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★ South Carolina2026 Compliance Year

South Carolina Payroll Compliance

Every rate, wage base, and threshold South Carolina employers need for 2026 — sourced from SCDOR — including the brand-new two-bracket tax system signed into law this March, a genuine mid-year overhaul of the state's withholding structure.

Last reviewed: July 2026 · Sources: dor.sc.gov, dew.sc.gov
Min Wage
$7.25
federal floor
Income Tax
1.99% / 5.21%
new 2-bracket system
Local Tax
None
no city/county income tax
Bracket Threshold
$30,000
rate jumps above this
Paid Leave
None
no state program
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Minimum Wage & Hours

South Carolina has no minimum wage law of its own — it’s one of only five states (with Alabama, Louisiana, Mississippi, and Tennessee) with zero state minimum wage statute. The federal FLSA floor of $7.25/hour applies wherever the business is covered.

Item2026 ValueNotes
Effective minimum wage$7.25/hrFederal FLSA controls entirely; no state minimum wage law exists
Overtime rule40 hrs/weekFederal FLSA; no separate state overtime statute
Local wage ordinancesNoneNo South Carolina city or county sets its own minimum wage
States with no minimum wage law
South Carolina is one of just five
All five states with zero minimum wage statute default entirely to the federal $7.25 floor.
South Carolina
$7.25
Alabama
$7.25
Louisiana
$7.25
Mississippi
$7.25
Tennessee
$7.25
All five states rely entirely on the federal Fair Labor Standards Act floor, with no state law setting an independent rate.
🧾

State Income Tax Withholding

Governor McMaster signed H.4216 on March 30, 2026, radically simplifying South Carolina’s income tax from a multi-bracket graduated system topping out near 6.2%–6.4% down to just two brackets: 1.99% on the first $30,000 of taxable income, and 5.21% above that.

Item2026 ValueNotes
Bracket 11.99%On the first $30,000 of taxable income
Bracket 2 (top)5.21%On taxable income above $30,000
Prior system (pre-H.4216)Up to ~6.2%–6.4%Multi-bracket graduated system, replaced by H.4216
Standard deduction treatmentAdd-back + SCIADH.4216 requires adding back the federal deduction to FTI, then applying SC's own SCIAD instead
Required certificateSC W-4Federal-style allowance system
Local income taxNoneNo South Carolina municipality imposes one
OBBBA conformityNot yet conformedPer SCDOR Info Letter #26-4, federal tips/OT/SALT deductions don’t apply to SC returns as of this writing
South Carolina income tax structure
From multi-bracket to two brackets, overnight
H.4216, signed March 30, 2026, is one of the most significant mid-year state tax simplifications in the country this year.
Old top rate (pre-H.4216)
~6.2%
New top rate (H.4216)
5.21%
New bottom rate (H.4216)
1.99%
Bars scaled to the prior top rate. The two current H.4216 rates are highlighted in deep blue; the superseded pre-H.4216 rate is shown in lighter blue for historical reference.
⚠️
Payroll systems built on the old bracket table need a rebuild, not a patch
H.4216 didn't just adjust rates — it changed the entire calculation methodology, including how the standard deduction is applied (add back the federal deduction to Federal Taxable Income, then apply the South Carolina Individual Adjustment Deduction instead). A withholding table update alone won't capture this; payroll systems need the updated SCDOR formula, not just new bracket numbers.
🏭

Unemployment Insurance (SUI)

South Carolina’s SUI program is administered by the Dept. of Employment and Workforce (DEW), separate from SCDOR, which handles income tax withholding.

Item2026 ValueNotes
Administering agencySC DEWSeparate from SCDOR, which handles income tax withholding
FilingQuarterlyVia the SUITS online portal
2026 top income tax rate — regional comparison
H.4216 puts South Carolina just above Georgia
South Carolina's new 5.21% top rate now sits within 0.02 points of Georgia, though still above North Carolina's flat rate.
South Carolina (H.4216)
5.21%
Georgia
5.19%
North Carolina
3.99%
Tennessee / Florida
0%
Bars scaled to South Carolina's 5.21% rate, highlighted in deep blue. Neighboring states shown in lighter blue for reference.
About this guide: Independent editorial analysis for payroll professionals from publicly available South Carolina state government publications. Rates change; verify at official .gov sources. This is not legal or tax advice. Last reviewed July 2026.
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