Payroll and Benefits Guide United States – South Dakota

Last updated: Apr 04, 2023

United States Dollar (USD)
Employer Taxes
9.45%- 24.20%
Payroll Frequency
Monthly or semi-monthly
Employee Costs
Date Format
Fiscal Year
1 January- 31 December



Employer Payroll Contributions

0.00%-9.50% (maximum taxable wages is 15,000 USD) Unemployment Insurance (state)
1.20% for the first year, 1.00% for the second and third year (plus 0.55% investment fee) Unemployment- New Employer (state)
6.20% (maximum taxable wages is 147,000 USD) FICA Social Security (federal)
1.45% FICA Medicare (federal)
0.60% – 6.00% (maximum taxable wages is 7,000 USD) The FUTA (Federal Unemployment Tax Act) tax rate is 6.0% with a taxable wage base of 7,000 USD. However, if states operate their unemployment insurance programs in compliance with federal law then the FUTA tax is reduced (credit) by 5.4% to 0.6%.
9.45%- 24.20% Total Employment Cost


Employee Payroll Contributions

7.65% – 8.55% Total Employee Cost
6.20% (Maximum taxable wages is 147,000.00 USD) FICA Social Security (Federal)
1.45% FICA Medicare (Federal)
0.90% Additional tax on earnings over 200,000 USD (High-income earners also pay an additional 0.90% in Medicare taxes)


Employee Income Tax

No state income tax in South Dakota

Federal Employee Income Tax
Federal Tax – Singles
10.00% Up to 10,275 USD
12.00% 10,276 USD to 41,775 USD
22.00% 41,776 USD to 89.075 USD
24.00% 89,076 USD to 170,050 USD
32.00% 170,051 USD to 215,950 USD
35.00% 215,951 USD to 539,900 USD
37.00% 539,901 USD or more
Federal Tax – Married, filing jointly
10.00% Up to 20,550 USD
12.00% 20,551 USD to 83,550 USD
22.00% 83,551 USD to 178,150 USD
24.00% 178,151 USD to 340,100 USD
32.00% 340,101 USD to 431,900 USD
35.00% 431,901 USD to 647,850 USD
37.00% 647,851 USD or more
Federal Tax – Heads of Households
10.00% Up to 14,650 USD
12.00% 14,651 USD to 55,900 USD
22.00% 55,901 USD to 89,050 USD
24.00% 89,051 USD to 170,050 USD
32.00% 170,051 USD to 215,950 USD
35.00% 215,951 USD to 539,900 USD
37.00% 539,901 USD or more
Standard Deduction and Personal Exemption
12,950.00 USD Single
25,900.00 USD Married Filing Jointly
19,400.00 USD Head of Household

Minimum Wage


In South Dakota, the Minimum Wage is 10.80 USD per hour worked.


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


In South Dakota, the working week is a maximum of 40 hours per week, 8 hours per day.


South Dakota adheres to the Fair Labour 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.

Working Week



Paid Time Off

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

There are 11 official holidays.

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:

  • Twelve 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.
  • The employee may be entitled to leave for the adoption or foster care of a child and care for the newly placed child within one year of placement.
  • To care for the employee’s spouse, child, or parent who has a severe health condition.
  • 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.”


  • 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 is 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 necessary time off from work, 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.


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, pay out of unused vacation time is not required by law. Still, generally, employers will 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 Act) 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 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.



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 specialised 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 1 year and can be extended to a maximum of 3 years.
  • H-2B – for temporary non-agricultural work. These visas are limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
  • L – for intercompany transfers (people transferred from a foreign company to a US 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 specialised 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 US 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 employee 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 authorised to work in the United States.



South Dakota has a minimum combined Sales Tax Rate of 6.322% (state tax at 4.50% and local tax range from 0% -6.5%).

Stay up to date on payroll & employment law changes

Version History

February 16, 2022
VAT: South Dakota has a minimum combined 2022 Sales Tax Rate of 5.636% (State tax at 4.50% and Local tax range from 0% -6.5%).
The minimum wage increased to $9.95 USD per hour worked.
Payroll contributions and personal income tax rates have been updated.
January 1, 2021
Minimum wage: rose to $9.45 per hour.

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Payroll and Benefits Guide
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What’s covered in this guide:

  • Employer/employee contributions
  • Minimum wage
  • Working hours
  • Visa requirements

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Public Holidays Calendar

United States – South Dakota 2023
Day Date Holiday Notes
Sunday Jan-1 New Year's Day
Monday Jan-16 Martin Luther King Day
Monday Feb-20 President's Day
Monday May-29 Memorial Day
Monday Jun-19 Juneteenth Independence Day
Tuesday Jul-4 Independence Day July
Monday Sep-4 Labor Day
Monday Oct-9 Columbus Day
Friday Nov-10 Veteran's Day
Thursday Nov-23 Thanksgiving Day
Monday Dec-25 Christmas Day