Does South Carolina tax bonuses?
Yes. South Carolina treats bonuses as taxable income and includes them in the same graduated income tax system used for regular wages.
Behind the numbers
Behind the numbers
Updated: July 12, 2025
How to calculate bonus tax in South Carolina
In most cases, employers should aggregate bonuses with regular wages and apply standard state withholding tables based on the total amount. There is no general flat rate for supplemental wages like bonuses.
However, if supplemental wages — such as bonuses, commissions, or overtime — are paid separately from regular wages and the federal flat withholding rate (currently 22%) is used, South Carolina allows a 6.2% flat rate to be applied for state income tax withholding. If the supplemental pay is combined with regular wages and paid in the same frequency, withholding is calculated on the total amount using standard withholding tables.
Are vacation and sick pay taxed the same way in South Carolina?
Yes, vacation or sick pay is typically subject to withholding just like regular wages if it covers time away from work. However, if it’s paid in addition to regular wages (for example, a payout or bonus-style lump sum), it is treated as a supplemental wage and may follow the same rules covered above.
How do bonuses work in South Carolina?
Bonuses are taxed and reported like other income and must be included on Form W-2.
How can employers in South Carolina pay bonuses to employees?
Bonuses can be paid via:
- Check
- Direct deposit
- Pay card
What is the bonus tax rate in South Carolina?
South Carolina’s income tax rates range up to 6.5%, depending on the employee’s total taxable income. Bonuses are taxed using these same graduated rates unless the optional 6.2% flat rate is used when the bonus is paid separately and federal flat withholding is applied.
Why are bonuses taxed differently than standard pay?
This isn’t the case — the same rules apply to all income.