South Carolina Payroll: Employer Tax Guide

If another founder asked me where South Carolina payroll gets hard, I would point to the hiring paperwork, not the tax math. This guide covers what the state requires of employers, what changed in its income tax, and how 10 payroll providers price the work.

South Carolina rewrote its income tax with House Bill 4216, signed partway through the 2026 tax year, and that is the smaller of the two things an employer here needs to understand. The larger one is that South Carolina front-loads its compliance burden into hiring.

Every private employer, with no headcount threshold at all, must verify each new employee through E-Verify within three business days. Any business that has had five or more employees in the past year also owes each new hire a written notice of hours, wages, payment timing, and deductions at the point of hire.

When anyone leaves, for any reason, final wages are due within 48 hours or the next regular payday. Little of that runs through a payroll platform. The tax side, by contrast, is simple: two rates, no local income tax anywhere, no disability program, no paid leave contribution, and unemployment insurance that fell to its lowest level in over a decade.

What South Carolina requires from employers

South Carolina's list of employer obligations is short on the tax side and unusually demanding on the hiring side, which is the opposite of how most state payroll guides are organized. The table shows each obligation, what it requires, and where it lives.

Read the middle three rows together: E-Verify, the written wage notice, and new hire reporting. All of them attach to the act of hiring rather than to running payroll, all run on deadlines tied to the hire date rather than to pay periods, and only the new hire report is something most payroll platforms file on your behalf.

Withholding returns and the deposit schedule

If you are a resident withholding agent, your state deposits follow your federal deposit schedule, so a business already depositing federal taxes monthly remits the state portion monthly too. Nonresident withholding agents remit on a dollar threshold instead, and every account files a quarterly return regardless of how often it pays.

Filing through MyDORWAY, the online portal for returns and payments, becomes mandatory once you withhold $15,000 or more in a quarter or make 24 or more payments in a year, according to the South Carolina Department of Revenue. That deposit and filing cycle, alongside the quarterly unemployment wage report, is the work a self-service payroll plan leaves with you.

Unemployment insurance

Unemployment insurance is the other state-level payroll tax, and employers fund all of it.

The Department of Employment and Workforce reported the unemployment trust fund fully solvent at $1.8 billion and cut rates for tax classes 2 through 19 by an average of 34.7 percent, the largest percentage reduction since 2011. Rates have decreased or held flat for twelve consecutive years.

According to the department's 2026 rate table, every class includes the 0.06 percent Departmental Administrative Contingency Assessment. That is why the floor sits at 0.06 percent rather than zero, and why a new employer pays 1.06 percent in all rather than the 1.0 percent base rate.

The income tax was rewritten mid-year

Governor McMaster signed House Bill 4216 on March 30, 2026, and it applies retroactively to tax year 2026, as the Department of Revenue's summary sets out. Besides the new rates, it replaces the federal standard and itemized deductions with a state-specific South Carolina Income Adjusted Deduction, the SCIAD in the table below.

The $966 figure is a computation adjustment rather than a credit. It exists because the first $30,000 is taxed at 1.99 percent, so filers above the threshold do not pay 5.21 percent on their entire income, only on the portion above it. The subtraction lets a single formula apply both rates.

From tax year 2027, the top rate falls whenever the Board of Economic Advisors projects individual income tax revenue to grow at least 5 percent, with the forecast in effect on February 15 deciding each cut. Once the top rate reaches 1.99 percent, the two brackets merge, and the single rate keeps falling the same way until it reaches zero.

Each cut is sized to reduce revenue by $200 million or a quarter of the recurring income tax surplus, whichever is greater. When the projected increase falls short of $200 million, the cut is limited to that increase. Both rules are set out in the Department of Revenue's Information Letter #26-20 of August 31, 2026.

There is no local income tax anywhere in South Carolina, so once state withholding is set there is no municipal or county layer to resolve.

E-Verify, the wage notice, and new hire reporting

Three obligations attach to hiring in South Carolina, with three different deadlines, and together they are what actually distinguishes payroll compliance here. The table also shows the two federal steps that run alongside them.

E-Verify with no headcount threshold

Section 41-8-20 requires every private employer in South Carolina to register with and participate in E-Verify, verifying the work authorization of every new employee within three business days of employing them. There is no minimum size, so a business with a single employee is covered exactly as a business with five hundred is.

The enforcement mechanism is unusual. All private employers hold an imputed South Carolina employment license under Section 41-8-20, meaning the law treats them as licensed to employ people in the state without any application, and a private employer that does not comply violates that license. The Department of Labor, Licensing and Regulation investigates complaints and conducts random audits.

E-Verify is separate from the federal I-9 process, not a substitute for it, and both must be completed. Section 41-8-20 also requires a submission even when the employee is terminated in under three business days.

The written wage notice

Section 41-10-30 requires written notice to each employee at the time of hiring covering the normal hours and wages agreed, the time and place of payment, and the deductions that will be made, including insurance program payments. An employer may satisfy this by posting the terms conspicuously at or near the workplace instead of giving individual notices.

The wage notice duty does not reach every employer. Under Section 41-10-20, it excludes employers of domestic labor in private homes and employers that had fewer than five employees at all times during the preceding twelve months. In plain terms, a business that had five or more employees at any point in the past twelve months is covered.

Two details matter in practice. The first is timing: changes to those terms require written notice at least seven calendar days before taking effect, except for wage increases, which are exempt.

The second is the deduction disclosure, which has teeth: an employer may not withhold or divert any portion of wages unless state or federal law requires or permits it, or unless it gave the written notification of amount and terms that Section 41-10-30 requires.

The same section requires covered employers to keep records of names, addresses, wages paid, and deductions for three years, and to give every employee an itemized statement of gross pay and deductions for each pay period.

New hire reporting

Section 43-5-598 requires reporting a new hire to the state directory of new hires within twenty calendar days. Employers reporting electronically may instead file twice monthly, with submissions between twelve and sixteen days apart. Penalties run to $25 for second and subsequent offenses and $500 per offense where the failure results from a conspiracy between employer and employee.

Final pay in 48 hours

Section 41-10-50 states that when an employer separates an employee from the payroll for any reason, all wages due must be paid within forty-eight hours of the separation or by the next regular payday, which may not exceed thirty days.

The treble damages provision is what changes the risk calculation. South Carolina has a light regulatory touch in most respects: no state minimum wage above the federal floor, no mandated pay frequency, and no paid leave programs. But an employee paid late on separation can recover three times the unpaid amount plus costs, with a three-year statute of limitations.

Paid time off deserves separate attention. Accrued leave is not automatically payable, but where a written policy or contract promises payout, that accrual becomes wages under Section 41-10-10 and falls inside the same 48-hour deadline. A policy written loosely can convert a discretionary benefit into a hard obligation with treble damages attached.

Wage floor and workers compensation

South Carolina has no state minimum wage, so the federal $7.25 applies, and Section 6-1-130 bars cities and counties from setting a higher rate.

Workers compensation is required at four or more employees unless total payroll for the previous calendar year was below $3,000; both tests come from Section 42-1-360.

10 payroll providers for South Carolina employers compared

Every provider below files South Carolina state withholding and unemployment insurance. With no local tax layer and a simple withholding calculation, the differences that matter come down to two questions. Does the platform have an onboarding workflow that can carry the three-day E-Verify deadline and the written wage notice? And will it apply revised withholding tables once the Department of Revenue issues them?

OnPay

OnPay sells one base plan at $49 per month plus $6 per employee, with no tier to climb; HR tools and time tracking are paid add-ons. Tax filing covers all 50 states with no multi-state surcharge, and year-end W-2 and 1099 filing sits in the base price.

OnPay also maintains a South Carolina payroll tax and registration guide, a reasonable proxy for whether a vendor keeps its state tables current. That matters while revised withholding tables for the March 2026 law are still pending.

Gusto

Gusto is a common first payroll purchase for US small businesses, and its onboarding is built into the same account. That matters more than usual in South Carolina, which front-loads compliance into hiring. Simple runs $49 per month plus $6 per employee, after the base price rose from $40 during 2025.

The constraint is the single-state limit on Simple. One hire in North Carolina or Georgia moves you to Plus at $80 plus $12 per employee.

Gusto can also submit E-Verify cases from inside its platform for employers already enrolled in the federal system, at $5 a submission on top of its $20 Remote I-9 add-on (both are included on Premium). Enrolling in E-Verify, which South Carolina requires of every private employer, still sits with you, even when the cases run through payroll.

Patriot Software

At published rates, Patriot costs the least on this list at 10, 25, and 50 employees. Full Service is $37 per month plus $5 per employee and includes federal, state, and local tax filing, though new hire reports stay with you.

Patriot's Basic plan is $17 per month plus $4 per employee if you file taxes yourself, which in South Carolina means handling the quarterly UCE-101 and the withholding returns by hand.

Square Payroll

At $35 per month plus $6 per person, Square has one of the lowest base fees here, after SurePayroll, and its full-service plan covers tax filings, new hire reports, and multi-state payroll. For a Charleston or Greenville restaurant already running Square point of sale, timecard data flows straight into payroll with no integration work.

SurePayroll

SurePayroll is owned by Paychex and built for very small employers and household employers. The Small Business plan is $29 per month plus $7 per employee, with a flat $9.99 monthly multi-state fee rather than a per-state charge, which suits an employer with staff over the North Carolina or Georgia line.

QuickBooks Workforce Payroll

Workforce Payroll, formerly Payroll Core, earns its place if your books live in QuickBooks Online: payroll reaches the general ledger without an export. That case holds even after a per-employee fee increase on July 1, 2026, which brought the price to $50 per month plus $7 per employee.

ADP RUN

Every ADP RUN package calculates, files, deposits, and reconciles payroll taxes, and ADP says it pays the resulting fines if it makes a filing error. The Enhanced package and above add an electronic Form I-9 during new-hire onboarding. RUN's package page lists no E-Verify integration, though, so the state's three-day check still happens outside it.

The cost is opacity. ADP does not publish RUN pricing, and every package (Essential, Enhanced, Complete, and HR Pro) is quoted individually. ADP says RUN needs no signed contract and the service can be ended at any time.

Paychex Flex

Paychex competes on service rather than software: the Complete package includes a payroll specialist, and the other packages offer one as an add-on. Pricing is quote-only, with no rates published for any of its four payroll packages (Basic, Foundations, Advanced, and Complete).

Paychex's onboarding workflow offers remote Form I-9 and E-Verify completion, either for a per-transaction fee or bundled into Paychex Flex Onboarding. That keeps the E-Verify check South Carolina requires inside the onboarding workflow itself.

Paylocity

Paylocity sits between small-business payroll and full human capital management (HCM) software, aimed at companies that have outgrown basic payroll. It publishes detailed per-state tax facts, South Carolina included. Its onboarding tools cover handbook acknowledgments, tax withholding forms, I-9 document verification, and E-Verify, the check South Carolina requires of every private employer.

Paylocity pricing is quote-based, and implementation is a project rather than a signup. According to Paylocity's fiscal 2026 annual report, its consultants guide each client through implementation, and its clients average more than 150 employees.

Rippling

Rippling unifies payroll, HR, and IT provisioning on one employee record, and its onboarding automation runs from offer letters to equipment ordering and app access.

Rippling's pricing page is a quote form, but its small-business page starts payroll at $8 per user per month plus a $40 monthly base fee. Its blog prices the core platform and the payroll module at $8 per employee each, billed annually, so configured quotes run higher.

What each provider actually costs a South Carolina employer

The table below models published rates at three headcounts. South Carolina is one of the states where these figures approximate the whole software cost, since there is no disability carrier, no paid leave remittance, and no local filings.

Patriot is the cheapest published option at all three headcounts, with Square second each time. The comparison that matters here is not purely price, though: neither of the two cheapest platforms lists an E-Verify integration, and South Carolina puts its hardest deadlines in onboarding rather than in payroll processing.

Choosing a payroll provider for South Carolina

Choose on these five questions rather than on price alone. Each one ties back to a South Carolina deadline or rule covered above, so put all five to every provider on your shortlist.

Before you choose

FirstHR is an onboarding and HR platform, not a payroll provider. Payroll runs, payroll tax filing, and benefits administration come from the providers above, and if running payroll is the problem in front of you, one of them is the answer.

What we handle is the layer where South Carolina actually puts its deadlines. Onboarding workflows put the I-9, the SC W-4, and the E-Verify check on each new hire's first-day task list with an owner and a due date, and the completed forms are kept in the employee file; the forms themselves are completed outside our platform.

E-signatures cover offer letters and acknowledgments of the Section 41-10-30 wage notice, document management holds the signed copies, and employee records cover the three-year retention requirement, at a flat $98 a month for up to 10 people or $198 for 11 to 50.

Completing E-Verify inside three business days and issuing the wage notice at hire are workflow problems rather than payroll problems, and so is the twenty-day new hire report wherever your payroll plan leaves it with you.

Frequently Asked Questions

What are the South Carolina payroll taxes an employer has to handle?

Two at the state level, plus federal. Income tax runs at 1.99 percent below $30,000 and 5.21 percent above, minus a $966 adjustment, though employers still withhold it on the old-bracket tables. Unemployment insurance applies to the first $14,000 of wages, at 1.06 percent for new employers. There is no local income tax, no state disability program, and no paid family leave contribution.

What is the South Carolina income tax rate?

Two rates under House Bill 4216, signed March 30, 2026 and effective for tax year 2026: 1.99 percent on taxable income below $30,000 and 5.21 percent above, less $966. The top rate came down from 6.0 percent.

The law also replaces federal standard and itemized deductions with a state-specific deduction and sets an automatic trigger, from tax year 2027, for further cuts when revenue is projected to grow 5 percent or more.

Do the current withholding tables reflect the new rates?

No. The 2026 tables and SC W-4, published November 6, 2025 and effective January 1, predate the March 30 law, and as of October 2026 they remain the current tables.

The new law (Act 110) directs the Department of Revenue to adjust them, with no date set, so 2026 withholding will not match final liability. Watch dor.sc.gov for revised tables rather than assuming your platform applied the change.

Does South Carolina require E-Verify?

Yes, for every private employer with no headcount threshold, within three business days of employing a new person, under Section 41-8-20. Submission is required even if the employee is terminated inside that window. Enforcement runs through the imputed South Carolina employment license, with the Department of Labor, Licensing and Regulation conducting random audits. E-Verify is separate from the federal I-9 and both are required.

When must a final paycheck be paid in South Carolina?

Within 48 hours of separation or by the next regular payday, not exceeding thirty days, under Section 41-10-50, with no distinction between discharge and resignation. Wages include vacation, holiday, and sick pay due under any policy or contract. An employee paid late can recover treble the unpaid amount plus costs and attorney fees, suing within three years.

What written notice does South Carolina require at hire?

Under Section 41-10-30, a covered employer gives each new hire written notice of normal hours, agreed wages, the time and place of payment, and the deductions to be made. Every employer is covered except households employing domestic labor and businesses that stayed under five employees throughout the preceding twelve months.

Instead of individual notices, employers may post the terms conspicuously. Changes need seven calendar days written notice except for wage increases, records must be kept three years, and every pay period requires an itemized statement of gross pay and deductions.

What is the South Carolina unemployment insurance wage base and rate?

$14,000 per employee, with 2026 rates from 0.06 to 5.46 percent and no solvency surcharge. New businesses with under twelve months of liability pay 1.06 percent with the administrative assessment; employers with no benefit charges from July 2022 through June 2025 sit in tax class 1 at 0.06 percent. Rates for classes 2 through 19 fell an average of 34.7 percent.

How often must South Carolina employers pay employees?

The state does not mandate a pay frequency for private employers, so weekly, biweekly, semimonthly, and monthly are all permitted. What Section 41-10-30 requires of covered employers is consistency and disclosure: the time and place of payment must appear in the written notice at hire, changes need seven days notice, and each pay period requires an itemized statement.

How long do South Carolina employers have to report a new hire?

Twenty calendar days from the hire date under Section 43-5-598, or twice monthly for electronic filers with submissions twelve to sixteen days apart. Penalties reach $25 for second and subsequent offenses and $500 per offense where employer and employee conspire to avoid reporting.