South Carolina Payroll Taxes and Withholding Guide (2026)

What Makes South Carolina Payroll Different

Federal payroll tax is the same in every state. What changes from one state to the next is the second layer: state income tax withholding, employer unemployment taxes, and any employee social-insurance contributions. South Carolina sits at the simpler end of that range. Its income tax is graduated with a low top-tier threshold, but it deducts nothing else from employees: no state disability, no paid family leave, and no employee unemployment.

Many high-tax states layer extra employee deductions on top of income tax. New Jersey takes worker contributions for unemployment, disability, and family leave; California deducts state disability. South Carolina does none of that. An SC pay stub therefore has fewer lines than a New Jersey or California stub: federal taxes and the state income tax, and that is it. The federal baseline behind all of this is explained in the how payroll taxes work guide.

Employee Withholding Overview in South Carolina

A South Carolina employee sees federal taxes and a single graduated state income tax line. There is no local wage tax and no state social-insurance deduction. The deductions fall into two groups: federal taxes and South Carolina income tax.

The federal lines work identically to any other state. For Social Security, the 2026 wage base is $184,500, after which Social Security stops for the year. Medicare has no cap. The only state line is the South Carolina income tax. There is no employee unemployment, disability, or family leave line, because South Carolina does not levy those on workers.

How Is South Carolina Income Tax Withheld?

South Carolina has a graduated income tax withheld by a single subtraction-method schedule that applies to every employee, regardless of filing status. Employers withhold by annualizing wages, subtracting the SC W-4 allowances and the 10% standard deduction, then applying the schedule below to the result. The 2026 figures are shown; the 2025 tiers were $3,560 and $17,830 with a 6.2% top rate.

South Carolina does not use filing status to widen the schedule; the same tiers apply to single and married filers, and only the SC W-4 allowance count changes the result. The federal Form W-4 sets federal withholding, covered in the W-4 withholding explained guide, while the SC W-4 sets the South Carolina allowances. Because withholding is an estimate, the final South Carolina tax is settled on Form SC1040.

The South Carolina Withholding Formula and SC W-4

Form SC W-4 is South Carolina's version of the federal W-4, but it works differently. Instead of picking a rate table, it counts allowances that reduce your wages before the graduated schedule is applied.

The Formula

The SCDOR formula (Form WH-1603F) annualizes your wages, then, if you claim one or more allowances, subtracts two things to get South Carolina taxable income: $5,000 for each allowance (2026; $4,860 for 2025) and a standard deduction equal to 10% of wages, capped at $7,500 (2026; $7,300 for 2025). The graduated schedule is then applied to the result and divided by the number of pay periods.

The Zero-Allowance Cliff

If the SC W-4 claims zero allowances, both deductions are $0 and the full annual wage is taxable. Claiming a single allowance restores both the per-allowance amount and the 10% standard deduction, removing up to about $12,500 of taxable income for a typical earner. Because employees hired after December 31, 2019 are withheld at zero allowances when no SC W-4 is on file, a blank SC W-4 quietly over-withholds. The South Carolina paycheck calculator lets you set allowances directly, including zero, so you can see the effect.

South Carolina Deducts No Employee Disability, Family Leave, or Unemployment

This is where South Carolina is simpler than its high-tax neighbors. Some states deduct social-insurance contributions from employee wages. South Carolina deducts none.

• No state disability insurance: South Carolina has no mandatory short-term disability payroll deduction, unlike California or New Jersey.
• No paid family leave payroll tax: South Carolina has not enacted a state-run paid family and medical leave program funded by employee payroll deductions.
• No employee unemployment tax: Unemployment insurance is funded entirely by employers through the Department of Employment and Workforce. Workers pay nothing toward it, and no unemployment line appears on an employee stub.

The practical result is that the only state deduction a South Carolina employee sees is the income tax. That is why an SC stub is shorter than a New Jersey stub, which carries three separate employee contribution lines on top of the income tax.

Employer Payroll Obligations in South Carolina

South Carolina employers carry the federal employer taxes plus the state unemployment contribution. The federal side, covered in the employer payroll tax obligations guide, includes the matching 6.2% Social Security and 1.45% Medicare plus Federal Unemployment Tax (FUTA). On top of that, South Carolina adds a state unemployment tax paid entirely by the employer.

South Carolina state unemployment tax is assessed only on the first $14,000 of each employee's wages for both 2025 and 2026, and the rate depends on the employer's experience rating (tax class) with the Department of Employment and Workforce. New employers are assigned a rate by DEW until they have enough history for an experience-based class. None of this is deducted from employee pay. The combined cost-to-hire can be modeled with the employer payroll tax calculator.

South Carolina Has No Local Wage Income Tax

South Carolina has no municipal or county wage income tax deducted from employees. A worker in Charleston, Columbia, Greenville, or anywhere else in South Carolina pays the state income tax, but no city or county income tax line.

This is a meaningful difference for cross-border commuters. A worker arriving from a state with local wage taxes, such as Ohio or Maryland, is used to a city or county income tax stacked on top of the state tax; there is no South Carolina equivalent. So a worker moving to South Carolina will not see a local wage line, and its absence is correct, not a payroll error.

South Carolina Has No Reciprocity Agreements

South Carolina does not have income tax reciprocity agreements with any other state. This matters for people who live in one state and work in another across the South Carolina border, for example a North Carolina or Georgia resident who commutes into South Carolina, or a South Carolina resident who commutes out.

Because there is no reciprocity, a nonresident who earns wages in South Carolina generally has South Carolina income tax withheld and files a South Carolina nonresident return, then claims a credit for taxes paid to South Carolina on their home-state return to avoid double taxation. A South Carolina resident working in another state is treated the mirror way: the work state withholds its tax, and South Carolina gives a resident credit for it. There is no exemption form that stops South Carolina withholding for a cross-border commuter the way a reciprocity state's certificate would.

South Carolina Supplemental Wage Withholding

Supplemental wages are payments outside regular salary: bonuses, commissions, overtime, sales awards, and back pay. South Carolina withholds income tax on supplemental wages, generally by adding them to regular wages and applying the same formula, since South Carolina does not publish a separate flat supplemental rate the way the federal system does.

• South Carolina income tax on supplemental wages: withheld under the same annualized formula; there is no separate flat state supplemental percentage.
• There are no South Carolina disability, family leave, or unemployment employee contributions to apply to supplemental pay, because South Carolina does not levy them.
• Federal income tax withholding on supplemental wages is a separate calculation set by the IRS, and Social Security and Medicare still apply under their own rules.

For the federal supplemental math on a bonus, use the Bonus Tax Calculator.

South Carolina Filing and Payment Frequency

South Carolina employers report and remit withheld income tax through the SCDOR online portal, MyDORWAY. Withholding is deposited and reported on a schedule that depends on the amount withheld, with a quarterly withholding return and a fourth-quarter annual reconciliation; employers withholding $15,000 or more, or making 24 or more payments a year, must file and pay electronically. The federal deposit schedule is covered separately in the payroll tax deadlines guide.

State unemployment contributions are reported and paid separately to the Department of Employment and Workforce on its own quarterly schedule through the SUITS portal. New employees must be reported to the South Carolina new hire directory shortly after the hire date.

How Take-Home Pay Works in South Carolina

The calculation sequence runs from gross pay down to net pay. South Carolina income tax starts from taxable wages after the allowances and standard deduction, and there are no state social-insurance lines to add.

1. Start with gross wages for the pay period.
2. Apply federal income tax withholding using the Form W-4 and IRS Publication 15-T.
3. Annualize wages, subtract $5,000 per SC W-4 allowance and the 10% standard deduction (capped at $7,500 for 2026), apply the 0/3/6% subtraction-method schedule, and divide by pay periods for the South Carolina income tax. With zero allowances there are no deductions and the full wage is taxed.
4. Subtract Social Security (6.2%) and Medicare (1.45%) on FICA wages.
5. The remainder is net pay. There are no state disability, family leave, or unemployment deductions to subtract.

To see exact figures for a specific salary, SC W-4 allowance count, and pay frequency, use the South Carolina paycheck calculator or the general take-home pay calculator for a full pre-tax benefits stack.

What South Carolina Employees Should Check on a Pay Stub

• South Carolina income tax line: Confirm SC income tax is withheld. If it looks unusually high, check whether an SC W-4 with your allowances is actually on file, since no SC W-4 means zero allowances.
• No employee contribution lines: There should be no state disability, family leave, or unemployment deduction. If you see one, question it, because South Carolina does not levy those on employees.
• No local tax line: South Carolina has no city or county income tax, so there should be no local wage line.
• FICA: Confirm Social Security at 6.2% (until $184,500 of wages for 2026) and Medicare at 1.45% with no cap.
• Allowance count: If your withholding jumped, confirm your employer is using the allowances from your current SC W-4 rather than defaulting to zero.

What South Carolina Employers Should Verify Before Running Payroll

• State registration: Confirm active accounts for South Carolina income tax withholding with the SCDOR (MyDORWAY) and for unemployment tax with the Department of Employment and Workforce, and check the annual DEW tax-rate notice.
• SC W-4 on file: Collect a current Form SC W-4 from each employee hired after December 31, 2019; without one, withhold at zero allowances.
• Current formula: Confirm the payroll system uses the current year's figures, the 2026 $5,000 allowance, the 10% standard deduction capped at $7,500, and the 0/3/6% schedule (or the 2025 $4,860 / $7,300 / 6.2% figures for 2025 pay).
• Nonresident wages: Because South Carolina has no reciprocity, withhold South Carolina income tax on wages earned in the state by nonresidents unless a specific exception applies.
• New hire reporting: Report each new worker to the South Carolina new hire directory.

South Carolina Payroll Quick Facts (2026)

Frequently Asked Questions