Employment taxes - South Carolina

Summary of differences between federal and state regulations

Income tax withholding

If you'll be employing others to work in your business, you'll need to withhold payroll taxes for both the federal government, FICA and the State of South Carolina. South Carolina requires withholding from:

• Wages
• Prizes
• Royalties
• Winnings
• Nonresident contractors (contracts exceeding $10,000.00)
• Rental payments made to nonresidents who own five or more residential units or one or more commercial properties in South Carolina
• Net proceeds going to nonresident sellers of real estate and associated tangible personal property located in South Carolina.

South Carolina resident withholding agents must deposit state withheld taxes with their local banks.

Unemployment taxes

All states finance UC primarily through contributions from subject employers on the wages of their covered workers. In addition, three states (Alaska, New Jersey, and Pennsylvania) collect contributions from employees. These taxes are deposited by the state to its account in the UTF in the Federal Treasury, and are withdrawn as needed to pay benefits.

Many states have adopted a higher tax base than what is provided in FUTA. Hawaii's wage base is usually higher and changes periodically. In all states, an employer pays a tax on wages paid to each worker within a calendar year up to the amount specified in state law. In addition, most of the states provide an automatic adjustment of the wage base if federal law is amended to apply to a higher wage base than that specified under state law. As a result of the many variables in states taxable wage bases and rates, benefit formulas, and economic conditions, actual tax rates vary greatly among the states and among individual employers within a state.

Wages subject to unemployment tax in this state equal $7,000.

Minimum and maximum rates in this state are 1.24 and 6.10 %. Rates apply to experience rated employers only and do not include applicable surtaxes or penalties.

State

Contacts

Income tax withholding
Department of Revenue

Unemployment taxes
Employment Security Commission

Regulations

Income tax withholding
Chapter 117, Article 18, Withholding (117-910 et seq.)

Unemployment taxes
South Carolina Code of Regulation, Chapter 47 Employment Security Commission

Federal

ContactsInternal Revenue Service

Regulations Title 26 Code of Federal Regulations, Internal Revenue