NORTH CAROLINA PAYCHECK CALCULATOR
Flat 3.99% state tax Zero local income tax Social Security exemptNorth Carolina’s flat income tax hit its lowest point in state history on January 1, 2026, dropping to 3.99% from 4.25% the year before. This is the tail end of a phase-down that started back in 2014, when North Carolina scrapped its old graduated system, which used to top out at 7.75%, for a single flat rate that began at 5.8%. The North Carolina Department of Revenue confirms the schedule directly on its site: 4.99% in 2022, 4.75% in 2023, 4.5% in 2024, 4.25% in 2025, and now 3.99% for 2026 and beyond, unless the legislature changes course.
A North Carolina paycheck keeps things simple. There’s no city or county income tax anywhere in the state, and no state disability insurance or paid family leave withholding either. What actually comes out of a paycheck is federal income tax, the flat North Carolina state tax, Social Security, and Medicare. If you’re comparing North Carolina against a neighbor, our Georgia paycheck calculator, Virginia paycheck calculator, South Carolina paycheck calculator, and Tennessee paycheck calculator all use the same 2026 federal numbers, so the comparison lines up directly.
Estimate Your 2026 North Carolina Take-Home Pay
Every Deduction on a North Carolina Paycheck
Federal income tax: Withheld using the 2026 IRS brackets, seven rates from 10% to 37%, applied after your federal standard deduction ($16,100 single, $32,200 married filing jointly, $24,150 head of household).
North Carolina state income tax: A flat 3.99% on taxable income after North Carolina’s own standard deduction ($12,750 single or married filing separately, $25,500 married filing jointly, $19,125 head of household). No brackets, everyone pays the same rate above the deduction.
Social Security tax: 6.2% of wages up to the 2026 taxable maximum of $184,500. Once year-to-date wages cross that number, Social Security withholding stops for the rest of the year.
Medicare tax: 1.45% of every dollar of wages, no cap. High earners pay an extra 0.9% on wages above $200,000 (single or head of household) or $250,000 (married filing jointly), withheld from the employee only.
Local income tax: None. North Carolina doesn’t let any city or county add a payroll tax on top of the state rate.
State disability insurance / paid family leave: None. North Carolina has no state-run disability or paid leave program funded through payroll withholding.
North Carolina’s Flat Tax: The Full Phase-Down
North Carolina has cut its flat income tax rate every single year since 2022, and 2026 marks the lowest point yet under the law currently on the books. Here’s the full history, straight from the NC Department of Revenue’s own tax rate schedule.
| Tax Year | Flat Rate | Note |
|---|---|---|
| 2015 to 2016 | 5.75% | Early years of the flat-tax system, which began in 2014 |
| 2017 to 2018 | 5.499% | |
| 2019 to 2021 | 5.25% | |
| 2022 | 4.99% | First cut under the accelerated 2021 reform schedule |
| 2023 | 4.75% | |
| 2024 | 4.50% | |
| 2025 | 4.25% | |
| 2026 | 3.99% | Current rate, per NCDOR’s official tax rate schedule |
Further cuts to 3.49% in 2027, and potentially down to 2.49% in later years, are written into the law but depend on North Carolina hitting its revenue triggers each year. Nothing beyond 2026 is locked in yet, so treat those numbers as a direction, not a guarantee.
North Carolina vs. Nearby States at $70,000 (Single Filer)
Here’s what a single filer earning $70,000 actually keeps in North Carolina compared with three states people in the region commonly cross-shop against, using each state’s 2026 rules and the same federal numbers throughout.
| State | State Tax Structure | State Tax Owed | Estimated Net Pay |
|---|---|---|---|
| North Carolina | Flat 3.99% | $2,284 | $55,791 |
| Tennessee | No income tax | $0 | $58,075 |
| Georgia | Flat 4.99% | $2,745 | $55,331 |
| Virginia | Progressive, up to 5.75% | $3,264 | $54,811 |
Figures assume each state’s 2026 standard deduction, no additional pre-tax withholdings, and include federal tax, state tax, Social Security, and Medicare. Virginia’s top rate of 5.75% kicks in on taxable income above just $17,000, so most full-time earners end up paying close to that top rate on the bulk of their income.
North Carolina’s Tax Trade-Offs, the Full Picture
A flat rate under 4% looks good in isolation, but it’s worth seeing how North Carolina stacks up across every major tax category, not just income tax.
| Tax Type | North Carolina | US Average / Context |
|---|---|---|
| Income tax | Flat 3.99% | One of the lowest flat rates among states that tax income |
| Sales tax (state + avg. local) | 6.99% combined (4.75% state) | Slightly below the national population-weighted average of 7.53% |
| Property tax (effective rate) | 0.66% | Well below the roughly 0.9% to 1% national average effective rate |
| Estate / inheritance tax | None | Most states also don’t levy one; only a minority still do |
| Overall competitiveness | Ranked 13th of 50 | 2026 State Tax Competitiveness Index, Tax Foundation |
If You’re Retired or a Government Employee in North Carolina
Social Security recipients: North Carolina fully exempts Social Security benefits from state tax, no income limit, no phase-out. If Social Security is your main source of retirement income, North Carolina simply doesn’t touch it.
Government retirees, the Bailey Settlement: This one catches people off guard if they don’t know the exact date. Under a 1998 legal settlement, retirement benefits from federal, state, and local government pension plans, including North Carolina’s own Teachers’ and State Employees’ Retirement System, are fully exempt from state tax, but only for retirees who had five or more years of creditable service as of August 12, 1989. Miss that vesting date and the same pension gets taxed like any other retirement income at the flat 3.99% rate.
Military retirees: Military retirement pay is deductible from North Carolina income for retirees who served at least 20 years, or who were medically retired, effectively removing it from state tax.
Federal Tax on $70,000: The Math, Step by Step
Federal brackets are marginal, so each rate only applies to the slice of income sitting inside that bracket. Here’s a single filer earning $70,000 in 2026, using the $16,100 standard deduction.
| Step | Calculation | Tax |
|---|---|---|
| Taxable income | $70,000 gross − $16,100 standard deduction | $53,900 |
| 10% bracket | $0 to $12,400 taxed at 10% | $1,240 |
| 12% bracket | $12,400 to $50,400 taxed at 12% | $4,560 |
| 22% bracket | $50,400 to $53,900 taxed at 22% | $770 |
| Total federal tax | Effective rate: 12.2% of taxable income | $6,570 |
Add North Carolina’s flat 3.99% on top of that (about $2,284 on $57,250 of North Carolina taxable income after its own $12,750 deduction), plus $4,340 in Social Security and $1,015 in Medicare, and this filer’s total tax bill lands around $14,209, leaving roughly $55,791 in net pay for the year before any 401(k) or insurance deductions.
Frequently Asked Questions
What is North Carolina’s state income tax rate in 2026?
North Carolina charges a flat 3.99% on all taxable income for tax years beginning in 2026, down from 4.25% in 2025. This is the lowest the rate has been since the state moved off a graduated system in 2014, when it started at 5.8%. Every dollar is taxed at the same rate, there are no brackets.
Does North Carolina have local or city income tax?
No. North Carolina does not allow cities or counties to add their own income tax. Charlotte, Raleigh, and every other municipality fund themselves through property tax and their share of state sales tax revenue instead.
Is Social Security taxed in North Carolina?
No. North Carolina fully exempts Social Security benefits from state income tax, regardless of how much other income a retiree has. Other retirement income, like a 401(k) or IRA withdrawal or a private pension, is generally taxed at the state’s flat rate.
What is the North Carolina standard deduction for 2026?
North Carolina’s standard deduction for the 2026 tax year is $12,750 for single filers and married people filing separately, $25,500 for married couples filing jointly, and $19,125 for heads of household. These amounts are set by the state and are lower than the federal standard deduction.
What is the Bailey Settlement and who qualifies?
The Bailey Settlement is a 1998 legal resolution that fully exempts retirement benefits from federal, state, and local government pension plans from North Carolina income tax, but only for retirees who had five or more years of creditable service as of August 12, 1989. Retirees who don’t meet that vesting date generally have their government pension taxed like any other retirement income.
How much of my paycheck goes to taxes in North Carolina?
It depends on your income and filing status, but a single filer earning $70,000 in 2026 pays roughly $6,570 in federal tax, about $2,284 in North Carolina state tax, $4,340 in Social Security tax, and $1,015 in Medicare tax, leaving close to $55,791 in take-home pay before any 401(k), health insurance, or other pre-tax deductions.
The Bottom Line
North Carolina’s combination of a falling flat rate, no local income tax, and a genuinely competitive property tax rate puts it near the top of the pack among states that still tax income at all. What sets it apart from a true no-tax state like Tennessee isn’t just the rate itself, it’s how predictable the whole system is: no brackets to track, no city add-ons to check block by block, and a clear published schedule for where the rate is headed next. Retirees drawing Social Security get a genuine break, and anyone with a government pension should check that August 1989 vesting date carefully, since it’s the single biggest factor in whether that income gets taxed at all.