What does it cost to runa company in North Carolina.
North Carolina charges a formation fee, an annual minimum franchise tax, and corporate income tax, on top of the payroll and compliance work Teamed already handles for you.
At a glance
The core numbers you need to plan around
North Carolina sets a formation fee of $125 for Articles of Organization, a minimum franchise tax of $200 calculated on a margin basis, and a corporate income tax rate of 2.0%. These are the fixed costs of keeping a legal entity alive in the state, separate from payroll, benefits, and the ongoing administrative work of running one.
- Corporate income tax
- 2.0%
- Minimum franchise tax
- $200
- Franchise tax basis
- margin
- Formation / registration fee
- $125
Formation
Getting the entity on the books
Setting up in North Carolina starts with filing Articles of Organization with the North Carolina Secretary of State, which carries a fee of $125. That fee is a one-time cost of formation, not a recurring charge, but it is the first line item in any budget for standing up your own entity in the state.
Once formed, the entity takes on its own ongoing obligations. These do not disappear because you're small or new to the state, they apply from day one and continue every year the entity exists.
Franchise tax
The annual cost of staying registered
North Carolina charges a franchise tax calculated on a margin basis, with a minimum franchise tax of $200 due each year regardless of how the underlying calculation lands. This is separate from income tax, and it applies simply because the entity is registered in the state, not because of how much the entity earned.
Businesses often underestimate this line because it feels small next to payroll costs, but it's a recurring, non-negotiable filing obligation. Missing it creates compliance problems that compound over time, since the entity stays on the state's books whether or not you're actively using it.
Corporate income tax
What the entity owes on profit
North Carolina's corporate income tax rate is 2.0%. This applies on top of the franchise tax, so an active entity generating taxable income in the state carries both obligations, not one or the other.
Together, the franchise tax minimum and the corporate income tax rate define the floor of what it costs to keep a North Carolina entity compliant each year, before you add accounting, registered agent fees, and the administrative time of managing filings.
Why this matters for hiring
Running costs versus running an EOR
When you hire through Teamed instead of setting up your own North Carolina entity, you sidestep the formation fee, the annual franchise tax, and the corporate income tax exposure entirely, because Teamed's existing entity carries those obligations. That's the practical trade you're making: predictable per-employee cost through Teamed against the fixed and recurring costs of owning the entity yourself.
Neither path is automatically cheaper. It depends on headcount, how long you plan to stay in North Carolina, and how much internal bandwidth you have for entity administration, which is exactly what the crossover calculator is built to help you work through.
Before you commit
Sometimes an employer of record is the better fit
An employer of record is sometimes the better answer, not a fallback, especially for a small or still-changing team, or when you're testing whether North Carolina is even the right market. Talk to a member of the team before assuming you need your own entity, and run the numbers through the crossover calculator if you want a clearer picture of where the balance tips.
Contractors, employer of record and your own entity all run on one platform at Teamed, so moving between them later does not mean changing provider or re-onboarding anybody. Real HR and legal experts handle the work rather than a ticket queue.
Talk to a member of the team and we will tell you plainly which one suits where you are. If you would rather look at the numbers yourself first, the crossover calculator models it on local salaries and employer costs rather than on a headcount rule of thumb.
Who carries it
Your own entity, when it's time. We set it up, migrate you in, and hand it back intact.
Global Entity and Employment Operations, which we call GEMO, is how Teamed forms your company, registers it for tax and payroll, runs it month to month and keeps its filings current, across 100+ countries. You stay the employer. We do the work behind it.
In North Carolina, that means we handle the Articles of Organization filing, the ongoing franchise tax and corporate income tax obligations, and the administrative upkeep, then transfer a clean, fully compliant entity to you when the time is right. You keep the option open without carrying the running costs before you need to.
They set up our EU entity and moved hires across without missing a payroll.
Questions
Common questions about North Carolina running costs
How much does it cost to form an entity in North Carolina?
The North Carolina Secretary of State charges $125 to file Articles of Organization. That's a one-time formation fee, separate from the annual franchise tax and corporate income tax obligations that follow once the entity exists.
What is North Carolina's minimum franchise tax?
North Carolina applies a minimum franchise tax of $200 per year, calculated on a margin basis. This is due annually regardless of profitability, so it's a fixed recurring cost of keeping the entity registered.
Is franchise tax the same as corporate income tax in North Carolina?
No, they're separate obligations. North Carolina's corporate income tax rate is 2.0% on taxable income, while the franchise tax is a margin-based tax with a $200 minimum that applies on top of income tax.
Can Teamed help me avoid these North Carolina running costs?
Hiring through Teamed's employer of record model means Teamed's existing entity handles the North Carolina filings and tax obligations, so you don't carry the formation fee or annual franchise tax yourself. If you later want your own entity, Teamed's GEMO service can set it up and hand it back to you.
Do these costs apply if I only have one employee in North Carolina?
Yes, formation fees and the minimum franchise tax apply to the entity itself, not to headcount. This is exactly why smaller or still-changing teams often start with an employer of record rather than standing up their own entity, worth checking with the crossover calculator.
Where these figures come from
Sources
Figures on this page are drawn from the North Carolina Department of Revenue's corporate income and franchise tax rates and the North Carolina Secretary of State's Articles of Organization form (L-01).
Looking for a job in Entity Running Costs And Filings yourself? Teamed does not hire people directly. Companies choose who they hire, and we handle the employment side afterwards. Here is why we cannot help with your search.