Paycheck Calculator North Carolina - NC

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North Carolina - NC Paycheck Calculator: Hourly and Salary

North Carolina, a 9th most populous and 28th largest state, located in the southeastern region of the United States. The State borders with Georgia and South Carolina to the south, Virginia to the north, Tennessee to the west, and the Atlantic Ocean to the east. Charlotte is its largest city, and Raleigh is the state's capital.

The Tar Heel State is an exceptional place to do business and to live, as the state is known for pristine nature, offering beautiful landscape, moderate climate, affordable living, world-class sports, a culture rich in history and the arts and tons of opportunities for work, education, and recreation and much more.

So are you mesmerized by North Carolina's exceptional opportunities? Got new job offers here? Or have an incredible Business Idea to set up? Then you must read this fantastic guide. Our experts have researched several days and nights to compile a guide that would help you know about:

  • Things you must know before moving to North Carolina
  • State Payroll Facts
  • How to Calculate Paycheck in North Carolina? – to assist:
    • Job Seekers to compare numerous job offers in terms of take-home pay, and to choose the best one.
    • Employees to calculate their Take-Home Pay amount for budgeting or ensuring they have received the right amount from their employer.
    • Small Business Employers to compare several business opportunities in terms of Employment Cost.
    • Employers calculate paycheck for each of their employees using our North Carolina Paycheck Calculator.
  • Federal and State Payroll Laws to make sure Paycheck complies with the Payroll laws.
  • Frequently Asked Questions.

The topics, as mentioned above, would definitely give you an overview of most of the things in North Carolina. So let's get started!


Things You Must Know Before Moving To North Carolina

Mulling over for moving to North Carolina? Here are a few things you must know before taking your life-changing decision:

Cost of Living:

Living in North Carolina will cost you slightly cheaper than somewhere else in the country. The Cost of Living index in North Carolina is 90.6 points, whereas the national average is 100 points. Housing, as well as transportation, are the primary factor that contributes to lower cost of living, while grocery, health, utilities, and miscellaneous expenses are almost similar to the national average.

Cost of Housing:

Buying or renting a house in the Tar Heel State is quite affordable. However, depending on the location. The median home value in the state is $167,900, though renting a house costs you an average of $1179 per month.

Education:

North Carolina is a home to numerous notable educational institutions to secure the bright future of your kids. The most famous being the University of North Carolina at Chapel Hill. Moreover, some others include Duke University, Wake Forest University, North Carolina State University – Raleigh, Chapel Hill-Carrboro City Schools (Chapel Hill), and Watauga County Schools (Boone).

Outdoor Opportunities:

The state is a heaven for nature lovers. From the Great Smoky Mountains to the stunning coastline, there is a lot to explore. Some other main attractions you can explore in the state include Biltmore Estate & Gardens (Asheville), Chimney Rock (Chimney Rock State Park), and Great Wolf Lodge (Concord).

North Carolina also houses some of the great family and kids friendly activities such as Canton Recreation Park, Cataloochee Ski Area, Cataloochee Valley, and Cold Mountain Corn Maze.

Weather:

You can enjoy great weather throughout the year in North Carolina. The climate varies with between regions:

  • The Atlantic Coastal Plain in the east, the Appalachian Mountains in the west and central Piedmont have a humid, subtropical climate to subtropical highland climate.
  • The central and eastern regions have all four seasons with mild winters and hot, humid summers and a distinct fall and spring.

Unfortunately, North Carolina experiences almost every natural disaster, including Tornadoes, Floods, and Hurricanes, Tsunami, Thunderstorms, Snow and Ice Storms, and wildfire, but luckily no volcanic eruptions.

Business and Job Opportunities:

Like other perks mentioned above, the state also offers flourishing business and job opportunities, especially in industries like business, technology, health, aerospace & defense, and education. North Carolina is ranked 29 among the states for the overall economy.

Some of the fastest-growing jobs in the state are credit counselors, statisticians, and nurse practitioners. Moreover, Research Triangle Park, a 7,000-acre monstrosity alone, provides full-time employment to 40,000 residents. Besides, The University of North Carolina at Chapel Hill, Queens University of Charlotte, and Merrill Lynch & Co. are also among major employers, contributing the most to the thriving economy.


Pros and Cons of North Carolina State:

Here is the quick round-up of all the pros and cons of moving to North Carolina:

Pros:
  • Overall great climate
  • Low cost of living
  • Tons of recreational opportunities, including natural beauties, state parks, museums, and historical landmarks.
  • North Carolina's residents are known for its exceptional charm and hospitality.
  • A nice change of pace with a slower way of life
  • Best Foods and Drinks, including amazing Bar B Que and various top restaurants throughout the state.
  • Home to a handful of prestigious universities as well as several esteemed institutes of learning
Cons:
  • Higher crime rate overall, as compared to the national average
  • Slightly higher tax rates
  • You can only enjoy four seasons near to the mountains but not near to the coastline
  • Hot and Humid Summers
  • Satisfactory test score by K-12 Students despite having some excellent colleges and universities

These were some of the essential facts about North Carolina that would have hopefully helped you to make the right decision. Now, let's proceed to our main topic of Paycheck Calculation in North Caroline. But before that, here are some State Payroll Facts you need to know:

North Carolina Payroll Facts:

  • NC's employers withhold federal income tax from their employee's paycheck at the rate ranging between 10% and 37%, distributed in seven tax brackets depending on income level and filing status.
  • Besides, employers also withhold and pay FICA taxes that comprise of Social Security of 12.4% and Medicare of 2.9%. Employees fund half of both taxes, whereas the employer pays the remaining half for each employee. If the annual wage of an employee exceeds $200,000, then employee-only pay Additional Medicare Surtax of 0.9%.
  • Employers also pay FUTA Taxes at a rate of 6% of the first $7,000 each employee earns per year.
  • Employers of North Carolina also withhold state income tax from the employee's paycheck, at a flat rate of 5.25%, regardless of income level and filing status.
  • Luckily, no city or county in North Carolina charged local income tax.
  • The State Minimum Wage rate in North Carolina is equal to the Federal Minimum Wage rate of $7.25 for employees, unless or otherwise exempted. The cash minimum wage rate of Tipped Employees is $2.13, with a maximum tip credit of $5.12.
  • North Carolina doesn't have income tax reciprocal agreement with any state, so non-residents working in North Carolina have to pay taxes in the work state.
  • Employers of NC pay State Unemployment Insurance (SUI) tax at the rate ranging between 0.06% and 5.76%, on the first taxable wage of $25,200 earned by each employee. However, a new employee only pays at a flat rate of 1%.
  • Non-exempted employees in the state receive overtime at the rate of one and half of regular hourly rate for each excess hour worked after forty hours in a workweek.
  • The livable wage in North Carolina for a single individual is $11.98, and for a couple (one working) with two children is $25.86.
  • Average Salary in NC is $50,626, which is significantly lower than the national average of $66,037.
  • According to the United States Census Bureau, the median household income for North Carolina residents is $52,413.

As we are done with relocation to North Carolina and its payroll facts, now it's time to calculate paycheck.


Step 1 - Calculating Gross Pay:

The very first step to calculating the paycheck amount is to determine Gross Pay. It is a wage that an employee earned in the last pay period.

Gross Pay is calculated differently for both hourly and salary-based employees, which is discussed in detail as follow:


Gross Pay for Hourly Employee

Hourly Employees are paid at a mutually agreed pay rate for each hour they work in a pay period. Usually Pay periods for Hourly employees are Hourly, Daily, Weekly, and Bi-Weekly. However, the Federal, State, and Local Wage law requires the employers to set the pay rate equals to or more than the defined Minimum Wage Law for the non-exempted employees.

Hourly employees are also entitled to receive overtime, for each excess hour worked after regular hours in a workday or a workweek. Remember, like Minimum wage, the employers are also required to follow Overtime wage law provided by the federal, state, and local authorities.


Note: All the relevant laws are discussed in detail ahead.

To calculate gross wage for an hourly employee:

  1. Calculate total hours worked in a Pay Period using the data from Timesheet or Timecard.
  2. Multiply Total Hours worked with the Hourly Rate (Pay Rate).
  3. Add overtime hours (if any) worked by the employee.

Quick Tip: You can also use our Timecard with overtime Calculator to calculate Gross Wage for Hourly Employee instantly.

Gross Pay for Salaried Employee

Salaried Employees are paid at the flat amount rather than on an hourly basis. The amount is usually mutually agreed as an Annual Salary, which is then paid in Semi-monthly or Monthly Pay periods.

Salaried employees are mostly exempted from overtime law. However, their salaries must be according to Federal and State Minimum Wage law.

To calculate Gross Pay for Salaried Employees:

  • Divide the "employee's salary" by "number of pay periods." For example: If the employee's annual salary is $25000 and is paid on a semi-monthly pay period, then the employee's Gross Pay would be: $25000 / 24 = $1042.

Don't forget that Supplemental Wages like Bonuses, commissions, tips, paid leaves, fringe benefits, or other taxable wages earned by the employee must be added into the Gross wages.


Step 2 – Subtracting Pre-Tax Deductions (If Any):

Once you are done with Gross Wages, it's time to subtract any Pre-Tax deductions from the gross wage to get taxable wages as Pre-tax deductions are not taxable for federal payroll taxes.

Pre-tax deductions are offered to the employees as benefits like fringe benefits, HSA plans, etc., to reduce their taxable income, hence, increasing their take-home pay amount. Remember, not all benefits are exempted from taxes, so choose the pre-tax deductions wisely.

Some of the common pre-tax deductible benefits are:

  • FSA - Flexible Spending Accounts
  • HSA - Health Savings Accounts
  • Retirement savings accounts like a traditional 401(k)
  • Some of the Fringe Benefits
  • health insurance
  • accident insurance
  • dental and vision insurance
  • Commuter Benefits
  • Short-Term Disability

Note: Pre-Tax deduction rate, contribution limits, special tax withholding rules change from year to year, according to inflation and costs of living by the federal government. Therefore, you must keep yourself updated with all rates before making any deductions.

Many Taxpayers find it hard to itemize their deductions to calculate taxable wages, for which they go for standard deductions, that varies according to the filing status, as shown in the table below:

All Filers(Updated Dec 2019)
Filing Status Standard Deduction Amount
Single Filers $12,200
Married, Filing Jointly $24,400
Married, Filing Separately $12,200
Head of Household $18,350

Step 3 – Calculate and Subtract Federal Taxes:

Once you have determined the taxable wages, it's time to deduct Federal Income taxes for the Taxable wages.

IRS requires the employers to withhold federal income tax from the employee's paycheck, according to the details provided by the employee on Form W-4. The employee fills this form at the start of the job. The form includes all the necessary information, including income, number of allowances to claim, number of dependents, amount of additional taxes to deduct, and much more.

The employees are required to keep their Form W-4 up to date with all their current information, especially marriage, divorce, or child's birth.

The federal income tax is charged according to the tax brackets in which the taxpayer's income falls. The latest income tax brackets and rates are as follow:

Single Filers
Taxable Income Rate
$0 - $9,700 10%
$9,700 - $39,475 12%
$39,475 - $84,200 22%
$84,200 - $160,725 24%
$160,725 - $204,100 32%
$204,100 - $510,300 35%
$510,300+ 37%

Married, Filing Jointly
Taxable Income Rate
$0 - $19,400 10%
$19,400 - $78,950 12%
$78,950 - $168,400 22%
$168,400 - $321,450 24%
$321,450 - $408,200 32%
$408,200 - $612,350 35%
$612,350+ 37%

Married, Filing Separately
Taxable Income Rate
$0 - $9,700 10%
$9,700 - $39,475 12%
$39,475 - $84,200 22%
$84,200 - $160,725 24%
$160,725 - $204,100 32%
$204,100 - $306,175 35%
$306,175+ 37%

Head of Household
Taxable Income Rate
$0 - $13,850 10%
$13,850 - $52,850 12%
$52,850 - $84,200 22%
$84,200 - $160,700 24%
$160,700 - $204,100 32%
$204,100 - $510,300 35%
$510,300+ 37%

Step 4 – Deduct FICA Taxes:

Besides, Federal Income Tax, the IRS also requires the employer to withhold FICA tax (15.3%) for the employee's paycheck and also requires the employer to pay an equal amount for each employee.

Federal Insurance Contributions Act (FICA) Taxes comprises of two types of taxes which are as follow:


  1. Social Security:

A total of 12.4% of social security tax is charged from which 6.2% is withheld from the employee's gross, and the employer pays the matching 6.2%. However, Social Security is only charged on the maximum taxable earnings of $137,700 for 2020.


  1. Medicare:

A total of 2.9% of Medicare is charged, from which 1.45% is withheld from the employee's gross, and the employer pays the matching 1.45%. Unlike Social Security, there is no maximum table earning limit for this tax. However, an additional surtax of 0.9% is charged as Additional Medicare Surtax on the employees having income over the specified level along with filing status, which is as follow:

Income Over Filing Status
$250,000 Married Filing Jointly
$125,000 Married Filing Separately
$200,000 Single

Note: Employers are not required to pay an equal amount for Additional Medicare Surtax.

Step 5 – Payment of FUTA Taxes

IRS requires the employer to pay another tax, known as The Federal Unemployment Tax Act (FUTA) Tax. This tax is paid at the rate of 6% on the first $7000 earned by each employee in a year. However, the IRS doesn't require the employees to contribute to it.

The employers who pay State Unemployment Insurance (SUI) tax in full and on time are given relieving FUTA tax credit of up to 5.4%, which saves a whopping 90% from FUTA Tax.


Step 6 – Subtract Post-Tax Deductions (If any):

Post-tax deductions (after-tax deductions) is an amount the employer takes out from the employee's paycheck after taxes. Therefore, it does not affect taxable wages and the amount of tax payable.

Here are some of the types of post-tax deductions that employee may voluntarily choose:

  • Charitable contributions
  • Disability insurance
  • Garnishments
  • Specific Retirement Plans like Roth 401(k)
  • Life Insurance

Step 7 – Withhold State Payroll Taxes:

As you are done with Federal Payroll Taxes, now it's time to discuss State Payroll Taxes. The North Carolina State charges State Income Tax on the employees. Moreover, employers are required to pay State Unemployment Insurance Tax.


State Income Tax:

North Carolina levies state income tax at the flat rate of 5.25%, regardless of income level and filing status.

The employer withholds this tax from the employee's paycheck according to the details provided by the employee in the Form NC-4. This form is filled by the employee while joining the job. Employees are required to keep the form updated with any significant life events like marriage, child's birth, and divorce.


State Unemployment Insurance (SUI) Tax:

The State Unemployment Insurance (SUI) Tax is an employer-funded program that provides temporary income to unemployed workers who have lost their job without fault of their own.

The state doesn't charge in North Carolina State Disability Insurance (SDI) Tax. However, it does require the employers to pay North Carolina State Unemployment Insurance (SUI) tax, at the rate ranging from 0.06% to 5.76% on a first $25,200 earned in wages by each employee in a year. However, new employers are given relief as they only have to pay a flat rate of 1%.


Note: SUI Rates for North Carolina Employers changes with time. Therefore, you are required to keep a check on notices to make sure you have paid the right amount.

Step 8 – Withhold Local Payroll Taxes:

No city or county In North Carolina charges any Local Income Tax.

Step 9 – Calculate Pay Check:

Now that you are done with all payroll taxes and calculated the net take-home pay of an employee, it's time to cut the paycheck. Moreover, you, as an employer, must pay your portion of FICA tax along with FUTA and SUI tax in full and on time regularly.


Federal and North Carolina Payroll Laws:

  • The State requires employers to pay their employees on regular pay frequencies, whether it be daily, weekly, daily, weekly, bi-weekly, semi-monthly, or monthly. However, bonuses, commissions, or similar forms of wages can be paid less frequently.
  • Both Federal and North Carolina Law require the employers to pay at least the minimum wage rate of $7.25 to their employees, unless or otherwise exempted. However, Agricultural and Domestic Employees are not covered in State law but federal law. Moreover, Tipped employees are required to receive at least the cash minimum wage rate of $2.13, with a maximum tip credit of $5.12.
  • Both Federal and North Carolina Law requires the employers to pay overtime to their non-exempted employees at 1 and 1/2 times the regular rate of pay for every hour worked over 40 hours per week. The professions exempt from overtime requirements includes:
    1. Babysitters and other personal caretakers;
    2. Executives, Administrative and certain professional employees;
    3. Newspaper delivery workers;
    4. Part-time police officers and firefighters;
    5. Computer employees;
  • Youth Employees (age 15 and 16 years) are required to receive 30 minutes of an UNPAID lunch break after every five consecutive hours of work. However, employees age 16 years and older aren't required to receive either paid or unpaid lunch or rest breaks.
  • North Carolina law doesn't provide any law that requires the employer to provide either paid or unpaid vacation benefits, sick leaves, holiday leaves, jury duty leaves, voting leaves, and severance pay. However, employers (those with at least 50 employees) are entitled to FMLA protections to pay their covered employees with at least 12 weeks of unpaid leave in 12 months.
Also Check: North Carolina Sales and Reverse Sales tax Calculator to Calculate the amount of tax included in a gross price as well as the amount you should add to a net price.

FAQs

Answer: Following are the type of taxes and their rates taken out of your paycheck in North Carolina – NC:

  • Federal Income Tax: This tax is charged at the rate ranging from 0% to 37%, distributed in seven tax brackets depending on income level and filing status.
  • FICA Tax: This tax is charged by the federal, which comprises of Social Security of 6.2% and Medicare of 1.45%. If an employee's annual income is more than $200,000 than the employee will be charged an Additional Medicare surtax of 0.9%.
  • State Income Tax: The state charges this tax at a flat rate of 5.25%, regardless of income level and filing status.

Answer: No, No city or county in North Carolina levies local withholding tax on paychecks.

Answer: Employers in North Carolina withhold 5.25% from the taxable wages of their employees as state income tax.

Answer: Bonuses are charged at a tax rate of 5.35% in North Carolina.

Answer: The State Minimum wage rate in North Carolina is $7.25 for all employees, unless or otherwise exempted. Moreover, Tipped Employees are required to receive at least the cash minimum wage rate of $2.13, with a maximum tip credit of $5.12.

Answer: The Average Salary in North Carolina State is $50,626, whereas the national average is $66,037.

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