Navigating North Carolina Payroll Taxes
While federal payroll tax obligations are essential, staying compliant with state-level requirements is equally important for
your business.
This guide covers everything you need to know about North Carolina payroll taxes, including essential forms, filing deadlines, and reporting procedures.
North Carolina New Hire Reporting
Employers in North Carolina are required to report newly hired and rehired employees to the North Carolina New Hire Directory, administered by the Department of Health and Human Services.
This ensures compliance with state and federal regulations, aiding in child support enforcement, fraud prevention, and maintaining accurate employment records.
Who must report
All employers who hire or rehire employees in North Carolina must report. This includes out-of-state employers with employees working in North Carolina. Reporting is mandated under state law (G.S. 110-129.2) and federal law (PRWORA).
What to report
- Employee Details: Name, address, Social Security Number, date of birth (optional)
- Employer Details: Business name, address, Federal Employer Identification Number (FEIN)
- Hire Date: Date the employee was hired or rehired
When to report
Reports must be submitted within 20 days of the employee’s date of hire or rehire. Failure to report within the timeframe can result in penalties under state and federal law.
How to report
You can submit your new hire reports using the following methods:
1. Online (Recommended):
- Visit the North Carolina New Hire Reporting Portal.
- Register with your FEIN and contact details.
- Complete and submit the new hire form.
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2. Fax:
- Download the New Hire Reporting Form (PDF).
- Complete the form and fax it to (866) 257-7005.
- Keep a copy of the fax confirmation for your records.
3. Mail:
Complete the New Hire Reporting Form and mail it to:
North Carolina New Hire Directory
P.O. Box 427
Norwell, MA 02061
Use certified or trackable mail for proof of delivery.
New Hire Reporting Penalties:
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Failure to report a new employee (timely, complete, correct): Up to $25 per failure (per newly hired employee).
Learn More - Conspiracy between employer and employee to not report (not to supply required information or report false/incomplete information): Up to $500 per newly hired employee.
Corrections
- Suppose you’ve made an error in your New Hire Report (e.g., wrong employee details or mistakenly reported a hire). In that case, you can file a correction by submitting an updated report with the correct information.
- North Carolina allows you to make corrections through the New Hire Reporting Portal. If you need to remove an incorrectly reported hire, you can follow the specific instructions provided by the portal.
North Carolina Withholding Tax Forms (NC-5 and NC-5Q)
North Carolina employers must ensure proper filing of withholding forms to remain compliant with state payroll tax requirements.
The purpose of these forms is to report the amount of state income tax that has been deducted from employees' wages and to ensure the timely remittance of these taxes to the state.
Who Must File
All employers in North Carolina, regardless of business size, must file withholding forms. This includes businesses, nonprofit organizations, and government agencies that employ workers subject to North Carolina state income tax. The type of form you file is based on the amount of North Carolina income tax withheld.
Even if no tax is withheld, you must still file these forms on time if you have an active withholding tax account with the NCDOR. Failure to file can result in penalties.
Form Types
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Form NC-5: Withholding Return
Reports and remits state income tax withheld from employees' wages. Employers are assigned a filing frequency based on the amount of tax withheld:
- Quarterly Filers: Employers who withhold less than $250 per month in state income tax.
- Monthly Filers: Employers who withhold $250 to $2,000 per month in state income tax.
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Form NC-5Q: Quarterly Income Tax Withholding Return
Used by semiweekly payers to report and remit state income tax withheld for the entire quarter.
What to Report
- Employer Information: Name, address, FEIN, or SSN.
- Total Wages Paid: During the reporting period.
- Total State Income Tax Withheld: From employees.
- Adjustments: For overpayments, underpayments, or credits.
When to File
The filing deadlines are as follows:
Semiweekly Filers
- An employer who withholds North Carolina income on a semiweekly schedule must pay the tax withheld at the same time it is required to pay the tax withheld on the same wages for federal income tax purposes.
Monthly Filers
- An employer who withholds North Carolina income tax per month must file a monthly Withholding Return, Form NC-5, and pay the tax by the 15th day of the month following the month in which the tax was withheld.
- Exception: The return and payment for the month of December are due by January 31.
Quarterly Filers
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An employer who withholds North Carolina income tax quarterly must file a quarterly Withholding Return, Form NC-5, and pay the tax quarterly. The quarterly return and payment are due by the last day of the month following the end of the calendar quarter.
- Q1 (Jan-Mar): Due April 30
- Q2 (Apr-Jun): Due July 31
- Q3 (Jul-Sep): Due October 31
- Q4 (Oct-Dec): Due January 31 of the following year
How to File
You have several filing options to submit the withholding tax forms to the NCDOR:
1. Online (Preferred)
- Visit the NCDOR Online Filing and Payments System.
- Register for an account if you haven’t already.
- Complete the NC-5 or NC-5Q forms and submit them electronically.
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2. By Mail
- Download the required withholding tax forms from the NCDOR website.
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Complete the forms and mail them to:
North Carolina Department of Revenue
PO Box 25000
Raleigh, NC 27640 - Payment by check can be included with the mailed form.
Employers reporting 10 or more wage items must file their report online. Failure to do so will result in a penalty.
How to Pay
Form NC-5P is the Withholding Payment Voucher used to submit payments accompanying the withholding returns. This form helps ensure that the payment is properly credited to the employer's withholding account.
- If you discover that you underpaid the tax for a previous period, complete Form NC-5PX and include the tax and interest with the voucher.
- If you overpaid the tax withheld for a prior payday, you may reduce the payment of the tax withheld for a subsequent payday by that amount, if both paydays are in the same quarter.
You can file your North Carolina withholding return and pay the tax online. Payments can be made online by bank draft (free), or credit or debit card using Mastercard or Visa ($2 convenience fee for every $100 paid). To file your withholding return and pay the tax online, visit ncdor.gov/file-pay.
North Carolina Withholding Penalties
Employers in North Carolina must file and pay withholding taxes on time using Form NC-5 (Monthly or Quarterly Return of Income Tax Withheld) and Form NC-5Q (Quarterly Return for Monthly Filers).
Missing deadlines or underpaying can lead to penalties and interest under N.C. General Statutes §105-236 and guidance from the North Carolina Department of Revenue (NCDOR).
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If You File Late
If you don’t file your withholding return by the due date, you may be charged a penalty of 5% of the tax due for each month (or part of a month) the return is late, up to a maximum of 25%.
-
If You Pay Late
If you file your return on time but fail to pay the withheld tax by the due date, you’ll be charged a late payment penalty of 10% of the unpaid tax.
Corrections
-
Form NC-5Q: File a paper NC-5Q with the word AMENDED across the top. The form should be mailed to: North Carolina Department of Revenue, Post Office Box 25000, Raleigh, North Carolina 27640-0605.
To submit a payment with the corrected form, you should use Form NC-5PX.
- Form NC-5: Use Form NC-5X to amend a previously filed withholding return, Form NC-5.
North Carolina Unemployment Insurance (UI) Reporting — Form NCUI-101
North Carolina employers use Form NCUI-101 to report unemployment contributions to the Division of Employment
Security (DES).
This ensures the state’s unemployment insurance fund is accurately maintained, supporting benefits for employees who are
out of work.
Who Must File
All North Carolina employers with one or more employees must file the NCUI-101 form.
This includes businesses of all sizes, nonprofit organizations, and government agencies required to report and pay unemployment insurance contributions.
You must file the NCUI-101 even if no contributions are due for the quarter.
Taxable Wage Base & Rates
The SUI tax is calculated based on a specific wage base and your assigned tax rate.
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Annual Wage Base
For 2025, the North Carolina unemployment insurance taxable wage base is $32,600 per employee. Wages above this amount are not taxed for unemployment insurance purposes. Learn More
-
Contribution Rate
Rates are assigned annually by the North Carolina DES and vary depending on the employer’s experience rating. New employers are generally assigned a standard rate of 1.0%. Learn More
What to Report
Employers must report the following on the NCUI-101 form:
- Employee Wages: Total wages paid to employees during the reporting period.
- Employer Details: Employer’s name, address, and North Carolina UI account number.
- Quarterly Report Data: Total wages subject to unemployment insurance and the contribution owed.
When to File
The NCUI-101 is filed quarterly. Filing deadlines are:
- Q1 (Jan-Mar): Due April 30
- Q2 (Apr-Jun): Due July 31
- Q3 (Jul-Sep): Due October 31
- Q4 (Oct-Dec): Due January 31 of the following year
How to File
Employers have multiple options for filing the NCUI-101:
1. Online (Recommended):
- Visit the NC DES Employer Portal.
- Register or log in to your account
- Complete the NCUI-101 form with employee wages and contribution details
- Submit the form electronically—this reduces errors and ensures timely submission
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2. By Mail:
- Download the NCUI-101 form from the DES website
- Complete all employer and wage details
-
Mail the completed form to:
North Carolina Division of Employment Security
P.O. Box 25903
Raleigh, NC 27611-5903
3. By Fax:
- You can also fax the completed form to: (919) 733-7704
- Keep a copy of your fax confirmation for proof of submission.
Tax Payments
The NCUI-101 itself does not require direct payment submission.
Employers must remit unemployment insurance contributions separately through DES’s electronic payment system (EFT) or other approved methods.
North Carolina Unemployment Insurance Penalties
Employers in North Carolina must file quarterly wage reports (Form NCUI-101) and pay unemployment insurance (UI) taxes on time.
Failing to do so can result in penalties and interest as outlined by the North Carolina Division of Employment Security (DES) under N.C. General Statute §96-10.
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Late Filing Penalty
If you file your NCUI-101 report after the due date, you may be charged a penalty of 5% of the tax due for each month (or part of a month) the report is late, up to a maximum of 25%.
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Late Payment Penalty
If you file your NCUI-101 report on time but fail to pay the contributions by the due date, a 10% penalty is applied to the unpaid amount.
NCUI-101 Corrections
- If an error occurs on the NCUI-101 form, such as incorrect wages or misreported contributions, a corrected form must be submitted.
- Corrections should be made as soon as possible, preferably before the next quarter’s filing to avoid potential fines or penalties.
-
Contact the North Carolina Division of Employment Security (DES) for guidance on resubmitting corrected
NCUI-101 forms.
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- New Hire Reporting
- NC-5 & NC-5Q
- NCUI-101 Reporting
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Frequently Asked Questions
What happens if I miss the 20-day window for New Hire Reporting in NC?
Late reporting may subject you to penalties under state and federal law. Contact the NC New Hire Directory immediately to notify them and correct the reporting.
Can a third party submit New Hire reports for me?
Yes, employers may authorize agents or payroll service providers to report new hires on their behalf via the NC New Hire portal and bulk submission tools.
If I have employees in multiple states, including NC, do I need separate new hire reports?
Yes, you must file new hire reporting separately for each state. NC’s requirements apply only to employees working in North Carolina.
My business had no payroll during a quarter for withholding or UI — do I still need to file?
Yes, if your business maintains an active withholding or unemployment account in NC, you must file “zero wage” returns (NC-5/NC-5Q or NCUI-101) on time even if no wages or tax were due.
How long should I retain payroll and filing records for NC state reporting?
Retain payroll, withholding, UI, and New Hire records for at least 4 years, or longer if required by federal law or your industry.
Can I correct a filed NC-5, NC-5Q, or NCUI-101 after the due date?
Yes — you can file amended returns (e.g., NC-5X) or adjustments (NCUI-685) to correct errors, but you may face interest or penalties on underpayments.
Do I need to file NCUI-101 if I only employ independent contractors?
Generally, no — only employees count for unemployment insurance. But always verify worker classification under state law, as misclassification risks exist.
If my business closes or ceases employing individuals in NC, what should I do?
Notify NCDOR and DES in writing, settle any final returns and contributions, and formally request account closure.
Are there penalties or interest for late NC withholding or UI payments?
Yes, NC imposes interest and penalties on late payments and filings. The amounts depend on the length of delay and the outstanding balance.
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