Because South Carolina hasn’t established a state-specific minimum wage, employers aren’t left to guess what to pay their team — they simply follow the federal standard. Right now, the legal minimum wage in South Carolina is $7.25 per hour.
What you’ll learn
What you’ll learn
Key takeaways
- South Carolina has no official state minimum wage and follows the federal minimum of $7.25 per hour
- Employers should focus on keeping accurate records of how many hours each employee works, their base wage rate, and how much they earn in tips
- As of 2026, there are no finalized plans for the minimum wage to go up in SC, but some bills to do so have been introduced in the state House of Representatives
- Legislators have also introduced bills to increase the federal minimum wage, but they have not passed
In this guide, we will break down South Carolina’s current wage rules, the compliance risks employers need to watch out for, and the pending legislation that could impact your payroll down the road.
South Carolina minimum wage in 2026
Though most states set their own minimum wage rates, they are not actually required to. South Carolina is one of the five states that does not currently have a state-specific minimum wage law. Nearby North Carolina has a basic minimum rate of $7.25 per hour, the same as the federal minimum. Check out a minimum wage by state summary to see how rates compare nationwide.
Because South Carolina does not have its own minimum wage law, it defaults to the federal minimum as set by the Fair Labor Standards Act (FLSA). Employers in South Carolina must pay eligible employees at least $7.25 per hour.
Wage alert: A proposed $25 federal minimum wage
- In late April 2026, lawmakers in Congress introduced the Living Wage for All Act, which proposes increasing the federal minimum wage to $25 per hour.
- Because South Carolina defaults to the federal minimum wage rate, this legislation would impact local employers if it passes.
- However, this is currently just a proposal, and the SC minimum wage remains $7.25 for now.
For tipped employees, the minimum wage in South Carolina is $2.13 per hour. If tipped workers don’t earn enough in tips for their earnings to total $7.25 per hour, their employers pay the difference.
Could South Carolina establish its own minimum wage?
State legislators have recently introduced SC Bill 3809, which would set an official state minimum wage of $17.00 per hour, effective January 1, 2027. If the bill passes, the state’s Department of Labor, Licensing, and Regulation would officially notify employers by November 2026 so they could prepare their payroll budgets. For now, however, the bill is only a proposal, and employers must continue to adhere to the $7.25 federal rate.
Rules for tipped employees and the tip credit
Tipped employees are subject to different labor rules. To account for tips, the federal minimum for tipped workers is set at $2.13 per hour. That’s the rate that applies in South Carolina.
It’s a little more complex than just paying tipped workers $2.13 per hour, though. If the workers don’t earn enough tips to reach $7.25 per hour in total earnings — tips and cash wage combined — the employer must pay them the difference.
Sample scenario
For example, say a waiter’s earnings average out to $6 per hour over an eight-hour shift, including both tips and the $2.13 per hour base wage. The waiter’s employer would have to pay him an additional $1.25 per hour to bring his total earnings up to the minimum wage.
Under the FLSA, you can classify any employee who earns more than $30 in tips monthly as a tipped worker. Just make sure you keep clear records to stay compliant with the FLSA and defend against wage claims. Track details for each employee, such as:
- Hours worked each day
- Total hours worked in each workweek
- Regular hourly wage
- Overtime hourly wage
- Total wages paid
- Tips earned (if applicable)
- Overtime earnings (if applicable)
- Payment dates and pay periods covered
Accurate, accessible records will help keep everyone on the same page. Refer to the employer’s guide to tipped wages for insights into what qualifies as a tip and how to manage payroll calculations for tipped workers.
Exemptions and special wage classifications
While most businesses and employees fall under the FLSA, there are some exemptions. Generally, FLSA rules apply to businesses that make at least $500,000 in annual gross sales. Even if your business earns less than this amount, your individual employees are probably still covered by the FLSA, unless they fit into one of these exemptions:
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Double-check the exact requirements for an exemption before paying any employee less than the federal minimum wage of $7.25 per hour. Violating the FLSA can lead to financial penalties and even criminal prosecution for willful violations. Document the appropriate evidence to show why you treated an employee as exempt from the minimum wage in the FLSA.
Managing overtime and federal labor law compliance
South Carolina also defaults to the FLSA rules on overtime. Under the FLSA, employers must pay workers at least 1.5 times their usual hourly rate for each hour they work beyond 40 hours in a workweek. There’s no limit to overtime hours for employees over 16 years old.
So if you have a worker who typically earns $20 per hour, her overtime pay rate would be $30 per hour ($20 x 1.5). If she works 50 hours in a workweek, she would earn $800 for the first 40 hours and $300 for the 10 overtime hours, or $1,100 total.
When managing overtime payments, it’s crucial to keep detailed records of the hours employees work, their typical pay rates, and their overtime pay rates. You can refer back to these records in case there’s a wage dispute or to gain insights into your workforce management.
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Best practices for South Carolina payroll management
Staying compliant with state and federal wage laws is a key part of ensuring your business’s success. Apply these payroll management best practices to avoid penalties and protect your business:
- Maintain detailed, organized records of all payroll transactions for each employee.
- Schedule audits to find and correct any discrepancies in your records.
- Classify workers correctly as exempt or non-exempt based on FLSA rules.
- Stay updated on changes to South Carolina and federal labor laws.
Staying ahead of all the rules starts with payroll process you can feel confident in from day one.
Bottom line: Staying ahead of South Carolina wage laws pays off
While South Carolina currently defaults to the federal minimum wage of $7.25, lawmakers continue to propose increases at both the state and national levels. Staying compliant means doing your due diligence today — like maintaining payroll records and properly classifying workers — while keeping a close eye on proposed changes, such as SC Bill 3809. Plus, using reliable payroll software to automate your tracking and calculations, you can protect your business from potential penalties and ensure your team is always paid accurately, no matter what legislation passes tomorrow. If you have any questions on how OnPay can help, our team is here to assist!
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Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.