South Carolina Hourly Paycheck Calculator
South Carolina has a big history dating back to its days as one of the original 13 colonies and small business owners have been around for just as long.
While South Carolina may be big on history, it isn’t big on payroll taxes or payroll laws. We’ll cover the basics here to get you started.
South Carolina payroll taxes
South Carolina withholding tax
When you have employees, you’re responsible for taking South Carolina income tax out of their paychecks to go towards their annual tax liability. Even employees who are not residents of South Carolina must have tax withheld.
It starts when your employee is hired and completes form SC W-4, South Carolina Employee’s Withholding Allowance Certificate. Along with personal information like name, address, and Social Security Number, employees note the number of allowances they are claiming or whether they are exempt from withholding.
A note on employees who claim to be exempt: the employee needs to complete a new SC W-4 by February 15 each year to continue to claim exemption. If they don’t, you’ll withhold tax as if the employee is single with zero allowances.
Armed with this information, you’ll do some math on form WH-1603F, Formula for Computing South Carolina 2021 Withholding Tax, or use the tax tables to determine how much tax to take out of your employees’ paycheck.
You can save yourself time by using Gusto’s South Carolina Hourly Paycheck Calculator. You’ll input information from SC W-4 and wage amounts and the calculator will do the rest.
Paying South Carolina withholding tax
You’ll use the same payment frequency as you use with the IRS. If you pay your federal withholding tax weekly, you’ll pay South Carolina weekly too.
South Carolina makes it convenient for you to pay online through their tax portal, which is required for employers that withhold $15,000 or more per quarter or make 24 or more withholding payments a year. However, if you don’t meet these requirements and you’d rather send a check, you can.
Regardless of when you pay your tax, you’ll need to submit quarterly payroll tax returns using form WH-1605, SC Withholding Quarterly Tax Return for the first, second, and third quarters and a combined fourth quarter and annual reconciliation using form WH-1606, SC Withholding Fourth Quarter and Annual Reconciliation Return.
Don’t forget to file a quarterly return even if you didn’t withhold any South Carolina income tax.
South Carolina unemployment tax
To help South Carolina unemployed workers, an unemployment insurance tax is paid by employers.
For 20221, the South Carolina unemployment tax applies to the first $14,000 of each employee’s pay and rates range from 0.06% to 5.46%.
If you’re a new employer, you’ll pay 0.55%.
Quarterly wage reports are required that include things like employees’ names, Social Security Number, total hours worked, and wages paid. These reports should be filed online using the State Unemployment Insurance Tax System. For employers with fewer than 100 employees, filing with a paper form is an option.
South Carolina payroll rules
Final paychecks in South Carolina: Final wages are due to employees within 48 hours of leaving or the next regularly scheduled pay date, not to exceed 30 days.
Minimum wage in South Carolina: Although legislation has been recently introduced to set a state minimum wage greater than the federal minimum wage, South Carolina employers must pay employees at least $7.25 per hour.
Submitting W-2s and 1099s in South Carolina: W-2s and any 1099s with South Carolina withholding tax must be sent to the South Carolina Department of Revenue by January 31.
Workers’ compensation in South Carolina: With a few exceptions, workers’ compensation insurance is required when you regularly have at least four full or part-time employees.
New hire reporting in South Carolina: You should report new employees to the South Carolina Department of Social Services within 20 days of the worker’s first day.
Overtime pay in South Carolina: South Carolina doesn’t have a state law addressing overtime pay, so it follows the rules set out in the federal Fair Labor Standards Act, which generally requires hourly employees to be paid at least 1.5 times their regular hourly wage for any hours over 40 in a workweek.
Federal payroll taxes in South Carolina
You can’t stop with the state taxes because you’ll also need to collect and pay federal payroll taxes.
These can be broken down into three categories.
|Federal Payroll Taxes in 2021|
|Federal income tax (FIT)||Federal unemployment tax (FUTA)||FICA tax|
|Additional Medicare tax|
- Federal income tax
All employees, unless exempt, must have federal income tax taken out of their paycheck.
Like South Carolina, it starts with a form that your employees will complete when they start working for you. This form is called the Form W-4 and includes a lot of the same information as the South Carolina form SC W-4.
You’ll take the information from Form W-4 and use the federal tax tables to figure out how much tax to take out. But if you don’t want to sift through the calculations on your own, payroll software can do this for you.
A new Form W-4 isn’t required each year, but it’s a good idea for employees to review it annually in case their tax situation changes. Life events like getting married or having a child can impact how much tax they owe.
And hang on to these forms and file them away in your payroll records. You won’t need to send them to the IRS unless they ask.
- Additional Medicare tax
This tax came into play in 2013 and only applies to particular workers, which depends on their tax filing status and total pay.
As an employer, you’ll need to withhold this tax when an employee earns more than $200,000 per year. When this happens, you’ll withhold 0.9% of the excess wages.
- Federal unemployment tax
In addition to the state unemployment tax you’ll pay to South Carolina, you’ll also need to pay the federal government’s unemployment tax.
In 20221, the first $7,000 of each employee’s pay is taxable at a rate of 6%. However, tax credits are available if you pay your state unemployment tax on time which can reduce your rate to 0.6%.
- FICA tax
FICA stands for Federal Insurance Contributions Act and is made up of the Social Security tax and the Medicare tax.
Both you and your employee pay this tax and you’ll each pay the same amount.
For 2022, you each pay 6.2% on the first $147,000 of the employee’s pay for Social Security tax. And for Medicare tax, you’ll each pay 1.45% of all the employee’s wages.
That’s it! You’re up to speed. You’ll be processing your payroll in no time. Remember to stay on top of deadlines because late tax payments or filings can come with hefty penalties. And if you find yourself needing help, you can call on payroll accountants to lead the way.