North Carolina Income Tax Rate, Reduction Schedule
2023
4.75%
2024
4.50%
2025
4.25%
current
2026
3.99%
Rate drops to 3.99% in 2026 under HB 259. Further reductions depend on revenue thresholds.
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North Carolina's 4.25% Flat Tax and $10,750 Standard Deduction: Why a $65,000 Charlotte Salary Generates $2,306 in State Tax While the Federal System Only Taxes $50,400 of the Same Income
North Carolina's state standard deduction is $10,750 for single filers, compared to the federal $14,600. That $3,850 gap means NC taxes $3,850 more of your income than the federal government does before applying any rate. On a $65,000 salary, NC's taxable base is $54,250 while the federal taxable base is $50,400. The 4.25% flat rate then applies to the full NC taxable amount, producing $2,306 in state tax, an effective rate of 3.5% on gross pay.
NC Taxable Income = Gross Pay − $10,750 (single) or $21,500 (MFJ)
NC State Tax = NC Taxable Income × 4.25%
Federal Taxable Income = Gross Pay − $14,600 (single) − Pre-tax deductions
Gross Salary
NC Taxable (single)
Federal Taxable
NC State Tax
NC Effective Rate
$30,000
$19,250
$15,400
$819
2.7%
$50,000
$39,250
$35,400
$1,668
3.3%
$65,000
$54,250
$50,400
$2,306
3.5%
$80,000
$69,250
$65,400
$2,943
3.7%
$100,000
$89,250
$85,400
$3,793
3.8%
$150,000
$139,250
$135,400
$5,918
3.9%
HB 259 Rate Reduction Schedule: What North Carolina's Annual Tax Cuts From 4.75% to 3.99% Mean for Take-Home Pay at Different Income Levels
North Carolina has cut its income tax rate every year since 2023 under House Bill 259. The reductions are not automatic, each cut depends on the state General Fund meeting revenue thresholds. So far, every scheduled reduction has taken effect. For a single filer earning $65,000, the cumulative savings from 2023 to 2026 amount to $412 per year. The table below shows what each rate change costs (or saves) at four common income levels.
Year
Rate
NC Tax on $50K
NC Tax on $65K
NC Tax on $100K
vs 2023
2023
4.75%
$1,872
$2,577
$4,231
-
2024
4.50%
$1,771
$2,441
$4,006
−$136
2025
4.25%
$1,668
$2,306
$3,793
−$271
2026
3.99%
$1,565
$2,165
$3,561
−$412
NC tax on $50K: taxable = $39,250 (single). NC tax on $65K: taxable = $54,250. NC tax on $100K: taxable = $89,250. "vs 2023" shows cumulative annual savings from the 4.75% baseline.
Five North Carolina Paycheck Calculation Errors That Produce Wrong Take-Home Estimates
Applying 4.25% to gross income instead of NC taxable income
The 4.25% rate applies after the $10,750 NC standard deduction, not to gross pay. On a $65,000 salary, the NC taxable base is $54,250, not $65,000, a $10,750 difference that saves $457 in state tax.
Using the federal standard deduction for NC state tax
NC's standard deduction is $10,750 single / $21,500 MFJ, not the federal $14,600 / $29,200. Using the federal deduction understates your NC taxable income by $3,850 for single filers, causing your estimated take-home to come out $164 too high.
Entering monthly salary instead of annual gross
The calculator expects full annual gross pay. Entering $5,417 (a monthly salary) instead of $65,000 will produce results that are roughly one-twelfth of actual take-home. Always multiply your monthly salary by 12.
Forgetting 2026 will use the 3.99% rate
NC's rate drops from 4.25% to 3.99% on January 1, 2026. If you are projecting take-home across an annual budget that spans both 2025 and 2026, use 4.25% for paychecks through December 2025 and 3.99% starting January 2026.
Omitting pre-tax deductions from the estimate
Health insurance premiums and 401(k) contributions paid pre-tax reduce federal taxable income but not NC taxable income in all cases. NC follows federal treatment for most retirement accounts, so a 5% 401(k) contribution on $65,000 reduces your NC tax bill by roughly $138 per year.
Frequently Asked Questions
North Carolina has a flat income tax rate of 4.25% for 2025. The state has been systematically reducing its rate under HB 259 (2023 budget): 4.75% in 2023, 4.5% in 2024, 4.25% in 2025, and 3.99% in 2026. The long-term goal is to eventually phase out the income tax entirely if revenue thresholds are met.
Source for the $176,100 Social Security wage base and 6.2% employee FICA rate for 2025.
HR
Hassaan Rasheed
Developer and Researcher, CalculatorFlux
Researches and verifies the formulas, methodology, and source data behind each calculator on CalculatorFlux. All tools are built and checked against the cited references before publication.
Last updated: June 2026
North Carolina Tax Rates 2025
Tax
Rate / Amount
NC State Income Tax
4.25% (flat)
NC Std Ded. (single)
$10,750
NC Std Ded. (married)
$21,500
2026 Rate (scheduled)
3.99%
Social Security
6.20%
Medicare
1.45%
SS Wage Base 2025
$176,100
Federal Std Ded. (single)
$14,600
Pro Tip
North Carolina does not tax Social Security income. The rate drops to 3.99% in 2026, a $65,000 earner saves about $141 per year from that change alone. For anyone planning a multi-year budget, NC's scheduled reductions are among the most predictable of any state.