North Carolina vs South Carolina Taxes: Which State Is Better for Your Income?
When comparing North Carolina and South Carolina for tax purposes, there are significant differences that can impact your paycheck and overall tax burden. Both states have flat income tax rates, but the rates and structures differ, making one state potentially more advantageous depending on your income level and financial situation. Our North Carolina Income Tax Calculator guide can help you understand how North Carolina's tax system works.
This comprehensive comparison covers income taxes, sales taxes, property taxes, and overall tax burden between North Carolina and South Carolina for 2025. Whether you're considering moving between the two states, evaluating job offers, or planning your financial future, understanding these tax differences will help you make informed decisions.
Income Tax Comparison: North Carolina vs South Carolina
The most significant difference between North Carolina and South Carolina is their income tax rates:
North Carolina Income Tax
- Flat rate: 4.25% for 2025
- Tax base: All taxable income
- Standard deduction: $15,000 for single filers, $30,000 for married filing jointly in 2025
- Tax-exempt income: Social Security benefits, up to $4,000 of military retirement pay
South Carolina Income Tax
- Progressive brackets: 0% to 6.4% for 2025
- Tax brackets: 0% on first $3,200, then 3%, 4%, 5%, 6%, and 6.4% on higher income
- Standard deduction: $13,850 for single filers, $27,700 for married filing jointly in 2025
- Tax-exempt income: Social Security benefits, military retirement pay (full exemption)
For most taxpayers, North Carolina's flat 4.25% rate is lower than South Carolina's top rate of 6.4%, but South Carolina's progressive brackets mean lower-income earners may pay less in South Carolina. For detailed information about North Carolina's tax system, see our North Carolina Income Tax Calculator guide.
Which State Has Lower Income Taxes?
The answer depends on your income level:
Low-Income Earners (Under $50,000)
South Carolina typically has lower income taxes for low-income earners because of its progressive brackets. The 0% and 3% brackets mean lower-income earners pay less than North Carolina's flat 4.25% rate.
Middle-Income Earners ($50,000 to $150,000)
For middle-income earners, North Carolina's flat 4.25% rate is typically lower than South Carolina's effective rate, which ranges from 3% to 6.4% depending on income level.
High-Income Earners (Over $150,000)
For high-income earners, North Carolina's flat 4.25% rate is significantly lower than South Carolina's top rate of 6.4%. This makes North Carolina more attractive for high earners.
Sales Tax Comparison: North Carolina vs South Carolina
Sales tax is another important factor when comparing the two states:
North Carolina Sales Tax
- State rate: 4.75%
- Local rate: Up to 2.75% additional
- Maximum combined rate: 7.5%
- Average combined rate: Approximately 6.98%
South Carolina Sales Tax
- State rate: 6%
- Local rate: Up to 3% additional
- Maximum combined rate: 9%
- Average combined rate: Approximately 7.44%
North Carolina generally has lower sales tax rates than South Carolina, though the difference varies by location. Both states have local sales tax rates that can add to the state rate.
Property Tax Comparison: North Carolina vs South Carolina
Property taxes are another important consideration:
North Carolina Property Tax
- Average effective rate: 0.84%
- Median property tax: $1,209 per year
- Assessment: 100% of fair market value
- Homestead exemption: Available for seniors and disabled veterans
South Carolina Property Tax
- Average effective rate: 0.57%
- Median property tax: $1,083 per year
- Assessment: 4% for primary residence, 6% for other property
- Homestead exemption: Available for seniors and disabled veterans
South Carolina generally has lower property tax rates than North Carolina, though the difference varies by county and property type. South Carolina's assessment ratio of 4% for primary residences makes property taxes lower for homeowners.
Overall Tax Burden Comparison
When comparing overall tax burden, you need to consider all taxes:
For Low-Income Earners
South Carolina typically has a lower overall tax burden for low-income earners because of lower income taxes and property taxes. However, sales tax may be slightly higher.
For Middle-Income Earners
For middle-income earners, the tax burden is roughly similar between the two states. North Carolina's lower income tax may offset South Carolina's lower property tax, depending on your income and property value.
For High-Income Earners
North Carolina typically has a lower overall tax burden for high-income earners because of its lower income tax rate. The flat 4.25% rate is significantly lower than South Carolina's top rate of 6.4%.
Paycheck Impact Comparison
How do these tax differences affect your paycheck?
Example 1: $50,000 Annual Salary
For a single filer earning $50,000 per year:
- North Carolina: Approximately $1,488 in state income tax (4.25% of taxable income after standard deduction)
- South Carolina: Approximately $1,200 in state income tax (progressive brackets)
- Difference: South Carolina saves approximately $288 per year
Example 2: $100,000 Annual Salary
For a single filer earning $100,000 per year:
- North Carolina: Approximately $3,613 in state income tax (4.25% of taxable income after standard deduction)
- South Carolina: Approximately $4,200 in state income tax (progressive brackets)
- Difference: North Carolina saves approximately $587 per year
Example 3: $150,000 Annual Salary
For a single filer earning $150,000 per year:
- North Carolina: Approximately $5,738 in state income tax (4.25% of taxable income after standard deduction)
- South Carolina: Approximately $7,200 in state income tax (progressive brackets)
- Difference: North Carolina saves approximately $1,462 per year
Use our NC Paycheck Calculator to see how your paycheck would differ in each state.
Retirement Tax Considerations
For retirees, both states have advantages:
North Carolina Retirement Taxes
- Social Security: Not taxed
- Military retirement: Up to $4,000 exempt
- Other retirement income: Taxed at 4.25%
- Property tax: Homestead exemption available for seniors
South Carolina Retirement Taxes
- Social Security: Not taxed
- Military retirement: Fully exempt
- Other retirement income: Taxed at progressive rates (0% to 6.4%)
- Property tax: Homestead exemption available for seniors
South Carolina is generally more favorable for retirees, especially military retirees, because of the full military retirement exemption and lower property taxes. However, North Carolina's flat 4.25% rate may be lower for retirees with significant retirement income.
Moving Between North Carolina and South Carolina
If you're considering moving between North Carolina and South Carolina, here are important considerations:
Tax Implications of Moving
- Part-year returns: If you move during the year, you'll need to file part-year returns in both states
- Residency rules: Each state has different residency rules that determine when you become a resident
- Tax credits: You may be able to claim credits for taxes paid to the other state
For detailed information about moving to North Carolina, see our Moving to North Carolina: Tax Implications guide.
Which State Is Better for Your Income Level?
Here's a quick guide to which state may be better for your income level:
Low-Income Earners (Under $50,000)
South Carolina is typically better for low-income earners because of lower income taxes and property taxes. The progressive brackets mean you pay less than North Carolina's flat 4.25% rate.
Middle-Income Earners ($50,000 to $150,000)
For middle-income earners, the choice depends on your specific situation. North Carolina's lower income tax may offset South Carolina's lower property tax, depending on your income and property value.
High-Income Earners (Over $150,000)
North Carolina is typically better for high-income earners because of its lower income tax rate. The flat 4.25% rate is significantly lower than South Carolina's top rate of 6.4%.
Retirees
South Carolina is generally better for retirees, especially military retirees, because of the full military retirement exemption and lower property taxes. However, North Carolina may be better for retirees with significant retirement income.
Other Factors to Consider
When comparing North Carolina and South Carolina, don't just consider taxes:
Cost of Living
Both states have relatively low costs of living compared to many other states. However, costs vary by city and region. For detailed cost of living information, see our North Carolina Cost of Living Guide.
Job Market
Both states have strong job markets, but opportunities vary by industry and location. Research job opportunities in your field before making a decision.
Quality of Life
Both states offer excellent quality of life with beautiful scenery, mild climates, and strong communities. Consider factors like schools, healthcare, and recreational opportunities.
Resources for Tax Comparison
If you need help comparing taxes between North Carolina and South Carolina, here are some helpful resources:
- North Carolina Department of Revenue: https://www.ncdor.gov
- South Carolina Department of Revenue: https://dor.sc.gov
- IRS Tax Information: https://www.irs.gov
- Tax Foundation: https://taxfoundation.org
Conclusion
When comparing North Carolina and South Carolina for tax purposes, the best choice depends on your income level, property value, and financial situation. North Carolina's flat 4.25% income tax rate is lower than South Carolina's top rate of 6.4%, making it better for middle and high-income earners. However, South Carolina's progressive brackets and lower property taxes make it better for low-income earners and retirees.
Consider all factors—income tax, sales tax, property tax, and overall tax burden—when making your decision. Use our NC Paycheck Calculator to see how your paycheck would differ in each state, and explore our North Carolina Income Tax Calculator guide for detailed information about North Carolina's tax system.