North Carolina paychecks in 2026: what changed
North Carolina's income tax rate fell again for 2026. Here is what changed.
The changes
- New federal withholding tables. The IRS updated Publication 15-T for 2026, including changes from the 2025 tax law. The standard deduction is $16,100 single, $32,200 married filing jointly, and $24,150 head of household.
- Social Security wage base: $184,500 (up from $176,100). If you earn more, Social Security stops later in the year.
- Tips and overtime deductions for 2025–2028 — see below.
- N.C. income tax rate: 3.99% (down from 4.25% in 2025); the withholding rate is 4.09%.
- Minimum wage: still $7.25, the federal rate.
Tips and overtime in 2026
New federal deductions apply for 2025 through 2028: up to $25,000 for qualified tips, and up to $12,500 ($25,000 for joint filers) for the extra "half" of time-and-a-half overtime. Both phase out above $150,000 of income ($300,000 joint).
These are deductions on your tax return. Your employer still takes Social Security and Medicare out of tips and overtime, and still withholds income tax unless you tell it otherwise. If you expect to claim them, you can put the expected amount in Step 4(b) of your W-4 (and in the Step 4(b) box above) so less income tax is withheld during the year.
Work out your 2026 North Carolina paycheck →
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Sources
- IRS Publication 15-T (2026), Federal Income Tax Withholding Methods — Worksheet 1A and the annual percentage-method tables
- IRS Publication 15 (2026), Employer's Tax Guide — Social Security and Medicare rates
- Social Security Administration — 2026 wage base of $184,500
- IRS — tips and overtime deductions
- North Carolina Department of Revenue — NC-30 Income Tax Withholding Tables and Instructions for Employers (2026) — 4.09% withholding rate; standard deductions; $2,500 per allowance; worked example
- North Carolina Department of Revenue — Tax rate schedules — 4.25% for 2025; 3.99% after 2025
- North Carolina Department of Revenue — Form NC-4
- N.C. Division of Employment Security — Employer tax FAQs — unemployment taxes are not deducted from employees' wages
- N.C. Department of Labor — Minimum wage in North Carolina — $7.25; $2.13 tipped cash wage
- N.C. General Statutes § 95-25.4 — Overtime
- N.C. General Statutes § 95-25.6 — Paydays
- N.C. General Statutes § 95-25.7 — Final pay