Payroll and Benefits Guide United States – South Dakota
Last updated: Mar 03, 2026
Contribution
| Employer Payroll Contributions | |
| 0.0% – 9.35% | State Unemployment Insurance (SUI), applied on the first 15,000 USD of an employee’s wages for the calendar year.
The applied % varies based on the employer’s experience rating. |
| 1.2% – 1.5% | State Unemployment Insurance (SUI) – New Employer, applied on the first 15,000 USD of an employee’s wages for the calendar year. |
| 6.20% | Federal Insurance Contributions Act (FICA) - Social Security, applied on salary up to 176,100 USD per year. |
| 1.45% | Federal Insurance Contributions Act (FICA) – Medicare. An additional 0.9% should be withheld from employees earning above 200,000 USD per year. |
| 0.60% – 6.00% | Federal Unemployment Tax Act (FUTA), applied on salary up to 7,000 USD per year. Employers who pay their state unemployment tax in full and on time are eligible for a 5.4% tax credit, reducing the FUTA rate to 0.6%. |
| 9.45%- 24.50% | Total Employment Cost |
| Employee Payroll Contributions | |
| 6.20% | Federal Insurance Contributions Act (FICA) - Social Security, applied on salary up to 176,100 USD per year. |
| 1.45% | Federal Insurance Contributions Act (FICA) – Medicare.An additional 0.9% should be withheld from employees earning above 200,000 USD per year. |
| 7.65%-8.55% | Total Employee Cost |
| State Employee Income Tax | |
| No state income tax in South Dakota | |
| Federal Employee Income Tax | Annual |
| Federal Tax – Singles | |
| 10.00% | Up to 11,925 USD |
| 12.00% | 11,925 – 48,475 USD |
| 22.00% | 448,475 – 103,350 USD |
| 24.00% | 103,350 – 197,300 USD |
| 32.00% | 197,300 – 250,525 USD |
| 35.00% | 250,525 – 626,350 USD |
| 37.00% | Above 626,350 USD |
| Federal Tax – Married, Joint Filing | |
| 0.00% | Up to 23,850 USD |
| 12.00% | 23,850 – 96,950 USD |
| 22.00% | 96,950 – 206,700 USD |
| 24.00% | 206,700 – 394,600 USD |
| 32.00% | 394,600 – 501,050 USD |
| 35.00% | 501,050 – 751,600 USD |
| 37.00% | Above 751,600 USD |
| Federal Tax – Heads of Households | |
| 10.00% | Up to 17,000 USD |
| 12.00% | 17,000 – 64,850 USD |
| 22.00% | 64,850 – 103,350 USD |
| 24.00% | 103,350 – 197,300 USD |
| 32.00% | 197,300 – 250,500 USD |
| 35.00% | 250,500 – 626,350 USD |
| 37.00% | Above 626,350 USD |
| Standard Deduction and Personal Exemption | |
| 15,000 USD | Single |
| 30,000 USD | Married Filing Jointly |
| 22,500 USD | Head of Household |
Minimum Wage
General
In South Dakota, the State minimum wage is 11.50 USD per hour.
The Federal minimum wage rate is 7.25 USD per hour.
Payroll
Payroll Cycle
In South Dakota, employees are paid monthly or semi-monthly.
13th Salary
There is no legislation for 13th-month payments in South Dakota.
Working Hours
General
In South Dakota, the working week is a maximum of 40 hours per week, eight hours per day.
Overtime
South Dakota adheres to the Fair Labor Standards Act (FLSA), and work in excess of 40 hours per week is considered overtime and paid at the rate of 150% of the regular pay.
If employees are scheduled to work on weekends or rest days, no additional payment is required.
However, should an employer request an employee to work in exceptional circumstances on these days, then overtime is paid at the rate of 150% of the regular pay.
Leave
Annual Leave (vacation)
South Dakota does not have any state statute governing the amount and payment of vacation time; however, it is common for employers to decide whether to offer paid or unpaid vacation leave.
This must comply with employment law and must be stipulated in the collective bargaining agreements.
Public Holidays
Public holidays are not mandatory to give as paid days off, however, it is very common to allow workers to take federal holidays as paid days off.
Some companies might also agree to allow workers to take off state holidays. Workers can find the specific state holiday dates from their local government.
Usually when an agreed public holiday falls on a weekend, a day off in lieu is given on the Friday before or the Monday after the holiday.
| Date | Day | Holiday | Note |
|---|---|---|---|
| January 1, 2026 | Thursday | New Year’s Day | |
| January 19, 2026 | Monday | Martin Luther King, Jr. Day | |
| February 16, 2026 | Monday | Presidents’ Day | |
| May 25, 2026 | Monday | Memorial Day | |
| June 19, 2026 | Friday | Juneteenth | |
| July 3, 2026 | Friday | Independence Day (Observed)* | |
| September 7, 2026 | Monday | Labor Day | |
| October 12, 2026 | Monday | Native Americans’ Day | |
| November 11, 2026 | Wednesday | Veterans Day | |
| November 26, 2026 | Thursday | Thanksgiving Day | |
| December 25, 2026 | Friday | Christmas Day |
Sick Days
It is common for an employer to follow the Family and Medical Leave Act (FMLA) which provides certain employees with up to 12 weeks of unpaid, job-protected leave per year for certain family and medical reasons (maternity leave, serious illnesses or if the employee needs to care for a spouse or child).
Employees are eligible for FMLA if they have worked for their employer for at least one year, completed a minimum of 1,250 hours over the past year, and worked at a location where the company employs 50 or more employees within 75 miles.
FMLA eligible employees are entitled to:
- 12 working weeks of leave in any one year for a child’s birth and to care for the newborn child within one year of birth.
- Leave for the adoption or foster care of a child and care for the newly placed child within one year of placement.
- Care for the employee’s spouse, child, or parent who has a severe health condition.
- Leave in the event of a serious health condition that makes the employee unable to perform the essential functions of their job.
- Any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty.”
OR
- Twenty-six working weeks of leave during a single one-year period to care for a covered servicemember with a serious injury or illness if the eligible employee is the service member’s spouse, son, daughter, parent, or next of kin (military caregiver leave).
Maternity Leave
In addition to the Family and Medical Leave Act (FMLA) (see Sick Leave above) and the Pregnancy Discrimination Act, South Dakota has its own law against discrimination.
This law requires employers with six or more employees to provide employees with leave due to disabilities related to pregnancy or childbirth for the duration of such disability (pregnancy and childbirth are treated as any other type of temporary disability for all employment-related purposes, including benefits such as receipt of fringe benefits).
An employer must reinstate employees to their previous or comparable position upon their return.
Paternity Leave
See Sick Leave above.
Parental Leave
See Sick Leave above.
Other Leave
Jury Duty – South Dakota law states that an employer may not terminate or threaten to terminate an employee for serving as a juror or prospective juror.
An employee cannot be required to use any other type of leave to cover any leave needed for jury duty.
Employees must provide a copy of the jury summons to the employer as evidence of requirement.
Voting Leave – South Dakota law states that all employees registered to vote must be allowed to take up to two hours of paid leave to vote in any municipal, county, state, or federal primary or general election.
Employees must provide reasonable notice to their employers to take time off to vote.
In addition to the federal law USERRA, South Dakota law provides protection against discrimination for members of U.S. armed forces, reserves, National Guard, commissioned corps of the Public Health Service, and any other category of persons designated by the president in a time of war or emergency.
Reemployment in a former or a similar position regarding seniority, status, pay, and other employment benefits may be offered by an employer.
PAID MATERNITY LEAVE (DAYS)
Termination
Termination Process
Except in mass dismissals or as provided for in an employment contract or a collective bargaining agreement, U.S. law does not impose a formal notice period to terminate an individual employment relationship, and employment is stipulated at will.
This means that either the employer or the employee may end the employment relationship without giving either notice or reason, provided it is not illegal, notable discrimination on the grounds of a category protected by law, etc., and as per the Federal Worker Adjustment and Retraining Notification Act (WARN).
The employment contracts of executives and other highly skilled individuals often incorporate a just cause termination clause which mandates that the employer may only terminate the employee for cause and lists the permissible grounds.
In such cases, the parties negotiate the foundations for a just cause termination case by case.
Notice Period
In South Dakota, most employees are employed at will and either party can terminate the employment relationship without notice. In South Dakota, payout of unused vacation time is not required by law.
Still, employers will generally pay an employee for unused vacation days provided the employee gave some advanced notice of resignation.
There is no official notice period. Still, in general practice, two weeks’ notice is a minimum requirement.
In mass dismissal cases, the Worker Adjustment and Retraining Notification Act (WARN) must be followed, and employers must give 60 days’ notice to impacted employees.
Severance Pay
Except as otherwise provided in an employment contract or collective bargaining agreement, employers need not make severance payments to terminated employees. Employers who choose to offer severance would need to have the provisions within the employee’s contract and agreed upon by both parties.
Many employers choose to offer severance payment linked to the employee’s length of service.
If the employer terminates the contract, the final payment must be made to the employee within three working days after the termination.
If the employee terminates the contract, the employer will make the final payment per the agreement in the contract—usually the next regular payday.
Probation Period
No legal provision governs a formal “trial /probation period.” However, it is common practice for employers to set a performance evaluation after an initially stated period of employment of 90 days.
Minimal Statutory Termination Costs
Some states require PTO balances to be paid out during termination, also any bonuses or commissions that were promised in the employment contract
Immigration
Foreign nationals without permanent resident status or a work visa are not permitted to work in the United States.
An employer seeking to hire a foreign national may file a petition with the United States Department of Homeland Security/United States Citizenship and Immigration Services (USCIS) for an employment visa on behalf of the prospective employee.
If the petition is approved, the prospective employee must obtain a visa stamp from a United States embassy or consulate (Canadian citizens are exempt from this requirement).
To get a temporary U.S. work visa, an employer must file a petition with U.S. Citizenship and Immigration Services (USCIS). An approved petition must be part of the visa request. The types of visas include:
- H-1B – For applicants with a college degree hired to do specialized work. The visa is valid for three years and can be extended for an additional three years. The visa is connected to the employer that filed the petition. If there is a change of employer, the new employer must repeat the process. There are 65,000 H-1B visas available each year.
- H-1B1 – For applicants with a college degree from Chile and Singapore. The US government grants up to 1,400 visas to Chilean citizens and 5,400 from Singapore each year.
- H-2A – For temporary or seasonal agriculture work. It is limited to citizens of qualified countries. Usually valid for up to one year and can be extended to a maximum of three years.
- H-2B – For temporary non-agricultural work. These visas are limited to citizens of qualified countries. Usually valid for up to one year and can be extended to a maximum of three years.
- L – For intercompany transfers (people transferred from a foreign company to a U.S. branch of the company.) The applicant must have been employed at the company for a year before the transfer and work in a managerial-level position or higher with specialized knowledge.
- 0 – For people with extraordinary ability in science, arts, education, business, or athletics.
The standard procedure is to obtain a short-term work visa and then apply for an immigrant visa after the employee has started working in the United States.
For those seeking employment-based immigrant visas:
- E-1 – Highest priority employment for those with extraordinary ability in science, arts, education, business, and athletics.
- E-2 – For those with advanced degrees or exceptional ability.
- E-3 – For skilled workers and professionals, as well as unskilled workers.
- E-4 – Members of certain immigrant groups.
- E-5 – Immigrant investors in U.S. companies (substantial investment).
Alternatively, an employer may sponsor a potential employee’s application for permanent resident status, referred to as a green card, if the employer can establish that the potential employee is a multinational executive/manager transferee, has unique skills, or has been offered a job in the United States.
The employer must have been unable to recruit a U.S. worker who meets the position’s minimum requirements.
All employers are obligated to verify that all individuals they employ are authorized to work in the United States.
VAT
General
South Dakota has a State sales tax rate of 4.2%. Some areas apply an additional Local sales tax up to a rate of 4.5%.
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The minimum wage increased to $9.95 USD per hour worked.
Payroll contributions and personal income tax rates have been updated.
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Payroll and Benefits Guide
in United States – South Dakota
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Date | Day | Holiday | Note |
|---|---|---|---|
| January 1, 2026 | Thursday | New Year’s Day | |
| January 19, 2026 | Monday | Martin Luther King, Jr. Day | |
| February 16, 2026 | Monday | Presidents’ Day | |
| May 25, 2026 | Monday | Memorial Day | |
| June 19, 2026 | Friday | Juneteenth | |
| July 3, 2026 | Friday | Independence Day (Observed)* | |
| September 7, 2026 | Monday | Labor Day | |
| October 12, 2026 | Monday | Native Americans’ Day | |
| November 11, 2026 | Wednesday | Veterans Day | |
| November 26, 2026 | Thursday | Thanksgiving Day | |
| December 25, 2026 | Friday | Christmas Day |
Questions & Answers