Easily manage employment in South Carolina

Payroll management in South Carolina

South Carolina has a growing economy supported by industries such as manufacturing, tourism, healthcare, and agriculture. With state-specific payroll regulations, including no state minimum wage, a flat state income tax, and right-to-work laws, employers in South Carolina must ensure compliance with both state and federal payroll laws. Understanding these regulations is crucial for smooth payroll operations and compliance.

Payroll breakdown in South Carolina

Employers in South Carolina must adhere to both federal and state payroll regulations regarding wages, taxes, and benefits. Below is an overview of key payroll components:

Minimum wage and overtime

• Minimum wage: South Carolina does not have a state minimum wage, so employers must comply with the federal minimum wage of $7.25 per hour.
• Overtime rules:
• South Carolina follows federal overtime laws, requiring employers to pay 1.5 times an employee’s regular rate for hours worked beyond 40 hours in a workweek.
• Some exemptions apply based on job classification and industry.

State income tax

• South Carolina has a progressive state income tax system, with rates ranging from 0% to 6.5%, depending on income levels.
• Employers must withhold state income tax and remit it to the South Carolina Department of Revenue (SCDOR).

Unemployment insurance (UI) tax

• Employers must contribute to South Carolina’s Unemployment Insurance (UI) program, managed by the South Carolina Department of Employment and Workforce (SCDEW).
• The UI wage base in South Carolina is $14,000.
• UI tax rates vary based on an employer’s experience rating and range from 0.06% to 5.4%.
• New employers typically pay a 0.49% UI tax rate.

Workers’ compensation

• South Carolina law requires all employers with four or more employees to carry workers’ compensation insurance to cover medical expenses and lost wages for employees injured on the job.
• Some exemptions apply, including agricultural workers and independent contractors.

Payroll tax filing and payment deadlines

• Employers must register for a South Carolina Withholding Tax Account with the South Carolina Department of Revenue.
• State withholding tax returns must be filed monthly, quarterly, or annually, depending on employer classification.
• UI tax reports must be submitted quarterly to the South Carolina Department of Employment and Workforce (SCDEW).
• Payroll tax payments can be made electronically through the South Carolina MyDORWAY online tax portal.

Quick facts: Important considerations for employers

• State minimum wage compliance: South Carolina follows the federal minimum wage of $7.25 per hour, as there is no state-specific requirement.
• Final paycheck rules:
• If an employee is terminated, employers must provide the final paycheck within 48 hours or by the next scheduled payday (whichever comes later).
• If an employee resigns, the final paycheck must be provided by the next scheduled payday.
• New hire reporting: Employers must report new hires to the South Carolina New Hire Reporting Directory within 20 days.
• Paid sick leave: South Carolina does not require employers to provide paid sick leave, but employers may choose to offer it as a benefit.
• Payroll recordkeeping: Employers must maintain payroll records for at least three years to comply with state and federal laws.
• Right-to-work state: South Carolina is a right-to-work state, meaning employees cannot be required to join a union as a condition of employment.

Run payroll in South Carolina with Remote

Managing payroll in South Carolina requires careful attention to state-specific regulations, including minimum wage compliance, UI tax requirements, and workers’ compensation laws. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be, book a demo with Remote today.