quarterly filers must file and pay their withheld taxes by the last day of the month following the quarter’s closing date.

North Carolina Unemployment Insurance Tax

Most employers are required to pay a payroll tax for the state’s unemployment insurance program, typically abbreviated as SUTA, or State Unemployment Tax Act. Your company falls under North Carolina’s SUTA tax if it has at least one employee in 20 weeks out of the year or has at least $1,500 in payroll in any quarter.

North Carolina’s wage base rate for SUTA tax is higher than many at $29,600. This means that employers must pay SUTA tax on each employee’s first $29,600 in earnings.

So, if the employee makes $25,000, their entire earnings are subject to SUTA tax. But if that employee makes $50,000, only their first $29,600 fall under SUTA taxing requirements.

New employers in North Carolina are taxed at a 1% rate. Other employers have between a 0.06% and 5.76% SUTA rate, which the state assigns to them once they become established and no longer qualify as a new employer.

That means that for any employee earning at least $29,600 in a year, you could pay anywhere from $178 to $1,705 per year for that employee.

How to Submit Your North Carolina Payroll Taxes

After withholding North Carolina payroll taxes, you need to file and pay them with the state. You can submit all state tax payments online via the NC-DOR payment system. All filers, whether they’re semiweekly, monthly, or quarterly, can use the same online portal.

Start by choosing the tax year you’re filing for, which will usually be the most current full tax year. For example, any taxes withheld in 2023 must be filed and paid with 2023 taxes.

Then, enter your North Carolina tax withholding number and re-enter it to verify that you’ve typed it properly. Move onto the next screen to enter the payment amount you’re making for state taxes based on what you withheld. Then, enter your payment account information.

On the final screen, double-check that everything you’ve entered is correct before submitting.

SUTA tax in North Carolina must be filed and paid quarterly by April 30, July 31, October 31, and January 31 via Form NCUI 101 using the NC Department of Commerce Division of Employment Security’s online portal.

If you don’t already have an account, you need to register one to be able to log in and use the payment portal. Sign up as a business here. Then, log in and walk through the guided payment portal to file and submit your quarterly SUTA taxes.

The Official Resources for North Carolina Payroll Taxes

Withholding, filing, and paying payroll taxes in any state can get complicated, especially if you’re trying to do it on your own. North Carolina’s payroll taxes are no exception.

The thing is, you have to get them right from the start. Even messing up payroll taxes for your first quarter can knock you off track for the rest of the year.

Although I’ve covered a lot of information in this guide, you might still have specific questions pertaining to your company’s unique situation. If that’s the case, you’ll want to check official North Carolina taxation resources for the answer.

The NC Division of Social Services State Directory of New Hires hosts the North Carolina New Hire Directory, where you can register your business for new hire reporting and submit new hire reports online. It also offers excellent resources to help you understand the new hire reporting process and stay compliant with state laws.

The North Carolina Department of Revenue website is where you’ll find all the information you’ll need for withholding, filing, and paying state income taxes. It can also come in handy if you receive any notices from the state, like a wage garnishment letter, outlining the steps you need to take to withhold money properly.

Finally, the North Carolina Department of Commerce website is your go-to for any questions regarding the state’s unemployment tax. Here, learn what to do if you get a wage audit, need to adjust your Quarterly Tax and Wage Report, or find out if your company is required to pay SUTA taxes in North Carolina.

How to Have Your North Carolina Taxes Completed For You

One thing you don’t want to do as a North Carolina employer? Handle payroll yourself.

It’s pretty simple when you’re dealing with just a couple of employees. But payroll software is invaluable once you reach 5-10 employees.

Payroll software automates much of the process. Once you input your employees’ tax information from their filled-out new-hire forms, payroll software calculates their tax rates for you, ensuring that you’re always withholding and paying the correct amounts.

Plus, it’ll keep you on track with due dates by filing your taxes for you on time and sending you reminders for anything you can’t automate.

Basically, payroll software is a hub to which you feed information about your employees, and it does what’s needed to remain compliant with taxes and get your employees paid.

Yes, it’s an investment, but it’s one of the most worthwhile investments you can make in your business to avoid unnecessary tax penalties and fees.

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