South Carolina Salary Paycheck Calculator

South Carolina Taxes: What You Need to Know

South Carolina’s income tax system underwent its most significant overhaul in decades for 2026. Governor Henry McMaster signed H. 4216 into law on March 30, 2026, replacing the state’s three-bracket progressive system with a simplified two-rate structure effective Tax Year 2026. This is the single biggest change South Carolina employees and HR professionals need to understand for payroll in 2026.

Source: SCDOR — Information about H. 4216

An overview: South Carolina Taxes

The withholdings of the State Includes:

1. Federal, State, and Local Tax Withholding

In South Carolina, your paycheck will have both federal and state income tax deductions. Under the new law (H. 4216), the state now has a two-rate income tax structure 1.99% on taxable income up to $30,000 and 5.21% on income above $30,000. There are no local income taxes in South Carolina.

Source: SCDOR — Information about H. 4216

Source: SC Governor’s Office — McMaster Signs Income Tax Bill

Federal Tax Withholding

South Carolina employers also withhold federal income tax based on the IRS’s 2026 rate schedule. The federal system uses seven brackets ranging from 10% to 37%. These rates were made permanent by the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, eliminating prior uncertainty about rate changes.

Source: IRS — Revenue Procedure 2025-32 (2026 Tax Rate Tables)

2026 Federal Income Tax Brackets — Single Filers:

• 10% on income up to $12,400

Source: IRS Revenue Procedure 2025-32

• 12% on income from $12,401 to $50,400

Source: IRS Revenue Procedure 2025-32

• 22% on income from $50,401 to $105,700

Source: IRS Revenue Procedure 2025-32

• 24% on income from $105,701 to $200,750

Source: IRS Revenue Procedure 2025-32

• 32% on income from $200,751 to $254,200

Source: IRS Revenue Procedure 2025-32

• 35% on income from $254,201 to $640,600

Source: IRS Revenue Procedure 2025-32

• 37% on income over $640,600

Source: IRS Revenue Procedure 2025-32

South Carolina State Tax Withholding — Major 2026 Update

Effective Tax Year 2026, H. 4216 restructures South Carolina’s income tax. The new law decouples South Carolina from federal standard and itemized deductions. Federal Adjusted Gross Income (AGI), not federal taxable income is now the starting point for the South Carolina return. This is a fundamental change from prior years.

Source: SCDOR — Information about H. 4216

The new 2026 South Carolina Individual Income Tax rates:

• 1.99% on taxable income up to $30,000

Source: SCDOR — Information about H. 4216

• 5.21% on taxable income above $30,000, minus $966

Source: SCDOR — Information about H. 4216

The “minus $966” figure for the upper bracket is a tax computation adjustment, it reflects the fact that the first $30,000 is taxed at only 1.99%, so filers in the upper bracket do not pay 5.21% on their full income, only on the portion above $30,000. This is how the two-tier structure is operationalized.

South Carolina Income Adjusted Deduction (SCIAD)

In place of the federal standard deduction, H. 4216 creates a new South Carolina Income Adjusted Deduction (SCIAD). This deduction reduces taxable AGI for lower-to-middle income filers and phases out as income rises. The SCIAD amounts under the enacted law are:

• Single / Married Filing Separately: $15,000 (phases out as AGI exceeds $40,000, fully eliminated at $95,000)

Source: SC Legislature — H. 4216 Enacted Text

• Head of Household: $22,500 (phases out as AGI exceeds $60,000, fully eliminated at $142,500)

Source: SC Legislature — H. 4216 Enacted Text

• Married Filing Jointly / Surviving Spouse: $30,000 (phases out as AGI exceeds $40,000, fully eliminated at $95,000)

Source: SC Legislature — H. 4216 Enacted Text

Practical implication for HR professionals: Employees earning under $95,000 (single filers) or under $95,000 (joint filers) will benefit from the SCIAD reducing their state taxable income. Employees earning above these thresholds receive no SCIAD benefit and pay the flat two-rate structure on their full AGI, minus any other remaining South Carolina deductions and exemptions they qualify for.

Future Rate Reductions

Beginning in Tax Year 2027, if the South Carolina Board of Economic Advisors (BEA) projects individual income tax revenue growth of at least 5% over the prior fiscal year, the top rate will be automatically reduced. Each reduction cannot decrease revenue by more than $200 million. The BEA will announce its determination by February 15 of each year. South Carolina’s path is set toward eventually eliminating the personal income tax.

Source: SCDOR — Information about H. 4216

Local Taxes

South Carolina does not impose any local income tax. Employees across all counties and municipalities from Charleston to Greenville to Columbia see only federal and state income tax withheld from their paychecks. There is no city, county, or municipality-level income tax to configure in payroll.

South Carolina’s state sales tax rate is 6%. Local jurisdictions may impose additional sales taxes, leading to a combined state and local average of approximately 7.49%. The local rate can reach as high as 3%, depending on the county.

Source: SCDOR — Sales Tax

Source: Tax Foundation — South Carolina Tax Rates

2026 SC Withholding Tables and W-4

The SCDOR published updated 2026 Withholding Tax Tables effective January 1, 2026. With H. 4216 now enacted (retroactive to Tax Year 2026), the SCDOR will publish revised withholding tables reflecting the new rates. Employers should monitor dor.sc.gov/withholding for updated tables. All employees should complete a new SC W-4 to ensure accurate withholding under the new rate structure.

Source: SCDOR — South Carolina Withholding Tables Updated for 2026

Source: SCDOR — Withholding Tax

2. FICA & State Insurance Taxes

FICA taxes include Social Security and Medicare and are mandatory for all South Carolina employees. The combined FICA rate is 7.65% for employees and an equal 7.65% employer match.

Social Security Tax:

• Rate: 6.2% on wages up to the 2026 wage base of $184,500

Source: SSA — Maximum Taxable Earnings 2026

• Maximum employee Social Security contribution in 2026: $11,439 (6.2% × $184,500)

Source: IRS Publication 926 — Household Employer’s Tax Guide 2026

• The wage base increased from $176,100 in 2025 to $184,500 in 2026, employers should update payroll systems accordingly

Source: SSA 2026 COLA Fact Sheet

Medicare Tax:

• Rate: 1.45% on all wages, no wage base cap

Source: IRS Topic 751 — Social Security and Medicare Withholding Rates

• Additional Medicare Tax: 0.9% on wages exceeding $200,000 per employee per calendar year, bringing the effective Medicare rate to 2.35% above that threshold

Source: IRS Topic 751 — Social Security and Medicare Withholding Rates

Employers match 6.2% Social Security and 1.45% Medicare for every employee. There is no employer match on the additional 0.9% Medicare surcharge. Employers must begin withholding the additional 0.9% once any individual employee’s wages cross $200,000 in a calendar year, regardless of that employee’s filing status.

Source: IRS Topic 751 — Social Security and Medicare Withholding Rates

State insurance taxes may also include unemployment insurance and workers’ compensation. South Carolina unemployment insurance rates vary based on employer experience rating and are administered by the SC Department of Employment and Workforce.

3. Pre-Tax Deductions (Medical Insurance, 401(k), etc.)

Pre-tax deductions reduce your taxable income. Because South Carolina’s new tax structure now starts from federal AGI, pre-tax payroll deductions, such as 401(k) contributions and health insurance premiums, reduce the base used for both federal and South Carolina state taxes simultaneously. Other pre-tax deductions include:

Medical Insurance

Premiums for employer-sponsored health plans are deducted from gross wages before federal, South Carolina state, Social Security, and Medicare taxes are all calculated. There is no dollar cap on pre-tax health premium deductions. This remains fully effective under the new H. 4216 structure, since South Carolina now starts from federal AGI, health premiums that reduce federal AGI also reduce the South Carolina taxable base.

401(k) Contributions

The IRS increased the 401(k) elective deferral limit for 2026. Employees may contribute up to $24,500 up from $23,500 in 2025. Catch-up contributions for employees aged 50–59 and 64+ are $8,000, and for employees aged 60–63 under SECURE 2.0, the enhanced catch-up limit is $11,250.

Source: IRS IR-2025-111 — 401(k) Limit Increases to $24,500 for 2026

Health Savings Accounts (HSA)

For employees enrolled in qualifying High-Deductible Health Plans (HDHPs), HSA contributions are pre-tax with no FICA deduction either. The 2026 limits are:

• Self-only HDHP coverage: $4,400 (up from $4,300 in 2025)

Source: IRS IRB 2025-21 — HSA Contribution Limits 2026

• Family HDHP coverage: $8,750 (up from $8,550 in 2025)

Source: IRS IRB 2025-21 — HSA Contribution Limits 2026

• Age 55+ catch-up: additional $1,000

Source: IRS Publication 969 — Health Savings Accounts

2026 OBBBA expansion: Bronze and catastrophic ACA exchange plans now qualify as HDHP-compatible for HSA contributions starting January 1, 2026, expanding access to HSAs for more South Carolina employees.

Source: IRS Notice 2026-05 — HSA Guidance under OBBBA

The health FSA contribution limit for 2026 is $3,400 (up from $3,300 in 2025). The maximum carryover amount for plans allowing carryover is $680 (up from $660).

Source: IRS IR-2025-103 — 2026 Inflation Adjustments (FSA)

Tax Percentage Table

Median Household Income in South Carolina

According to the U.S. Census Bureau (via FRED, Federal Reserve Bank of St. Louis), the median household income in South Carolina was approximately $76,780 in 2024, the most recent annual figure available. This represents continued growth from prior years.

Source: U.S. Census Bureau / FRED — Median Household Income in South Carolina

Source: U.S. Census Bureau / FRED — Median Household Income in South Carolina

Source: USAFacts — Household Income in South Carolina 2024

At a $76,780 median household income, the practical impact of H. 4216 is meaningful for the typical South Carolina household. Under the new structure, a single filer earning $76,780 would pay 1.99% on the first $30,000 and 5.21% on the remaining $46,780 (after any applicable SCIAD deduction). This compares favorably to the prior top rate of 6.0% that applied above $17,830.

Source: SCDOR — Information about H. 4216

South Carolina Tax Brackets 2026

South Carolina’s tax system includes several components that affect individuals and businesses. Here is a detailed look at the key aspects under the 2026 structure:

Income Tax

South Carolina now has a two-rate individual income tax for 2026, replacing the old three-bracket system (0%, 3%, 6%). The new rates apply to all filing statuses —single, married filing jointly, married filing separately, head of household:

Source: SCDOR — Information about H. 4216

Source: SCDOR — Information about H. 4216 (Signed March 30, 2026)

Source: SC Governor’s Office — McMaster Signs Income Tax Bill

South Carolina Income Adjusted Deduction (SCIAD) — 2026:

Source: SC Legislature — H. 4216 Enacted Text (scstatehouse.gov)

Additionally, all other existing South Carolina deductions, exemptions, adjustments, and tax credits are retained under H. 4216. The South Carolina dependent exemption remains in effect. The state Earned Income Tax Credit (EITC), however, is now capped at $200 per return under the new law.

Source: SC Legislature — H. 4216 Enacted Text

Sales Tax

South Carolina’s state sales tax rate is 6%. Local jurisdictions can impose additional sales taxes, leading to a combined state and local average of approximately 7.49%. The maximum combined rate can reach 9% in certain localities. Groceries (unprepared food) are generally exempt from the state sales tax.

Source: SCDOR — Sales Tax

Source: Tax Foundation — South Carolina Tax Profile

Corporate Income Tax

The state imposes a flat corporate income tax rate of 5% on net income apportioned to South Carolina (Form SC1120). A corporate license fee of 0.1% of capital stock and paid-in surplus applies annually, with a minimum of $15.

Source: SCDOR — Business Income Taxes: Corporate

Source: Tax Foundation — State Corporate Income Tax Rates 2026

Property Tax

Property taxes in South Carolina are assessed and collected at the local level. The state does not impose a property tax. The average effective property tax rate in South Carolina is approximately 0.49% of a home’s assessed value — one of the lowest in the nation. Rates vary by county, ranging from 0.36% in Calhoun County to 0.71% in Bamberg County.

Source: Tax Foundation — South Carolina Tax Profile

Complete 2026 South Carolina Individual Income Tax Brackets — All Filing Statuses

Source: SCDOR — Information about H. 4216

Source: SC Governor’s Office — McMaster Signs Income Tax Bill (April 2026)

Note: Standard deduction and SCIAD under H. 4216 (effective Tax Year 2026):

• No federal standard or itemized deduction is used — South Carolina now starts from federal AGI

Source: SCDOR — Information about H. 4216

• SCIAD of $15,000 for single filers (phases out above $40,000 AGI)

Source: SC Legislature — H. 4216 Enacted Text

• SCIAD of $30,000 for married filing jointly (phases out above $40,000 AGI)

Source: SC Legislature — H. 4216 Enacted Text

• Dependent exemption: retained under the new law — existing SC exemption still applies

Source: SC Legislature — H. 4216 Enacted Text

• Personal exemption: South Carolina does not have a personal exemption