Employers must navigate various regulations and requirements to ensure proper payroll withholding in each US state. This guide introduces what employers must pay and withhold from payroll in South Dakota.

Paying unemployment insurance (UI) in South Dakota

On top of withholding federal taxes such as Medicare and Social Security taxes, you are also responsible for withholding and paying certain South Dakota state taxes from your employee’s payroll. These taxes together are referred to as employer payroll taxes or payroll withholding. One of the taxes you must pay is unemployment insurance (UI).

Unemployment insurance is a national program administered by the US Department of Labor and is sometimes referred to as a reemployment assistance tax. The program provides temporary payments to people who are unemployed through no fault of their own. The employer pays the reemployment assistance tax via the online portal.

For more information on paying your unemployment insurance, refer to the South Dakota Department of Labor and Regulation. 

Unemployment insurance rates in South Dakota

In South Dakota, unemployment insurance rates are determined based on the employer's experience rating and the state's unemployment trust fund requirements. Employers can access their specific rates and make payments through the South Dakota Department of Labor and Regulation's online portal.

Employers are responsible for paying unemployment insurance contributions based on these rates. These contributions support the unemployment fund, providing benefits to eligible employees.

Personal income tax in South Dakota

South Dakota has no personal income tax; therefore, you do not have to withhold any personal income tax after hiring your first employee in the state.

Workers’ compensation

Unlike most other states, you do not need to purchase workers’ compensation in South Dakota. However, it is still highly encouraged that you purchase workers’ compensation coverage to limit your liability. For more information on workers’ compensation coverage in South Dakota, visit the state’s official website. 

Payroll tax due dates in South Dakota

Employers must adhere to payroll tax due dates to remain compliant and avoid penalties. South Dakota has specific deadlines for filing unemployment insurance taxes and other required payments:

Quarterly tax filings

Employers are typically required to file unemployment insurance tax reports quarterly. The due dates fall at the end of the month following each quarter:

Annual reconciliation

An annual reconciliation of all payroll taxes must be submitted by February 28th of the following year. For more information on filing deadlines, visit the South Dakota Department of Labor and Regulation - Filing Deadlines.

Submission process for payroll taxes in South Dakota

Employers are required to file unemployment insurance tax forms electronically using South Dakota’s online portal. This system ensures efficient and accurate filing. Employers should use forms and guidelines provided by the South Dakota Department of Labor and Regulation for all payroll-related submissions.

The South Dakota online portal allows employers to register, file, and pay their payroll taxes electronically, supporting efficient and accurate tax filing and payments.

Simplify US payroll tax compliance with Deel

While this guide provides essential information on South Dakota payroll taxes, payroll compliance, and state requirements extend beyond what is covered above. To streamline the process and ensure full compliance, companies can turn to Deel. 

Deel offers a comprehensive solution for managing US and international payroll, including payments, taxes, worker classification, and more. Speak with an expert today to see how you can streamline your US payroll processes and ensure compliance with state regulations.