South Dakota Payroll Taxes for Employers (2026): SUTA and State Programs
Last updated: 2026-10-12 · 2026 rates checked against SD Dept. of Labor & Regulation's own pages and the other official sources below
South Dakota employers pay state unemployment tax (SUTA) on the first $15,000 of each employee's wages in 2026, and new employers pay 1.75% — at most $262.50 per employee for the year. Every South Dakota employer also pays federal Social Security (6.2% up to $184,500), Medicare (1.45%) and FUTA (0.6% on the first $7,000).
What will payroll taxes cost me in South Dakota?
Enter your headcount and average pay to see the employer's share of South Dakota and federal payroll taxes for 2026. Change the SUTA rate to the one on your rate notice.
South Dakota employer payroll tax estimator · 2026
Runs in your browser · nothing is sent anywhere| Tax | Per year |
|---|---|
South Dakota unemployment (SUTA) 1.75% × first $15,000 per employee | $1,313 |
Federal unemployment (FUTA) 0.6% × first $7,000 after the full state credit | $210 |
Social Security (employer half) 6.2% × first $184,500 | $15,500 |
Medicare (employer half) 1.45% of all wages | $3,625 |
| Total employer taxes | $20,648 |
| Per employee | $4,130 |
Assumes every employee earns the average and works in South Dakota all year. Workers' comp premiums and benefits are extra — the payroll cost calculator adds them.
South Dakota unemployment insurance tax (SUTA) in 2026
- 2026 taxable wage base
- $15,000 per employee (24th highest of 51)
- New-employer rate
- 1.75%
- How the new-employer rate works
- Year 1: 1.20% (non-construction) + 0.55% investment fee; construction 6.00% + 0.55%.
- Most a new employer pays per employee
- $262.50 (1.75% × $15,000)
- 2025 average employer rate
- 0.37% of taxable wages (U.S. DOL)
- Employee contribution
- None — employer-paid only
Same $15,000 wage base as Massachusetts. Register with SD Dept. of Labor & Regulation when you first pay wages in South Dakota; you get an account number for quarterly wage reports and tax payments.
Federal payroll taxes every South Dakota employer pays
- Social Security: 6.2% from you and 6.2% withheld from the employee, on wages up to $184,500 in 2026.
- Medicare: 1.45% each on all wages; withhold an extra 0.9% (employee only) on wages over $200,000.
- FUTA: 6.0% of the first $7,000 per employee, less up to 5.4% credit for South Dakota unemployment tax paid on time = 0.6%, or $42 per employee.
- Federal income tax withholding from each paycheck based on the employee's Form W-4.
Next for South Dakota employers: South Dakota paycheck calculator (employee withholding) · South Dakota new hire reporting · South Dakota payday & final paycheck rules · South Dakota workers' comp · full payroll cost calculator
South Dakota payroll tax FAQ
What is the South Dakota SUTA rate for new employers in 2026?
1.75%. Year 1: 1.20% (non-construction) + 0.55% investment fee; construction 6.00% + 0.55%.
What is the South Dakota SUTA wage base for 2026?
$15,000 per employee. Once an employee's 2026 wages pass that amount, you stop paying South Dakota unemployment tax on them for the rest of the year. That is the 24th highest wage base of the 50 states and DC (the federal FUTA base is $7,000).
Do employees pay unemployment tax in South Dakota?
No. In South Dakota unemployment tax is paid only by the employer; it can't be deducted from pay. Only Alaska, New Jersey and Pennsylvania collect an employee share.
What other payroll taxes do South Dakota employers pay?
For 2026, South Dakota has no statewide paid-leave or disability payroll tax, so the state-level employer tax is unemployment insurance. You still withhold any state income tax from employees' pay.
How much FUTA do South Dakota employers pay?
0.6% of the first $7,000 of each employee's wages — $42 per employee per year — after the full 5.4% credit for paying South Dakota unemployment tax on time. South Dakota is not a credit-reduction state for 2026.
How does my South Dakota SUTA rate change after the first years?
New employers keep the new-employer rate until they have enough history to be experience-rated (the timing is set by state law). After that, SD Dept. of Labor & Regulation assigns a rate each year based on your layoffs and benefit charges. Use the rate on your annual rate notice. The 2025 average employer rate in South Dakota was 0.37% of taxable wages.
Official Sources
Figures checked against these sources on 2026-10-12- SD DLR — reemployment assistance for businesses — UI wage base and rates
- SD DLR — business FAQ — UI wage base and rates
- IRS Publication 15 (2026), Employer's Tax Guide
- IRS Topic 759, Form 940 — FUTA
- U.S. DOL ETA — Employer contribution rates, CY 2025
Related Resources on This Site
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- Business LicenseSouth Dakota business license requirements
- Resale PermitSouth Dakota resale certificate & seller's permit
- LLChow to form an LLC in South Dakota
- FormationSouth Dakota annual report due date, fee & franchise tax
- Sales TaxSouth Dakota sales tax rates & rules
- Minimum WageSouth Dakota minimum wage
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Payroll taxes in other states
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General information, not tax advice. Rates change every year; confirm yours on the notice from SD Dept. of Labor & Regulation before filing.