South Carolina payroll setup for your first hire

South Carolina takes state income tax from paychecks. Those amounts sit with the Department of Revenue, not the Department of Employment and Workforce.

South Carolina takes state income tax from paychecks. This is not Texas, Florida, Washington, or Tennessee. Those states do not take state income tax from paychecks. A federal Employee’s Withholding Certificate (Form W-4) is not the South Carolina certificate.

SCDOR is the South Carolina Department of Revenue, the income-tax office. The Withholding page says every employer that has an employee earning wages in South Carolina and who is required to file a withholding return with the IRS is also a withholding agent in South Carolina. That shop must withhold from each paycheck, file a quarterly withholding return, and send the withheld amount to the Department of Revenue. WH-105, the South Carolina Withholding Tax Information Guide, prints the same two-part test. Register on MyDORWAY, the Department of Revenue e-services portal, or file Form SCDOR-111, Business Tax Application. The Department of Revenue assigns a nine-digit Withholding File Number. Hold that number. A federal Employer Identification Number, called FEIN, is not that number. A Department of Employment and Workforce login is not that number. A payroll login is not either account.

Employees complete Form SC W-4, South Carolina Employee’s Withholding Allowance Certificate. WH-105 says each employee hired after December 31, 2019, or a previously hired employee who wants a change, must give you a signed SC W-4. If a new hire does not give you Form SC W-4, withhold at zero allowances. If an employee claims 10 or more allowances, or you believe the certificate is wrong, send a copy to the Department of Revenue within 30 days. The federal W-4 is not that South Carolina certificate.

South Carolina does not add a county income tax on the same withholding file. This is not Maryland’s county or Baltimore City tax. Wages earned in South Carolina are taxed by South Carolina even if the worker lives in another state. If a South Carolina resident earns wages in a state that does not take state income tax, withhold for South Carolina.

File Form WH-1605, SC Withholding Quarterly Tax Return, for the first three quarters. File Form WH-1606, SC Withholding Fourth Quarter and Annual Reconciliation Return, for the fourth quarter. Those returns are due the last day of the month after the quarter: April 30, July 31, October 31, and January 31. Send payments on Form WH-1601. WH-105 says resident withholding agents pay on the same schedule as their federal deposits. Shops that withhold $15,000 or more in a quarter, or that make 24 or more payments in a year, must file and pay on MyDORWAY. File a return for each open quarter even if no tax was withheld. A payment is not a return. The withholding number still sits with the Department of Revenue. The unemployment number still sits with the Department of Employment and Workforce.

When you owe unemployment: $1,500 in a quarter, or one person in 20 weeks

DEW is the South Carolina Department of Employment and Workforce. That tax is often called SUTA, state unemployment tax, or SUI, state unemployment insurance. The Employer Resources page restates the regular-shop test. You become liable if you pay $1,500 or more in wages in any calendar quarter, or you have at least one employee during any 20 weeks in a calendar year. S.C. Code § 41-27-210 prints the same $1,500-quarter or 20-week test for the current or preceding calendar year. The weeks need not be consecutive. Domestic shops use a $1,000-quarter test. Agricultural shops use a $20,000-quarter test, or 10 workers in 20 weeks. A 501(c)(3) nonprofit often becomes liable at four employees in 20 weeks in the current or preceding year. A shop already liable under the Federal Unemployment Tax Act, called FUTA, with South Carolina employees is also liable. This scorecard is the regular-business path.

South Carolina Business One Stop tells shops to file with the Department of Employment and Workforce if they have at least one employee. The Department of Employment and Workforce then decides liability. That one-employee filing line is not the $1,500-quarter or 20-week tax test. Do not treat the one-employee filing note as a tax clock.

This is not California’s $100-in-a-quarter test. There is no 15-day California clock on the Department of Employment and Workforce page. Do not copy that clock onto South Carolina. This is not Oregon’s $1,000-quarter or 18-week test. Do not copy an 18-week clock onto South Carolina. This is not Indiana’s $1 covered-wage test. Do not copy that $1 test onto South Carolina. This is not Maryland’s one-worker clock from the first day of business. Maryland also tells shops to file a Combined Registration Application within 20 days of opening. South Carolina does not use that Combined Registration Application. Minnesota tells shops not to register unemployment until covered wages have actually been paid. South Carolina uses the $1,500-quarter or 20-week test. Wisconsin uses that same dollar-and-week pair. Wisconsin’s unemployment office is not the Department of Employment and Workforce. South Carolina does take state paycheck withholding. Do not treat South Carolina like a no-withholding state.

The Department of Employment and Workforce assigns an Employer Account Number, often called EAN. Hold the number on the tax-rate notice and on SUITS. Do not substitute a federal EIN for that number. Do not substitute the Withholding File Number.

Register unemployment on SUITS. File later wage reports on the same portal.

Those are two doors on the same Department of Employment and Workforce office. SUITS is the State Unemployment Insurance Tax System, the unemployment-tax portal. The SUITS page says shops that have paid wages in covered employment register for an employer account. In most cases you can register, receive an Employer Account Number, file wages, and pay in the same session on uitax.dew.sc.gov. A 501(c)(3) nonprofit waits for staff review before the account is ready. After the account exists, file the quarterly wage report and payment on SUITS. A quarterly wage report is not the new-hire report.

Quarterly unemployment wage reports and payments are due April 30, July 31, October 31, and January 31. Shops with 10 or more employees must file those wage reports electronically. The Department of Employment and Workforce still accepts paper from shops with fewer than 10 employees.

The Department of Employment and Workforce’s 2026 tax-rate page prints the taxable wage base as the first $14,000 of wages a worker earns from that employer in the calendar year. Newly liable shops that do not acquire another shop’s experience start at the tax rate for class 12, or 1% (class 30), whichever is higher, plus the Departmental Administrative Contingency Assessment, called DACA. DACA is 0.06%. There is no solvency surcharge in 2026. Class 12’s 2026 base rate is 0.150%. Class 30’s 2026 base rate is 1.000%. One percent is higher than 0.150%, so a new shop’s 2026 total effective rate on that table is 1.060%. Use the rate on your tax-rate notice and on SUITS, not a number from a software page.

New hire is a 20-day Department of Social Services report. A SUITS wage report does not take it.

The new-hire report is a list of who you just hired. It is not a box on the quarterly unemployment wage report. SCDSS is the South Carolina Department of Social Services. The South Carolina Business One Stop hiring page requires a report of every newly hired employee within 20 days after the employee’s first day of work. File at newhire.sc.gov. S.C. Code § 43-5-598 sets that clock at 20 calendar days of the hiring of an employee who resides or works in South Carolina. The same statute counts a rehire after a 60-day unpaid gap as a new hire. Electronic shops that report twice a month keep those files no fewer than 12 days and no more than 16 days apart. A quarterly SUITS wage report does not satisfy that clock. This is not Massachusetts’s 14-day Department of Revenue report. This is not Georgia’s 10-day report.

The payroll service can send the file. The clock still sits on you.

Workplace injury insurance is due when you regularly employ four or more people. The Workers’ Compensation Commission does not sell the policy.

This is Florida’s four-employee wait. It is not Oregon’s first-subject-worker path. It is not Tennessee’s five-employee wait. It is not Missouri’s five-employee wait. It is not Wisconsin’s three-employee or $500-quarter path. It is not the three-employee-only test used in Georgia, North Carolina, or Virginia. It is not Texas optional coverage. It is not Washington’s exclusive state fund. It is not Ohio’s Bureau of Workers’ Compensation monopoly. South Carolina calls this workers’ compensation.

S.C. Code § 42-1-150 defines private employment as work in which four or more employees are regularly employed in the same business. S.C. Code § 42-1-360 exempts a shop that has regularly employed fewer than four employees in the same business in the State, or that had a total annual payroll under $3,000 in the previous calendar year. The Workers’ Compensation Commission employer FAQ restates the four-employee rule. Part-time workers and family members count. Agricultural shops, casual employees, railroads, federal employees, and some commission real-estate agents sit on other exemptions. This scorecard is the regular-business path.

WCC is the South Carolina Workers’ Compensation Commission, the office for that coverage. WCC does not sell that policy. The Commission says ordinary shops buy a licensed private policy, or use the assigned-risk program administered by the National Council on Compensation Insurance, called NCCI. A shop may also apply to self-insure or join a self-insurance fund. That assigned-risk path is not a Washington-style exclusive state fund. A payroll login is not a policy.

A shop that buys a policy while still exempt stays under the Act until it files Form 38 with the Commission. A shop that drops below four employees and wants out of the Act also files Form 38. These pages do not print a same-day drop.

How Gusto and Patriot describe South Carolina

Confirm the live Withholding File Number on MyDORWAY. Confirm the Employer Account Number and rate on SUITS and on the tax-rate notice. Confirm workplace injury insurance with a licensed carrier or on the Workers’ Compensation Commission coverage pages.

Gusto’s South Carolina help article says Middesk (Gusto’s business-verification company) may register state income-tax withholding and state unemployment insurance (SUI). It names the South Carolina Department of Revenue for withholding and the Department of Employment and Workforce for unemployment tax. It restates the $1,500-quarter or 20-week unemployment test. It calls the withholding account a Withholding File Number and says an online registration often returns that number in 24 hours, or three weeks by mail. It calls the unemployment number a six-digit Employer Account Number and says that number arrives two to three weeks after registering. It lists Form WH-1605, Form WH-1606, Form WH-1601, and Form UCE-101 / UCE-120 among South Carolina files. It tells shops to authorize Gusto on Form UCE-1010, the Written Authorization Form. It also tells shops not to enter the 0.06% DACA line in Gusto. Confirm the live numbers on MyDORWAY and SUITS. Confirm the rate on the tax-rate notice. Read Gusto’s South Carolina article. See Gusto on the directory.

Patriot’s registration article tells new shops to register on MyDORWAY. The article says the South Carolina Department of Revenue will issue both the withholding number and the unemployment number. That combined-login line is what the software page says. Withholding sits with the Department of Revenue on MyDORWAY. Unemployment sits with the Department of Employment and Workforce on SUITS. Those are two agencies. The same article prints a 2026 new-employer SUTA base rate of 0.15% and a 0.06% contingency assessment that Patriot calculates separately. That 0.15% line is the class-12 base rate. The Department of Employment and Workforce says a new shop pays class 12 or 1% (class 30), whichever is higher, plus DACA. In 2026 that higher number is 1%, and the total effective rate on the published table is 1.060%. Use the rate on your tax-rate notice, not a number from a software page. The same article tells employees to complete Form SC W-4 and puts the 20-day new-hire report on South Carolina New Hire Reporting. The article also says workplace injury insurance is due if you have at least four employees, and that you can sign up through a private provider or a state-operated fund. The four-employee line matches the Workers’ Compensation Commission. The state-operated-fund line is what the software page says. The Commission’s ordinary path is a licensed private policy or the NCCI assigned-risk program. It is not a Washington-style exclusive state fund. Read Patriot’s registration article. See Patriot on the directory.

What still sits on the employer

• Decide that you have hit $1,500 in a quarter or one person in 20 weeks. Agricultural, domestic, nonprofit, and FUTA-liable shops use other tests.
• Complete MyDORWAY or Form SCDOR-111 so the Department of Revenue can issue the Withholding File Number. Complete SUITS so the Department of Employment and Workforce can issue the Employer Account Number.
• Hold the nine-digit Withholding File Number. Hold the Employer Account Number. Do not substitute a federal EIN for either number.
• Enter the premium rate from the tax-rate notice, not a marketing figure. The Department of Employment and Workforce prints class 12 or 1% (class 30), whichever is higher, plus 0.06% DACA. In 2026 that new-shop total on the published table is 1.060%. Confirm the live notice.
• File the quarterly unemployment wage report on SUITS after the account exists, even in a zero-wage quarter until the Department of Employment and Workforce closes the file.
• Register withholding on MyDORWAY or Form SCDOR-111 before the first withheld paycheck. Collect Form W-4 and Form SC W-4. A federal W-4 is not the South Carolina certificate. File Form WH-1605 and Form WH-1606 on the schedule the Department of Revenue assigns. Send payments on Form WH-1601.
• File the 20-day new-hire report with the Department of Social Services at newhire.sc.gov. A quarterly SUITS wage report does not satisfy that clock.
• Buy workplace injury insurance when you regularly employ four or more people, including part-time and family workers. The Workers’ Compensation Commission does not sell that policy. Payroll software does not issue that policy.
• Do not copy another state’s clock onto South Carolina. South Carolina does not use California’s $100-quarter test. South Carolina does not use Oregon’s $1,000-quarter or 18-week unemployment test. South Carolina does not use Indiana’s $1 unemployment test. South Carolina does not use Maryland’s one-worker Combined Registration Application clock. South Carolina does not wait to register unemployment the way Minnesota waits for covered wages. South Carolina does not skip state paycheck withholding the way Texas, Florida, Washington, or Tennessee do. South Carolina does not add county income tax the way Maryland does. South Carolina does use Florida’s four-employee workplace-injury wait. South Carolina does not use Oregon’s first-subject-worker path. South Carolina does not use Missouri’s or Tennessee’s five-employee wait. South Carolina does not use Wisconsin’s three-employee or $500-quarter path. South Carolina does not use the three-employee-only wait used in Georgia, North Carolina, or Virginia. South Carolina does not use Washington’s exclusive state fund. South Carolina does not use Ohio’s Bureau of Workers’ Compensation monopoly.

Also forming a company in South Carolina? Process Score compares registered agents there.