2026‑27 State Budget: Employee Compensation FAQs

July 13, 2026
Categories: General News

Last week, Gov. Josh Stein signed North Carolina’s 2026-27 state budget into law, making significant investments in the UNC System and in UNC Charlotte. The approved budget includes a 3% salary increase for most UNC System employees, a 13% salary increase for sworn law enforcement officers and bonuses for state employees, including University employees.

Employee compensation FAQs

How does the budget bill passed by the North Carolina General Assembly (NCGA) affect UNC Charlotte employees?The budget passed by the North Carolina General Assembly and signed by Gov. Josh Stein makes significant investments in the UNC System and in UNC Charlotte. Importantly, for our dedicated employees, the budget included a 3% salary increase for most UNC System employees and a 13% salary increase for sworn law enforcement officers. The salary increases for this fiscal year are retroactive to July 1, 2026. Also included were bonuses for all state employees: a one-time bonus of $1,750 for employees earning $65,000 or less as of June 30, 2026, and a one-time bonus of $1,000 for employees earning more than $65,000 as of June 30, 2026 The bonuses are to be paid on Oct. 15, 2026, to eligible employees.

Salary increase FAQs

What salary increases were authorized for UNC System employees?The 2026-27 budget includes a 3% salary increase for most UNC System employees and a 13% salary increase for sworn law enforcement officers.

Who is eligible for the mandatory 3% salary increase?The following employee groups are generally eligible for the mandatory 3% recurring salary increase and the one-time legislative bonus:

  • Employees subject to the State Human Resources Act (SHRA)
  • Exempt Professional Staff (EPS, formally known as EHRA)
  • Chancellors and Senior Academic and Administrative Officers (SAOO)
  • Faculty

To be eligible for the pay increase, employees must have been employed by the University on or before June 30, 2026. Employees whose last workday was prior to June 30, 2026, due to resignation, retirement, dismissal, reduction in force or death are not eligible for the salary increase.

Are employees whose last workday was on or prior to June 30, 2026, eligible for the salary increase or the one-time bonus?
Employees whose last workday was on or prior to June 30, 2026, are not eligible for the salary increase. However, individuals whose last workday was JUne 30, 2026, and were in an active pay status on June 30, 2026, are eligible to receive the one-time bonus.

Are employees entering faculty phased retirement, on or after July 1, 2026, eligible for the salary increase?
Faculty members that entered phased retirement on July 1, 2026, are not eligible for the salary increase. Faculty members that entered the phased retirement program prior to July 1, 2025, or prior years, are eligible for the salary increase.

Are the increases based on performance ratings?
The salary increases are not based on performance ratings and does include all active employees, including those facing disciplinary action.

Are the increases based on an employee’s current salary?
The mandatory salary increase is based on eligible employees’ June 30, 2026 salary.

If my salary changed on or after July 1, 2026, does that affect my salary increase?
If your salary has changed as of July 1, 2026, or later, the 3% legislative increase dollar amount will be calculated based on your June 30, 2026, salary.

Will the salary increase be retroactive?
Yes. The mandatory salary increase will be retroactive to July 1, 2026.

When can I expect to see the salary increase reflected in my pay?
The mandatory salary increase for semi-monthly employees will be reflected in eligible employees’ Friday, July 31, 2026, payroll. The retroactive pay to July 1, 2026, will also be reflected in the July 31, 2026, payroll.

Are part-time employees eligible for the salary increase?
Yes, permanent part-time employees are eligible for the mandatory salary increase.

Are temporary employees eligible for the salary increase?
Yes, temporary hourly employees are eligible for the mandatory salary increase. The Office of State Human Resources and the Office of State Budget and Management are working with the General Assembly to determine whether stipend-based or flat-rate temporary employees are eligible for the salary increase.

I am a temporary hourly employee, when can I expect to see the salary increase reflected in my pay?
The mandatory salary increase for temporary employees will be reflected in eligible employee’s Friday, August 7, 2026, payroll. The retroactive pay to July 1, 2026 will also be reflected in the August 7, 2026, payroll.

Are employees who are out on leave eligible for the salary increase?
The University will review all employees on approved leave on an individual basis. Employees on paid leave should generally receive the legislative salary increase effective July 1, 2026. Employees currently on disability or who are on a leave of absence (paid or unpaid) are eligible for the mandatory salary increase upon their return. Institutions are not required to process payments for employees on leave without pay until the employee returns, and those payments are to be made on a current basis, not retroactive

How are pro‑rated salary increases handled for employees who separate from North Carolina state employment before the 3% mandatory raise is implemented?
Eligible employees who fully separate from the State of North Carolina – meaning employees who did not transfer to another campus or state agency – after June 30, 2026, but prior to the payroll implementation of the mandatory 3% salary increase are due a pro-rated salary increase payment, retroactive to July 1, 2026, payable by the active employer between June 30, 2026, and the separation date.

Are student employees eligible for the salary increase?
No, student employees are not subject to the mandatory salary increase or bonus.

One-time legislative bonus FAQs

What bonuses are being offered to state employees?
Also included in the budget were a one-time bonus of $1,750 for employees earning $65,000 or less as of June 30, 2026, and a one-time bonus of $1,000 for employees earning more than $65,000 as of June 30, 2026.

Who is eligible to receive the one-time legislative bonus?
To be eligible for the legislative one-time bonus, employees must:

  • Be a permanent full- or part-time employee as of June 30, 2026
  • Be employed at the time of implementation

Are part-time employees eligible to receive the one-time legislative bonus?
Yes, permanent part-time employees will receive a prorated bonus based on their FTE (e.g., a permanent employee paid $60,000 and employed at 0.5 FTE would be eligible for a bonus of $875).

How does the legislation authorizing the bonus affect employees’ pay, salary, taxes and retirement benefits?

  • According to the legislation, the bonus:
    • Is not considered compensation for the purposes of any State retirement system (inclusive of TSERS or ORP)
    • Does not become part of the employee’s annual base salary
    • Must be paid separately from the recurring salary increase
    • Is subject to proper federal and State payroll tax withholding
    • Is nonrecurring
    • Is not included in retirement compensation calculations

Are temporary employees eligible to receive the one-time legislative bonus?
No, temporary employees are not eligible to receive the one-time legislative bonus.

How are one‑time legislative bonuses handled for employees who separate from North Carolina state employment before the bonus is paid out?
Bonus-eligible employees who separate from the State of North Carolina – meaning employees who did not transfer to another campus or state agency – after June 30, 2026, but prior to the payout of the legislative one-time bonus are due to receive the appropriate bonus amount, based on their salary as of June 30, 2026.

When will eligible employees see the bonus reflected in their paychecks?
Eligible employees will receive their bonuses in their Thursday, Oct. 15, payroll.