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Employers must withhold South Carolina income tax from wages earned in the state, report it quarterly on Form WH-1605 or WH-1606, and pay on the required payment schedule. Electronic filing is mandatory at $15,000 per quarter or 24 annual payments.

What Is South Carolina Withholding Tax?

South Carolina withholding tax is the state income tax employers take out of employee paychecks. According to the South Carolina Department of Revenue (SCDOR), the amount withheld counts toward the taxpayer's total yearly income tax liability, so it works as a credit when the employee files an annual return.

It is separate from federal payroll taxes. Federal income tax withholding, Social Security, and Medicare run through the IRS, while South Carolina withholding uses state tables, state forms, and payment to SCDOR. Withholding can also apply beyond ordinary wages, including prizes, royalties, and certain payments to nonresidents, so check SCDOR guidance if you pay more than regular employees.

South Carolina Withholding Tax Rates for 2026

South Carolina does not use one flat withholding rate. SCDOR's 2026 withholding formula applies graduated rates to annualized taxable income:

Employers do not apply these rates to gross pay. Annualize wages, then subtract $5,000 per allowance the employee claims on the South Carolina W-4, plus a standard deduction of 10% of gross wages (capped at $7,500) if at least one allowance is claimed. With zero allowances, neither deduction applies. SCDOR's example: $750 weekly pay with three allowances leaves $20,100 of taxable income and $549.90 of annual withholding, or $10.58 per week. Employers may also use SCDOR's 2026 withholding tables.

Who Must Withhold South Carolina Income Tax?

Any employer with an employee earning wages in South Carolina. SCDOR says income earned in the state is taxed by South Carolina regardless of where the employee lives, and a South Carolina resident working in a state with no income tax should have South Carolina tax withheld. Employers register through the Business Tax Application on MyDORWAY, per South Carolina Business One Stop. Core duties include:

• Withhold tax from each employee's paycheck
• File a quarterly return for the amounts withheld
• Pay the withheld amounts to SCDOR

South Carolina Withholding Tax Filing Deadlines for 2026

Returns are due by the end of the month after the quarter closes:

October 31, 2026 falls on a Saturday and January 31, 2027 on a Sunday, so confirm any weekend adjustments on SCDOR's due dates calendar. Return deadlines are also not payment deadlines. Withholding is assigned to a quarter by paycheck date, not pay period, and payments follow their own schedule.

What Is Form WH-1605 Used For?

Form WH-1605 is the quarterly withholding return for the first three quarters. It reports South Carolina tax withheld during the quarter. File through MyDORWAY or mail a paper copy to the address on the return. Because tax is assigned to a quarter by paycheck date, a payroll paid on January 2 belongs to the new quarter even if the work happened in December. SCDOR requires all nine digits of the withholding account number and warns that prior-year forms can cause incorrect or delayed processing, so use the current form.

When Should Employers File Form WH-1606?

Form WH-1606 covers the fourth quarter and serves as the annual return, due January 31. Line 1 reports only fourth-quarter withholding, while lines 7 through 10 hold annual information. Employers that issue W-2s reporting South Carolina wages or withholding must also submit them directly to SCDOR; MyDORWAY is the agency's preferred upload method.

How Often Must Employers Pay South Carolina Withholding Tax?

Payment frequency can differ from return frequency. SCDOR sets payment timing by employer type:

• Resident withholding agents: payments are due with the same frequency as federal payments.
• Nonresident agents withholding under $500 per quarter: pay quarterly, by the last day of the month after quarter end.
• Nonresident agents withholding $500 or more per quarter: pay monthly, by the 15th of the following month.

A resident employer on a frequent federal schedule may therefore make several payments in a quarter yet file one return.

Does South Carolina Require Electronic Payroll Tax Filing?

Sometimes. SCDOR requires electronic filing and payment on MyDORWAY for taxpayers who withhold $15,000 or more per quarter or make 24 or more withholding payments in a year. Smaller employers may file on paper, though electronic filing is encouraged. MyDORWAY supports registration, W-2 and 1099 uploads, returns, and payments by credit card or electronic check. Employers can also file through third-party software vendors, and tax preparers filing more than 10 returns a year can apply for SCDOR's Batch Withholding Program.

How Payroll Software Can Help Employers

Employers searching for South Carolina payroll tax software are usually looking for help with repetitive withholding tasks. Good software can apply current-year allowance information to each paycheck, keep employee withholding records organized for audits and year-end reporting, track paycheck dates and quarterly totals, and produce reports that make preparing WH-1605 and WH-1606 easier. Software supports your process but does not replace it: employers remain responsible for accurate employee data, deadlines, and e-filing thresholds. Before choosing a platform, ask in writing whether it supports current South Carolina tables and which filing and payment tasks it actually performs.

Simplify Payroll Management With PayProNext

PayProNext is payroll software for U.S. small and growing businesses. Its website describes payroll processing, direct deposit, employee self-service, and payroll reports, and its Full Service plan lists federal, state, and local tax filing. This article has not verified South Carolina-specific features, so confirm setup, filing, and payment support with PayProNext before relying on them.

Frequently Asked Questions

What are South Carolina withholding tax rates for 2026?

After allowances and the standard deduction, SCDOR applies 0% below $3,640 of annual taxable income, 3% from $3,640 to $18,230, and 6% above that. Employers can use the formula or SCDOR's published tables, and should use only 2026 versions.

Who must withhold South Carolina income tax?

Any employer with an employee earning wages in South Carolina. Residence does not change that for work performed in the state. A South Carolina resident working in a state with no income tax should also have South Carolina tax withheld.

When are South Carolina withholding tax returns due?

April 30, July 31, October 31, and January 31 for quarters one through four. Returns are due by the end of the month after each quarter closes. Check SCDOR's calendar for weekend adjustments.

What is Form WH-1605 used for?

It is the quarterly withholding return for quarters one, two, and three. It reports tax withheld during the quarter. Use the current-year form and include the full nine-digit account number.

When should employers file Form WH-1606?

By January 31, for the fourth quarter and annual reporting. Line 1 covers only fourth-quarter withholding, while lines 7 through 10 hold annual information.

Does South Carolina require electronic payroll tax filing?

Yes, for employers withholding $15,000 or more per quarter or making 24 or more payments a year. Others are encouraged to file electronically through MyDORWAY, though paper filing remains available.

How often must employers pay South Carolina withholding tax?

Resident agents follow their federal payment frequency. Nonresident agents pay quarterly if they withhold under $500 per quarter and monthly if they withhold $500 or more. Payment timing is separate from return deadlines.

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