South Dakota Wage and Payroll Tax Facts
February 02, 2024
Having to comply with unique state taxes and wage laws can make processing payroll doubly daunting. Here’s everything you need to know about these rates and laws for the state of South Dakota.
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Table of Contents
- South Dakota Minimum Wage Rates
- South Dakota State Income Tax (SIT) Rates
- South Dakota State Unemployment Insurance (SUI) Rates
- South Dakota State Disability Insurance (SDI) Rates
- Miscellaneous South Dakota Tax Information
- South Dakota Employer Registration
- Additional South Dakota Payroll Tax Resources
South Dakota uses a moderately higher minimum wage rate than the one required by the federal government in the Fair Labor Standards Act (FLSA). Most of that increase is reflected in the state's Tipped Minimum Wage Rate, which is more than double the rate of its federal counterpart.
When it comes to processing payroll, South Dakota-based organizations must handle the following taxes in addition to those required by the federal government:
The below information was last updated January 30, 2024. It is not intended as legal or tax advice.
South Dakota Minimum Wage Rates
|
Wage Type |
South Dakota Rates |
Federal Rates |
|
Minimum Wage |
$11.20 |
$7.25 |
|
Tipped Minimum Wage |
$5.60 |
$2.13 |
|
Actual Tip Credit |
$5.60 |
$5.12 |
South Dakota State Income Tax (SIT) Rates
South Dakota is one of the few states that doesn't impose or collect a personal income tax.
South Dakota State Unemployment Insurance (SUI) Rates
SUI provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined by state law) and meet the state’s eligibility requirements.
|
South Dakota SUI Tax Details |
|
|
Taxable Wage Base |
$15,000 |
|
Employee Subject to Tax |
No |
|
Rates for Experienced Employers |
0.00% - 9.83% |
|
Rates for New Employers |
1.75% for the first year (includes 0.55% investment fee below)
|
|
Effective Period |
Calendar Year |
|
Voluntary Contributions Allowed |
Yes; prior to December 31 for the following year |
| Administrative Fee |
|
| Investment Fee* |
|
*Includes a 0.01% Obligation Assessment and 0.10% Training Investment Assessment.
South Dakota State Disability Insurance (SDI) Rates
SDI benefits are funded by employees through mandatory payroll deductions from each paycheck. South Dakota, however, doesn't require employers to collect an SDI tax.
Miscellaneous South Dakota Tax Information
Reciprocal Agreement(s)
Reciprocal agreements are when workers who live and work in different states are only required to pay taxes to the state where they live. South Dakota currently has no reciprocal agreements with any other states.
This doesn’t mean, however, that interstate workers living in South Dakota pay double. It’s federally illegal for two states to tax the same income. In most cases, the employee’s work state will credit or refund them at tax time based on the taxes they owe their home state. If the tax rates differ, the employee must cover the difference.
Paid Sick Leave (PSL) Taxes
The state of South Dakota doesn’t require employers to collect PSL taxes, nor does the state have a program providing such leave to employees.
Paid Family and Medical Leave (PFML) Taxes
The state of South Dakota doesn’t require employers to collect PFML taxes, nor does the state have a program providing such leave to employees.
South Dakota Employer Registration
The Department of Labor and Regulation can help with your state-based employer registration, including best practices, account numbers, and unemployment information.
|
Registration Details |
Department of Labor and Regulation |
|
Phone |
(605) 626-2312 |
|
Online Registration |
DLR General Login Page |
| Registration Form | Employer's Registration Application (Form 1) |
|
Registration Instructions |
Online and paper registration options are available. Account numbers will be issued in 5-7 days. |
|
Employer Self-Service Login |
DLR General Login Page |
Additional South Dakota Payroll Tax Resources
- Workforce Services for Businesses Homepage
- Reemployment Assistance Forms Library
- Reemployment Assistance Employer Handbook
This information is provided as a courtesy and may be updated at any time. It is not intended as legal or tax guidance. If you have questions or concerns, we encourage you to seek the advice of a qualified CPA, tax attorney, or advisor.
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