US State Tax Summeries-2

Your Ultimate Guide to US Payroll in South Carolina

Managing payroll in South Carolina? Read our state-by-state guide to US payroll taxes to learn what you must withhold and deduct from employee wages.

Jemima Owen-Jones
Written by Jemima Owen-Jones
July 31, 2023

Key takeaways

  1. In the state of South Carolina, employers must pay unemployment insurance.
  2. Employers must deduct and withhold personal income tax from the employee’s wages.
  3. South Carolina employers do not need worker’s compensation coverage until they have four or more employees in South Carolina.

Employers must navigate various regulations and requirements to ensure proper payroll withholding in each US state. This guide introduces what employers must pay and withhold from payroll in South Carolina, including unemployment insurance, personal income tax, and workers’ compensation. 

Paying unemployment insurance 

On top of withholding federal taxes such as Medicare and Social Security taxes, you are also responsible for withholding and paying certain South Carolina state taxes from your employee’s payroll. These taxes together are referred to as employer payroll taxes or payroll withholding. One of the taxes you will need to pay is unemployment insurance (UI). 

Unemployment insurance is a national program administered by the US Department of Labor. The program provides temporary payments to people who are unemployed through no fault of their own. Employers can manage their South Carolina unemployment insurance through the online portal.

For more information on paying your unemployment insurance, refer to the South Carolina Department of Employment and Workforce.

Withholding personal income tax from your South Carolina employee

Employers are also responsible for withholding certain South Carolina state taxes from their employee’s payroll. Personal income tax, also known as individual income tax or state income tax, is a tax on the income of South Carolina residents. Employers must deduct the tax from the employee’s wages and withhold it. 

After you withhold the tax from your employee, you are responsible for paying the amount you withheld to the state. You can file and pay the withholding amount online.

For more information on paying the withholding amount, refer to the South Carolina Department of Revenue.


Paying South Carolina workers’ compensation 

In addition to paying South Carolina payroll taxes, employers also need to pay for workers’ compensation. Unlike most other states, you will not need to purchase workers’ compensation coverage until you have four or more employees in South Carolina. 

Workers’ compensation is a type of insurance that covers wages and medical benefits for employees who are injured while performing their job. The state of South Carolina provides information online to help you find a qualified commercial carrier. Employers should verify that their workers’ compensation insurance complies with the state’s regulations for workers’ compensation.

Simplify US payroll tax compliance with Deel

While this guide provides essential information on South Carolina payroll taxes, payroll compliance and state requirements extend beyond what is covered above. To streamline the process and ensure full compliance, companies can turn to Deel. 

Deel offers a comprehensive solution for managing US and international payroll, including payments, taxes, worker classification, and more. Speak with an expert today to see how you can streamline your US payroll processes and ensure compliance with state regulations.

Disclaimer: This article is provided for general informational purposes and should not be treated as legal or tax advice. Consult a professional before proceeding.

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