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Taxes
South Dakota Payroll Taxes 2026: Complete Overview for Employers
South Dakota has no state income tax, but employers still owe SUI on the first $15,000 and must handle federal obligations.
South Dakota has no state income tax, but employers still face SUI, federal tax obligations, and strict labor laws. We cover it all — written for small business owners, not accountants.
Written by payroll professionals at Pacific Data Services — trusted since 1969.
South Dakota has no state income tax, simplifying payroll and maximizing employees’ take-home pay.
South Dakota only requires monthly pay frequency, giving employers broad flexibility in scheduling payroll.
With no income tax withholding and moderate SUI costs, South Dakota offers one of the simplest payroll compliance environments in the nation.
South Dakota has no state income tax, but employers still owe SUI on the first $15,000 and must handle federal obligations.
Get your EIN, register with South Dakota, set up withholding, new hire reporting — the complete checklist.
New employer rate 1.2%, experienced range 0.00%–9.35%, wage base $15,000.
South Dakota minimum wage $11.55/hr. South Dakota’s minimum wage is $11.55/hr, adjusted annually for inflation. Tipped employees may be paid $5.78/hr (50% of minimum wage).
IRS classification rules, South Dakota-specific considerations, misclassification penalties.
Gusto vs Paychex vs QuickBooks vs ADP — detailed comparison for South Dakota small businesses.