Who Funds Unemployment Insurance in North Carolina?

North Carolina's Unemployment Insurance (UI) program is financed entirely by employers—employees do not contribute.

Employer Contributions

• State UI Tax – Paid on first $29,600 of each employee's wages (2024 wage base).
• Rate range: 0.06% – 5.76% (new employers start at 1.0% or industry average).
• Experience rating: Employers with more layoffs/claims pay higher rates.

Federal Tax (FUTA)

• 6.0% on first $7,000/wage.
• Credit up to 5.4% for timely state payments → effective 0.6%.

Trust Fund

Contributions go to the NC Unemployment Insurance Trust Fund, which pays benefits. If fund balance falls below thresholds, surtaxes trigger.

Bottom line: Workers pay $0; employers bear full cost via state & federal payroll taxes.