Updated January 13, 2021
To outsiders, South Dakota is all about that giant sculpture carved on the side of a mountain. To insiders, there’s a whole lot more to the state than Mount Rushmore. You kind of feel bad for people who have never tasted kolache, chislic, or kuchen. But what definitely makes you pull your hair out as a small business owner is having to deal with payroll taxes.
We definitely want you to keep your hair. That’s why we designed a nifty payroll calculator with you in mind. All you have to do is enter wage and W-4 information for each of your employees into the calculator. Before you know it, you’ll have all the state and federal payroll taxes calculated. Remember, even though South Dakota doesn’t charge a state income tax, you still have to pay unemployment insurance. More on that later.
While a 0% state income tax is saving you from some calculations, you are still responsible for withholding and paying federal payroll taxes. Luckily, our South Dakota payroll calculator is here to assist with calculating your federal withholding and any additional contributions your business is responsible for.
Here’s a quick overview of what you need to know when you’re calculating federal payroll taxes. If you would like to see each step in detail, you can click here to read our step-by-step federal income tax guide.
You already know that the State of South Dakota charges a 0% income tax. And even better, no cities within the state charge a local income tax. It’s definitely nice to have one less thing to worry about.
As an employer in South Dakota, you are responsible for paying unemployment insurance to the state. The rate ranges from 0% all the way up to 9.5% on the first $15,000 in wages paid to each employee in a calendar year.
If you’re a new employer, you will pay 1.2%. New construction employers will have to pay 6%.
Remember, be sure to pay your SUI in full and on time so you can be eligible for the FUTA tax credit!
That’s it! You’ve checked “payroll taxes” off your to-do list so you can focus on growing your business. Once each employee’s net pay is calculated (taking deductions and withholdings into consideration), you’re in the clear.
All you have to worry about is getting your employees paid on time as well as setting aside whatever you owe in FICA and UI taxes. The numbers can add up quickly if you don’t pay close attention to them!
You will need to use Form 941 to file federal taxes quarterly, and Form 940 to report your annual FUTA tax. You can pay taxes online using the EFTPS payment system. More details about employment tax due dates can be found here.
If all that wasn’t enough, here are a couple more links that can help you become the payroll expert your small business needs you to be!