South Carolina Salary Paycheck Calculator
Processing payroll for your South Carolina business doesn’t have to feel like a chore. When you’ve got the correct information in your hands, payroll is a piece of cake. After reading through the answers to some of the most common South Carolina payroll tax questions, you’ll be able to get back to enjoying the Carolina coastal breeze in no time.
South Carolina payroll taxes
South Carolina withholding tax
South Carolina uses graduated tax rates that range from 0% to 7% for 2022.
How do South Carolina employers know how much tax to take out of employees’ paychecks? Employers use form SC W-4, South Carolina Employee’s Withholding Allowance Certificate, that employees complete when they are hired. Employees fill in personal identifying information like name and Social Security number and indicate how many allowances they are claiming. If the employee is exempt from South Carolina income tax, they should note it on the form. This way, employers know not to withhold tax. Tax-exempt employees will need to complete a new SC W-4 each year by February 15 to continue claiming their exemption. Other employees don’t need to fill out a new form each year, but it is a good idea for them to review it to make sure it’s still accurate.
With the information on form SC W-4, you’ll make some calculations using form WH-1603F, Formula for Computing South Carolina 2022 Withholding Tax.
When and how to pay South Carolina withholding tax
Employers follow the same payment frequency they use when paying the IRS their federal payroll taxes. If you pay the IRS semi-weekly, you’ll pay South Carolina semi-weekly also.
Most employers have two options for paying. They can pay online through South Carolina’s tax portal or they can send a check through the mail. However, online payments are required for employers that withhold $15,000 or more per quarter or make 24 or more withholding payments a year.
Quarterly payroll tax returns are required using form WH-1605, SC Withholding Quarterly Tax Return, for the first three quarters. For the fourth quarter, a combined quarterly and annual return are filed using WH-1606, SC Withholding Fourth Quarter and Annual Reconciliation Return. Employers need to file tax returns each quarter, even if no taxes are withheld.
South Carolina unemployment tax
Employers are solely responsible for paying South Carolina’s unemployment tax. For 2022, only the first $14,000 of each employees’ pay is taxed, and the tax rates range from 0.06% to 5.46%. All new employers pay a rate of 0.49% for 2022.
Each quarter employers will file a wage report and pay the tax that is due. Reports and payments can be made online using the Department of Employment and Workforce. For employers with fewer than 100 employees, mailing in a paper form is allowed.
FAQs about other South Carolina payroll rules
- What is the South Carolina salary threshold?
Because the state of South Carolina doesn’t have its own salary threshold, it adheres to the federal salary threshold, which is now $684 per week (equivalent to $35,568 per year for a full-year worker). The Department of Labor permits employers to count some bonuses, commissions, and other incentive payments toward meeting the standard salary level (up to 10%). Employees who earn at least $107,432 per year may qualify as “highly compensated.” See this Department of Labor fact sheet for details.
- When do final paychecks need to be given to employees when they leave?
All employees are owed their final wages within 48 hours of leaving or the next regularly scheduled pay date, not to exceed 30 days.
- When do South Carolina employers need to secure Workers’ Compensation insurance?
Requirements to obtain Workers’ Compensation vary by state, this table outlines some of these requirements. If you determine that your company is required to purchase Workers’ Compensation insurance in your state, learn how to sign up for this insurance with Gusto. Sometimes, companies get a request for a workers’ comp audit—head to this article and click the workers’ comp audit reports dropdown for more information.
- Are new hires reported to the state?
Yes, and they need to be reported within 20 days of their first day of work. Report new workers to the South Carolina Department of New Hire Reporting.
Federal payroll taxes for South Carolina employers
There are four key federal payroll taxes employers need to be aware of for 2022.
|Federal Payroll Taxes in 2022|
|Federal income tax (FIT)||Federal unemployment tax (FUTA)||FICA tax|
|Additional Medicare tax|
Similar to South Carolina, employees need to have federal income tax withheld from their paychecks. Employees complete federal Form W-4 when they begin work. With information on this form and the federal tax tables, the federal income tax withholding is calculated.
Additional Medicare tax
The Additional Medicare tax became law in 2013 and applies to certain employees. Employers must withhold Additional Medicare tax from employees who earn more than $200,000 per year. All wages above this amount are subject to a 0.9% tax that is taken out of employees’ paychecks.
Federal unemployment tax
Like the state, the federal government also has an unemployment tax. It’s called FUTA and it’s an annual tax employers pay on the first $7,000 of each employee’s wages. The FUTA rate for 2022 is 6%, but many employers only have to pay 0.6% each year.
How is FICA tax
The Federal Insurance Contributions Act, or FICA tax, is made up of the Medicare tax and the Social Security tax. In 2022, the Social Security tax requires employers and employees to each contribute 6.2% of wages up to $147,000. The Medicare tax requires each to contribute 1.45% of all wages. See the IRS webpage for details, like maximum thresholds.
|FICA Tax in 2022|
|Social Security tax||6.2% on the first $147,000 in 2022|
|Medicare tax||1.45% on all wages in 2022|
If you still have questions about your South Carolina or federal payroll taxes, get in touch with a payroll accountant who focuses on small businesses. You may also want to consider payroll software, which takes the work out of calculating payroll taxes. Once employees are set up with their tax information and wages, payroll can be run with just a few clicks. Tax forms are also created on time so deadlines aren’t missed.
The information provided by the Employer Tax Calculator is for general information and estimation. All of the taxes or fees that apply to your business may not be accounted for, or fully up to date. Gusto, Inc. (dba “Gusto”) does not promise or guarantee that the information in the Employer Tax Calculator is accurate or complete, and Gusto expressly disclaims all liability, loss or risk incurred by employers or employees as a direct result or an indirect consequence of its use. By using the Employer Tax Calculator, you waive any rights or claims you may have against Gusto in connection with its use.