How to Calculate the Tax Deduction Out of My Monthly Pay Check in North Carolina

by Grace Ferguson; Updated September 26, 2017
Your net pay is your pay after deductions occur.

As an employee who works in North Carolina, you are entitled to a pay stub or an itemized wage statement. Though your pay stub shows taxes withheld for the pay period, it does not show how your employer arrived at its calculations. Your employer is required to withhold North Carolina income tax, federal income tax, Medicare tax and Social Security tax from your paycheck. Since you are paid monthly, your tax withholding is based on your gross pay for the month. The deduction calculation depends on the type of tax.

Step 1

Calculate state income tax withholding. Check your Employee’s Withholding Allowance Certificate (NC-4 form) for your filing status and total number of allowances. View line 2 to see if you requested additional tax to be withheld from each of your paychecks. Use the North Carolina withholding tax tables to figure the withholding amount. Ask your employer for a copy or access it from the North Carolina Department of Revenue website.

The withholding tax table gives you the precise amount of withholding tax based on your monthly pay period, filing status, wages and number of allowances. If applicable, include additional tax to be withheld in the withholding amount.

Step 2

Figure federal income tax withholding. This process is similar to your state income tax withholding, except that you consult your W-4 form for your filing status and allowances, and the IRS Circular E for the federal withholding tax tables. Use the tax table that corresponds with your monthly pay period.

Step 3

Calculate Medicare tax at 1.45 percent of your gross pay and Social Security tax at 6.2 percent.

Step 4

Determine monthly take-home pay. Subtract state income tax, federal income tax, Social Security tax and Medicare tax (as shown in Steps 1, 2 and 3) from gross wages, except if you have a pretax voluntary deduction, such as a Section 125 health plan. If a pretax deduction applies, deduct the monthly benefit amount from your gross wages before deducting taxes. Subtract post-tax voluntary deductions, such as union dues and life insurance, after deducting pretax deductions and payroll taxes. The remainder is your net/take-home pay.

Tips

  • Your gross pay is your earnings before any deductions occur.

About the Author

Grace Ferguson has been writing professionally since 2009. With 10 years of experience in employee benefits and payroll administration, Ferguson has written extensively on topics relating to employment and finance. A research writer as well, she has been published in The Sage Encyclopedia and Mission Bell Media.

Photo Credits

  • Comstock/Comstock/Getty Images