How to Choose a Payroll Company or PEO in South Carolina
Updated August 11, 2026 · 9 min read
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Key takeaways
- South Carolina taxes only the first $14,000 of each employee’s wages for unemployment, so a new employer pays $140 a year per person at the 1.0% rate.
- The state publishes a maximum annual cost per employee for all 20 rate classes. At the best rate it’s $8.40 a year.
- Every employee on your quarterly unemployment report needs an SOC occupation code attached, or the filing gets rejected.
Jump to: Your three options · What it costs · Doing it yourself · PEO rules · Filing and deadlines · FAQ
Payroll software, payroll services, and PEOs
South Carolina runs payroll through two agencies, on a graduated income tax that tops out at 6%, and there are no local payroll taxes anywhere in the state.
There are three kinds of companies to choose from, and what separates them is how much of the work they take on and whether they become a co-employer.
- Payroll software. You register with the Department of Revenue and the Department of Employment and Workforce, then run the system yourself. More on payroll and HR software
- A payroll service. Files under your own EIN and handles the state returns for you. More on payroll services
- A PEO. Reports your South Carolina wages under its own account and bundles benefits and workers’ comp with it. Requires co-employment. More on PEOs
Payroll and PEO companies based in South Carolina
A company based here files South Carolina returns every quarter and works the same SUITS portal you do.
| Organization | Type | Headquarters | Coverage | Description |
|---|---|---|---|---|
 | PEO | Greenville, South Carolina | 50 states | Full-service PEO providing payroll, benefits administration, and workers’ compensation to small and mid-sized employers. |
 | Payroll service | Columbia, South Carolina | SC, NC, GA | Regional payroll bureau handling processing, tax filing, and time tracking for multi-state employers. |
 | Software | Charleston, South Carolina | 50 states | Cloud payroll and HR platform covering onboarding, time tracking, and benefits enrollment. |
 | PEO | Mount Pleasant, South Carolina | 22 states | PEO offering co-employment, group health benefits, and HR compliance support across the Southeast. |
 | PEO | Fort Mill, South Carolina | 35 states | PEO serving small employers with bundled payroll, benefits, and risk management. |
 | Payroll service | Spartanburg, South Carolina | SC only | Payroll bureau focused on South Carolina employers, including quarterly SUITS wage reporting. |
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What South Carolina costs an employer in 2026
Unemployment tax applies to the first $14,000 of each employee’s wages, which is one of the lower wage bases in the country. A new employer pays 1.0%, so the tax works out to $140 a year for anyone earning past that cap.
The state holds you at the new employer rate until you’ve accomplished 12 months of liability, and then computes your rate from your own claims history at the next rate computation date.
There are no local payroll taxes anywhere in South Carolina.
The rate class table
South Carolina sorts employers into 20 rate classes by benefit ratio, and each class carries three separate pieces: a base rate tied to benefits paid, a solvency surcharge, and a contingency assessment of 0.060%.
For 2026 the state imposed no solvency surcharge at all, and rates run from 0.06% in class 1 to 5.46% in class 20. Any business with no benefit charges between July 1, 2022 and June 30, 2025 lands in class 1.
Rates have decreased or held flat for 12 years running, which the Department of Employment and Workforce puts at $355 million in cumulative reduction.
Maximum cost per employee
The published rate table carries a column most states leave out. Alongside each class, South Carolina states the maximum the tax can cost you per employee for the year.
At class 1 that ceiling is $8.40. At the new employer rate of 1.0% it’s $140. Because the wage base is fixed at $14,000, the number is a hard cap rather than an estimate.
| Item | 2026 figure |
|---|---|
| Unemployment taxable wage base | $14,000 |
| New employer rate | 1.0%, or the class 12 rate if that’s higher |
| Rate range across 20 classes | 0.06% to 5.46% |
| Contingency assessment | 0.060%, in every class |
| Solvency surcharge for 2026 | None |
| Maximum unemployment cost, class 1 | $8.40 per employee per year |
| Maximum unemployment cost, new employer | $140 per employee per year |
| Income tax | Graduated, topping out at 6% |
| State minimum wage | None. The federal $7.25 floor applies |
| Local payroll taxes | None |
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Can you run South Carolina payroll yourself?
Yes. South Carolina has no local taxes, no disability or paid leave programs, and a low wage base, so the tax side stays simple. Payroll software handles it for $6 to $25 per employee per month.
Find payroll software that fits your business
Since 2024, quarterly unemployment reports have to carry a Standard Occupational Classification code for every employee, along with hours worked and wages. Software that hasn’t added a field for it will produce a report the state rejects.
Plus, if you withhold $15,000 or more in a quarter or make 24 or more payments in a year, you have to file and pay electronically.
Full-service software files the WH-1605 and WH-1606 for you. You stay legally responsible for the taxes either way.
PEO rules specific to South Carolina
South Carolina licenses PEOs through the Department of Consumer Affairs under S.C. Code Ann. § 40-68-10 et seq. Most states park PEO oversight with a labor or insurance agency, so the filings and the complaint process both run through a consumer protection body here.
What a licensed PEO files
- A license valid for up to two years, renewed between August 1 and September 30 in odd-numbered years
- A quarterly financial attestation within 75 days of each quarter, on Form PEO-13, with a balance sheet and income statement attached
- Total gross South Carolina payroll for the quarter
- Updates to its client company list, ownership, controlling persons, and personnel subject to continuing education
Late filings
A quarterly report filed late without prior approval carries a fee of $150 for every 30 days or part of one. More than 60 days late and the licensee can face disciplinary action under § 40-68-160(C).
The Department of Consumer Affairs will confirm whether a PEO holds a current South Carolina license.
Unemployment reporting
South Carolina treats a PEO as an employing unit in its own right. The PEO registers as an employer with the Department of Employment and Workforce and adds client companies to its own account.
DEW sets two conditions for that treatment. The PEO has to pay your employees out of its own funds, and it has to be responsible for hiring and firing them in consultation with you.
DEW draws a separate category for a third party that files on your behalf without taking on those responsibilities. That arrangement is an agent, and your unemployment account stays in your own name.
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Registration, filing, and deadlines
You’ll register with two agencies. The Department of Revenue handles withholding through Form SCDOR-111, the Business Tax Application, while the Department of Employment and Workforce handles unemployment tax through SUITS or the paper Form UCE-151.
Anyone with employees performing work in South Carolina generally needs a withholding account, including remote and temporary staff.
A few things trigger a new withholding file number rather than an update. Changing ownership does it, and so does getting a new federal EIN. A change of address doesn’t.
Don’t forget the SC W-4. Anyone hired after December 31, 2019 has to submit one, and without it you withhold at zero allowances. If an employee claims 10 or more allowances, you send a copy to SCDOR within 30 days.
When your withholding payments are due
South Carolina splits this by where your business is based, which catches people out because most states go by how much you withhold.
If your principal place of business is in South Carolina, you pay withholding at the same time your federal payments are due, regardless of the state amount withheld. Your federal deposit schedule sets your state schedule.
If your principal place of business is outside South Carolina, you pay quarterly while your liability stays under $500 for the quarter, due the last day of the month after the quarter ends. Once withholding reaches $500 in a quarter, payment moves to the 15th of the following month.
Look up South Carolina’s withholding schedule anywhere else and you’ll find thresholds of $500 a quarter and $12,000 a year applied to everyone. SCDOR’s own guide sets it out the way described above.
| Requirement | Detail |
|---|---|
| WH-1605 | Quarterly withholding return, due the last day of the month after the quarter |
| WH-1606 | Fourth quarter and annual reconciliation |
| Electronic filing trigger | $15,000 or more withheld in a quarter, or 24 or more payments in a year |
| Zero-withholding quarters | A return is still required, or you get a Failure to File notice |
| Due dates | April 30, July 31, October 31, and January 31. A weekend or holiday pushes it to the next business day. |
| UCE-120 | Quarterly contribution and wage report to DEW |
| Charge statements | Issued quarterly, with 30 days to protest a charge |
| W-2s and 1099s | Due to SCDOR by January 31 |
SOC codes on the quarterly report
Under § 41-31-160, quarterly reports to the Department of Employment and Workforce have to include a Standard Occupational Classification code for every position, alongside employee names, social security numbers, hours worked, and wages.
Employers with 10 or more employees in South Carolina file that report electronically under § 41-35-615, unless a hardship exception applies. Under 10, paper is still allowed.
Workers’ compensation
Under § 42-1-150, the Workers’ Compensation Act covers all private employments where four or more employees are regularly employed in the same business. Full time, part time, and seasonal workers all count toward that number.
§ 42-1-360 carries the exemptions, and one of them works on payroll rather than headcount. An employer whose total annual payroll for the previous calendar year came in under $3,000 is exempt regardless of how many people it employed during that period.
Casual employees, agricultural employees, state and county fair associations, railroads, and railway express companies are also outside the Act. Agricultural employers can elect coverage voluntarily under § 42-1-380.
Contractors and subcontractors
Sections 42-1-400 through 42-1-420 run contractor liability upstream. An injured worker can seek workers’ compensation from their deemed employer as though they were an immediate employee of that company.
§ 42-1-450 lets an injured worker claim against the subcontractor instead of the principal contractor, though not against both.
When the Commission finds a coverage violation, the parties get an Order and Rule to Show Cause hearing before a Commissioner. Failing to appear after proper service counts as an admission of the allegations.
The maximum weekly compensation rate moved twice
The Workers’ Compensation Commission set the 2026 maximum weekly rate at $1,178.30 in a December 19, 2025 advisory, using an average weekly wage certified for April 2024 through March 2025.
A January 13, 2026 advisory superseded that order and set the rate at $1,189.94, using the July 2024 through June 2025 certification instead. The later figure is the one in effect.
Employees who live in South Carolina and work elsewhere
A South Carolina resident working in another state has tax withheld for that other state. If the state where they work has no income tax, you withhold for South Carolina instead, because that’s their state of legal residence.
S.C. Code § 12-8-2020 covers the correction process when withholding goes to the wrong state.
South Carolina payroll reference
Your unemployment rate
Rate notices go out in November, and the assigned tax class applies for the full calendar year. You can find your rate in SUITS, or reach the Department of Employment and Workforce rate line at 803-737-3080.
Withholding tables
SCDOR reissues Form WH-1603 every year, and the 2026 tables took effect January 1. The daily and weekly tables both top out with a flat 6% applied to the excess above the highest bracket.
One federal change South Carolina hasn’t adopted
The IRS moved certain businesses from quarterly to annual employment tax filing. SCDOR’s withholding guide states that South Carolina has not adopted that change, so the quarterly cadence still applies here.
Rates and deadlines are current as of August 2026 and change annually. Verify against the linked source before filing.
Frequently asked questions
- How much should a payroll service cost?
A payroll service generally runs $20 to $50 per employee per month, payroll software $6 to $25, and a PEO $40 to $150 or 3–12% of gross payroll. South Carolina has no local filings to price in, so quotes here are simpler to compare than in states with municipal taxes.
- How much is unemployment tax in South Carolina?
A new employer pays 1.0% on the first $14,000 of each employee’s wages, which comes to $140 a year per person. Experience-rated employers pay somewhere between 0.06% and 5.46% depending on their claims history, and the state publishes a maximum annual cost per employee for every rate class.
- What is the taxable wage base in South Carolina?
$14,000 for 2026. Wages above that are not subject to further unemployment tax for the year.
- Does South Carolina have a state minimum wage?
No. The federal floor of $7.25 an hour applies, and S.C. Code § 6-1-130 stops cities and counties from setting their own.
- What is an SOC code and why does South Carolina want one?
A Standard Occupational Classification code identifies the job an employee performs. Since 2024, § 41-31-160 requires one for every position on your quarterly unemployment report, alongside hours worked and wages. A report submitted without them gets rejected.
- When are South Carolina withholding payments due?
If your principal place of business is in South Carolina, you pay at the same time your federal payments are due, regardless of the state amount withheld. If your principal place of business is outside the state, you pay quarterly while your liability stays under $500 for the quarter, and monthly once it reaches $500.
- Who licenses PEOs in South Carolina?
The Department of Consumer Affairs, under S.C. Code Ann. § 40-68-10 et seq. Licenses run up to two years and renew between August 1 and September 30 in odd-numbered years.
- Who is the employer when using a PEO?
Both of you, in different senses. The PEO becomes the employer of record for tax and insurance purposes while you direct the work, set pay, and decide who gets hired. That arrangement is called co-employment.
- How many employees before I need workers’ compensation in South Carolina?
Four. Under § 42-1-150 the Workers’ Compensation Act covers private employments where four or more employees are regularly employed in the same business, counting full time, part time, and seasonal workers. An employer whose total annual payroll for the previous calendar year came in under $3,000 is exempt regardless of headcount.
- Is it cheaper to do your own payroll?
On direct cost, yes. Software at $6 to $25 per employee per month beats a service at $20 to $50. The comparison shifts once you count the hours and the penalty exposure.
- Can I do payroll without a payroll company?
Yes. South Carolina is one of the simpler states to run yourself, since there are no local taxes and the wage base is low. What you take on is the filing calendar and the liability that comes with missing it.
- Do I have to file electronically in South Carolina?
For withholding, yes, if you withhold $15,000 or more in a quarter or make 24 or more payments in a year. For unemployment reports, yes, if you have 10 or more employees in the state, unless a hardship exception applies.
- Do I still file if I withheld nothing this quarter?
Yes. An open withholding account means a return is due every quarter, and skipping it produces a Failure to File notice.
- What if my employee lives in South Carolina but works in another state?
They’ll have tax withheld for the state where they work. If that state has no income tax, you withhold for South Carolina, since that’s their state of legal residence.