Key figures
South Dakota payroll
2026, with sources
Reemployment Assistance
South Dakota calls unemployment insurance Reemployment Assistance (RA), run by the Department of Labor and Regulation. For 2026 the wage base stays at $15,000. A new non-construction employer pays 1.20% in its first year and 1.00% in years two and three if its account balance is positive, plus a 0.55% investment fee throughout. Experience-rated employers also pay a 0.08% administrative fee from 2026.
Wage rules
South Dakota’s minimum wage is set by a 2014 ballot measure and rises with inflation each January. DLR’s Division of Labor and Management handles wage payment questions.
- Minimum wage: $11.85 in 2026, indexed each January.
- Tipped minimum: half the full minimum wage.
- No state income tax withholding and no local payroll tax.
- No state paid leave or paid sick leave mandate.
- New hires reported within 20 days.
An example
A startup hiring a single engineer in Sioux Falls at $140,000 a year withholds no state tax. Its South Dakota payroll cost is 1.75% of the first $15,000 — $262.50 — for the first year, plus workers’ compensation insurance from a private carrier.
Deadlines
- QuarterlyReemployment Assistance wage and tax report
- Within 20 days of hireNew-hire report
The federal baseline
This page covers what South Dakota adds. The federal rules underneath it apply here too.
Common questions
What does unemployment insurance cost a new employer?
In the first year, 1.20% Reemployment Assistance tax plus a 0.55% investment fee on the first $15,000 of each employee’s wages — $262.50 per employee at most. Construction employers start at 6.00%.
Is there any state withholding or paid leave?
No. South Dakota has no state income tax to withhold, no paid family or medical leave program, no state paid sick leave mandate and no local payroll taxes.
Payroll next door
- NDNorth Dakota payrollLow graduated withholding, UI on a $46,600 wage base at 1.00% for most new employers, the federal minimum wage, and workers’ compensation only through the state fund, WSI.
- MNMinnesota payrollMinnesota added a 0.88% Paid Leave premium in 2026 (0.66% for small employers), charges UI on the first $44,000, requires earned sick and safe time and sets a $11.41 minimum wage.
- IAIowa payrollIowa withholds a flat 3.8%, cut its 2026 unemployment wage base to $20,400 with a 1.0% new-employer rate, and requires new hires reported within 15 days.
- NENebraska payrollNebraska’s minimum wage is $15.00 in 2026 and rises 1.75% a year from 2027. Paid sick time applies at 11 employees, and new employers pay 1.25% on $9,000.
- WYWyoming payrollWyoming payroll has no income tax withholding: UI on the first $33,800 at an industry rate, state-fund workers’ comp for extra-hazardous industries, and final pay on the next payday.
- MTMontana payrollMontana payroll is UI at an industry rate (1.10% for services) plus 0.18% AFT on $47,300, a $10.85 minimum wage, no paid leave premiums, and final pay that can be due immediately.
How South Dakota compares
- No tax on wagesStates with no state income tax on wagesSouth Dakota: no state income tax on wages. 9 of 51 states are on the list.
- Paid leave payrollStates with a paid leave or disability payroll programSouth Dakota: no state program. 16 of 51 states are on the list.
- Local payroll taxStates with city, county or district payroll taxesSouth Dakota: state-level only. 14 of 51 states are on the list.
Founder guides on this
- PeopleContractor or employee? Classification for startupsContractor or employee depends on control, not the contract. The IRS test, state rules, 1099s, payroll registration and the cost of getting it wrong.
- ComplianceFirst-year compliance calendar for a Delaware C-corpDelaware franchise tax, 1099s, the federal return, payroll filings, state annual reports and sales tax: the deadlines a young C-corp misses most, by month.
More of the South Dakota guide
- AccountingAccounting and state tax in South DakotaCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in South DakotaSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesPayables and contractors in South DakotaPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- ComplianceCompliance and filings in South DakotaRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in South DakotaCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.