1107 - Policy on Required Payroll Taxes

Introduction

Purpose

The University provides this Policy to apprise its employees of taxes required to be withheld from their payroll.

Scope

All University of North Carolina at Chapel Hill employees receiving compensation through Payroll Services.

Policy

Policy Statement

Payroll Services will process payroll tax deductions imposed by federal, state and local laws for all employees of the university. Employees who are subject to FICA taxes (Social Security, Medicare, and Additional Medicare taxes) will be taxed at the applicable rate defined for the respective tax year. All other federal, state, and local taxes will be withheld at the applicable rates or as defined by withholding tables or regulations of the respective taxing authority.

Mandatory Payroll Tax Forms

The following tax forms must be submitted via SelfService in ConnectCarolina:

• Federal Tax Form W-4
• North Carolina Tax Form NC-4

In absence of SelfService submissions of tax forms, the default Federal and North Carolina tax set up for the employee will be the maximum withholding rate (Single with zero allowances).

For more information, please see Finance Procedure 1107.1 - Procedure for Completing Federal and State Withholding Tax Forms.

Exceptions

The following exceptions apply to submitting tax forms W-4 and NC-4 in Self-Service.

• Employees who work outside of North Carolina can complete the Federal W-4 in Self-Service, however they do not need to complete the NC-4 in Self-Service.  The respective state tax form (for the state where the employee is located when performing services for UNC) will need to be submitted via email to MultistateTax@unc.edu.  For more information, please see Finance Procedure 1107.2 - Procedure for Payroll Reporting of Employees Who Work Outside of North Carolina.
• Employees who are in Nonresident Alien tax status will not be able to submit tax forms W-4 and NC-4 in Self-Service and will receive an error message stating such when in the Self-Service tax forms.  Any tax forms needed from these individuals will be requested by the NRA Payroll Tax Accountant.
• Employees who are claiming exemption from NC state withholdings must submit paper tax form NC-4EZ to Payroll Services.

Related Requirements

University Policies, Standards, and Procedures

• Finance Procedure 1107.1 - Procedure for Completing Federal and State Withholding Tax Forms
• Finance Procedure 1107.2 - Procedure for Payroll Reporting of Employees Who Work Outside of North Carolina
• Finance Form 1107.2.1f - Notice of Employee Working Outside of North Carolina Form

Contacts

History

Revised:

• June 6, 2023-added language for exceptions.
• October 8, 2018 - Updated policy to reflect Required Payroll Taxes as opposed to Required Salary and Benefit Deductions.
• October 13, 2017 - updated main Payroll phone number.
• September 3, 2009
• May 29, 2007