Paycheck Calculator South Dakota - SD

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South Dakota - SD Paycheck Calculator: Hourly and Salary

South Dakota, a state with a vibrant cultural environment, unspoiled natural beauties, flourishing economy, business-friendly environment, and booming job careers. It is located in the Midwestern region of the United States, with an abundance of wildlife and world-famous black hills.

The Mount Rushmore State (nickname of South Dakota) is fifth smallest by population and 5th least densely populated. Still, the seventeenth-largest by area among the 50 states of U.S. It is bordered by the State of Minnesota (to the east), Wyoming (to the west), North Dakota (to the north), Nebraska (to the south), Montana (to the northwest) and Iowa (to the southeast).

Moreover, the Sioux Falls metropolitan area is the largest metro of the State. Besides, Sioux Falls is the largest city, and Pierre is the state's capital.

So are you looking for some solid reasons for why relocating to South Dakota would be your smart move? Then this guide is just for you. You travel experts have collaborated with finance experts to bring you a one-of-its-kind guide that covers the following topics:

  • The thing you must know before moving to South Dakota
  • South Dakota Payroll Facts
  • How to Calculate Paycheck in South Dakota? – This section would benefit both employers and employees in the following ways:
    • Help job seekers to compare several job offers in terms of take-home pay and choose the best one.
    • Help entrepreneurs to compare different business opportunities in terms of employment cost.
    • Help employees of South Dakota to calculate their upcoming Paycheck amount for verifying and budgeting.
    • Help employers in South Dakota to calculate Paycheck amounts for multiple employees instantly using our South Dakota Paycheck Calculator.
  • Federal and South Dakota Payroll Laws to ensure your paycheck complies with the law.
  • Frequently Asked Questions

We are hopeful that these topics would answer most of your queries regarding moving to South Dakota and Paycheck calculations. So let's get started!


Things You Must Know Before Moving To South Dakota

Moving from town to town or one state to another could be your life-changing decision. Therefore, you must work on every possible outcome of your decision before implementing it. Here are the factors you must be aware of regarding South Dakota, before relocating:

Cost of Living

Living in South Dakota would cost you lower than most of the US states, as the cost of living index in SD is 88.3, while the national index is 100 points. Housing followed by transportation cost contributes the most to the overall low cost of living. In contrast, factors like grocery, health, utilities, and miscellaneous expenses are almost near to the national average.

Cost of Housing

Housing is relatively affordable in South Dakota than the rest of the states. It secures the 9th position among 50 states for housing affordability, by US News. The median home value in the state is $193,700, which is significantly lower than the national median home value of $231,200. On the other hand, you also have an option to rent a house, for which a median rent price in the state is $1,080.

Education

South Dakota has a thriving education system of private and public schools, colleges, and universities to secure the bright future of your kids. Sioux Falls is known as the number one city for college graduates. Some of the well-reputed educational institutes include Northern State University, Dakota State University, South Dakota State University, and the University of South Dakota.

Weather

There is a continental climate in South Dakota, with four distinctive seasons. The seasons range from hot and semi-humid summers to cold, dry winters. Moreover, the state also experiences frequent thunderstorms with high winds, thunder, and hail as well as tornados (mostly in the eastern part of the state) in summers. Whereas, severe ice storms and blizzards also occur often during winter.

Business and Job Opportunities

South Dakota has a flourishing economy with a favorable business environment and thriving job opportunities. The economy is primarily based on agriculture, tourism, financial services, and manufacturing. Besides, professional, biotech, and technical services opportunities are also growing.

The state enjoys a 9th position for landing your dream job (according to CNBC 2019). Moreover, the unemployment rate in SD is 3.4%, which is significantly lower than the national average. The fastest-growing job here includes Account/Finance, industrial mechanics, Specialty Trades, field service technicians, and Nurses.

On the other hand, if you are planning to be your own boss, South Dakota secures the first position for best state for starting a business (according to CNN Money), as well as a first spot for the business climate in the nation for entrepreneurs (according to Small Business and Entrepreneurship Council). Fortunately, the state levies no corporate income tax or business inventory tax, making South Dakota to be your next stepping stone for success.

Outdoor Activities

Life is boring without outdoor fun. Wherefore, you can spend your holidays and vacations with your friends and family by exploring must-see places in South Dakota, such as Deadwood: A National Historic Landmark, Custer State Park, Mount Rushmore National Memorial, Badlands National Park, and Sturgis Motorcycle Rally.


Pros and Cons

Here is a quick roundup for all the goods and bads about relocating to South Dakota:

Pros:
  • Flourishing Economy
  • Lower unemployment rate
  • Good job opportunities
  • Favorable conditions for the entrepreneur
  • Sparse population
  • No state income tax
  • Better Education
  • Big City with a small-town vibe
  • Low cost of living and housing
Cons:
  • Severe summers and winters
  • Relatively lower median household income

South Dakota Payroll Facts

  • Employers of South Dakota withhold Federal Income Tax from employee's paycheck at the rate ranging between 0% and 37% according to seven tax brackets dependent on filing status and income level.
  • Both employers and employees also pay FICA Taxes which comprises of Medicare and Social Security Tax. Employees pay 1.45% of Medicare tax on their taxable wages up until $200,000 for 2020. However, if their earning exceeds $200,000, they are charged with Additional Medicare surtax of 0.9%. Employees also pay 6.2% of Social Security tax taxable wages up until $137,700 for 2020. Moreover, employers pay a matching amount of FICA taxes for each of their employees.
  • Employers of South Dakota pay FUTA tax at the rate of 6% of each employee's first $7,000 of taxable income. Moreover, they also pay State Unemployment Insurance (SUI) tax, which is charged at the rate ranging from 0% to 9.5% on the first taxable wage of $15,000 paid to each employee in a calendar year. However, if SUI tax is paid in full and on time, they get a tax credit of up to 90% for FUTA tax.
  • South Dakota doesn't levy State Income tax as well as local income tax on its residents.
  • The federal minimum wage rate is $7.25 for non-exempted employees. However, the State Minimum wage rate is $9.30. The Cash Minimum wage rate for tipped employees is $4.65, with a maximum tip credit of $4.65.
  • Non-exempted employees in South Dakota receive overtime at one and half of their regular hourly rate for each excess hours after 40 hours in a workweek, according to FLSA law.
  • South Dakota doesn't have a reciprocal agreement with any state, so non-residents working in SD are required to pay income taxes here.
  • The livable wage for a working adult in South Dakota is $10.60, and for a couple (one working) with two children is $24.20, according to the Massachusetts Institute of Technology.
  • Average Annual Salary in South Dakota is $62,811, whereas the national average is $66,289.
  • The median household income for South Dakota residents is $56,499, (as reported by U.S. Census Bureau).

How to Calculate Paycheck in Rhode Island?

As we are done with relocation to South Dakota and its payroll facts, now it's time to calculate paycheck.


Step 1 - Calculating Gross Pay:

The very first step to calculating the paycheck amount is to determine Gross Pay. It is a wage that an employee earned in the last pay period.

Gross Pay is calculated differently for both hourly and salary-based employees, which is discussed in detail as follow:


Gross Pay for Hourly Employee

Hourly Employees are paid at a mutually agreed pay rate for each hour they work in a pay period. Usually, Pay periods for Hourly employees are Hourly, Daily, Weekly, and Bi-Weekly. However, the Federal, State, and Local Wage law requires the employers to set the pay rate equals to or more than the defined Minimum Wage Law for the non-exempted employees.

Hourly employees are also entitled to receive overtime, for each excess hour worked after regular hours in a workday or a workweek. Remember, like Minimum wage, the employers are also required to follow Overtime wage law provided by the federal, state, and local authorities.


Note: All the relevant laws are discussed in detail ahead.

To calculate gross wage for an hourly employee:

  1. Calculate total hours worked in a Pay Period using the data from Timesheet or Timecard.
  2. Multiply Total Hours worked with the Hourly Rate (Pay Rate).
  3. Add overtime hours (if any) worked by the employee.

Quick Tip: You can also use our Timecard with overtime Calculator to calculate Gross Wage for Hourly Employee instantly.

Gross Pay for Salaried Employee

Salaried Employees are paid at the flat amount rather than on an hourly basis. The amount is usually mutually agreed as an Annual Salary, which is then paid in Semi-monthly or Monthly Pay periods.

Salaried employees are mostly exempted from overtime law. However, their salaries must be according to Federal and State Minimum Wage law.

To calculate Gross Pay for Salaried Employees:

  • Divide the "employee's salary" by "number of pay periods." For example: If the employee's annual salary is $25000 and is paid on a semi-monthly pay period, then the employee's Gross Pay would be: $25000 / 24 = $1042.

Don't forget that Supplemental Wages like Bonuses, commissions, tips, paid leaves, fringe benefits, or other taxable wages earned by the employee must be added into the Gross wages.


Step 2 – Subtracting Pre-Tax Deductions (If Any):

Once you are done with Gross Wages, it's time to subtract any Pre-Tax deductions from the gross wage to get taxable wages as Pre-tax deductions are not taxable for federal payroll taxes.

Pre-tax deductions are offered to the employees as benefits like fringe benefits, HSA plans, etc., to reduce their taxable income, hence, increasing their take-home pay amount. Remember, not all benefits are exempted from taxes, so choose the pre-tax deductions wisely.

Some of the common pre-tax deductible benefits are:

  • FSA - Flexible Spending Accounts
  • HSA - Health Savings Accounts
  • Retirement savings accounts like a traditional 401(k)
  • Some of the Fringe Benefits
  • health insurance
  • accident insurance
  • dental and vision insurance
  • Commuter Benefits
  • Short-Term Disability

Note: Pre-Tax deduction rate, contribution limits, special tax withholding rules change from year to year, according to inflation and costs of living by the federal government. Therefore, you must keep yourself updated with all rates before making any deductions.

Many Taxpayers find it hard to itemize their deductions to calculate taxable wages, for which they go for standard deductions, that varies according to the filing status, as shown in the table below:

All Filers(Updated Dec 2019)
Filing Status Standard Deduction Amount
Single Filers $12,200
Married, Filing Jointly $24,400
Married, Filing Separately $12,200
Head of Household $18,350

Step 3 – Calculate and Subtract Federal Taxes:

Once you have determined the taxable wages, it's time to deduct Federal Income taxes for the Taxable wages.

IRS requires the employers to withhold federal income tax from the employee's paycheck, according to the details provided by the employee on Form W-4. The employee fills this form at the start of the job. The form includes all the necessary information, including income, number of allowances to claim, number of dependents, amount of additional taxes to deduct, and much more.

The employees are required to keep their Form W-4 up to date with all their current information, especially marriage, divorce, or child's birth.

The federal income tax is charged according to the tax brackets in which the taxpayer's income falls. The latest income tax brackets and rates are as follow:

Single Filers
Taxable Income Rate
$0 - $9,700 10%
$9,700 - $39,475 12%
$39,475 - $84,200 22%
$84,200 - $160,725 24%
$160,725 - $204,100 32%
$204,100 - $510,300 35%
$510,300+ 37%

Married, Filing Jointly
Taxable Income Rate
$0 - $19,400 10%
$19,400 - $78,950 12%
$78,950 - $168,400 22%
$168,400 - $321,450 24%
$321,450 - $408,200 32%
$408,200 - $612,350 35%
$612,350+ 37%

Married, Filing Separately
Taxable Income Rate
$0 - $9,700 10%
$9,700 - $39,475 12%
$39,475 - $84,200 22%
$84,200 - $160,725 24%
$160,725 - $204,100 32%
$204,100 - $306,175 35%
$306,175+ 37%

Head of Household
Taxable Income Rate
$0 - $13,850 10%
$13,850 - $52,850 12%
$52,850 - $84,200 22%
$84,200 - $160,700 24%
$160,700 - $204,100 32%
$204,100 - $510,300 35%
$510,300+ 37%

Step 4 – Deduct FICA Taxes:

Besides, Federal Income Tax, the IRS also requires the employer to withhold FICA tax (15.3%) for the employee's paycheck and also requires the employer to pay an equal amount for each employee.


Federal Insurance Contributions Act (FICA) Taxes comprises of two types of taxes which are as follow:


  1. Social Security:

A total of 12.4% of social security tax is charged from which 6.2% is withheld from the employee's gross, and the employer pays the matching 6.2%. However, Social Security is only charged on the maximum taxable earnings of $137,700 for 2020.


  1. Medicare:

A total of 2.9% of Medicare is charged, from which 1.45% is withheld from the employee's gross, and the employer pays the matching 1.45%. Unlike Social Security, there is no maximum table earning limit for this tax. However, an additional surtax of 0.9% is charged as Additional Medicare Surtax on the employees having income over the specified level along with filing status, which is as follow:

Income Over Filing Status
$250,000 Married Filing Jointly
$125,000 Married Filing Separately
$200,000 Single

Note: Employers are not required to pay an equal amount for Additional Medicare Surtax.

Step 5 – Payment of FUTA Taxes

IRS requires the employer to pay another tax, known as The Federal Unemployment Tax Act (FUTA) Tax. This tax is paid at the rate of 6% on the first $7000 earned by each employee in a year. However, the IRS doesn't require the employees to contribute to it.

The employers who pay State Unemployment Insurance (SUI) tax in full and on time are given relieving FUTA tax credit of up to 5.4%, which saves a whopping 90% from FUTA Tax.


Step 6 – Subtract Post-Tax Deductions (If any):

Post-tax deductions (after-tax deductions) is an amount the employer takes out from the employee's paycheck after taxes. Therefore, it does not affect taxable wages and the amount of tax payable.

Here are some of the types of post-tax deductions that employee may voluntarily choose:

  • Charitable contributions
  • Disability insurance
  • Garnishments
  • Specific Retirement Plans like Roth 401(k)
  • Life Insurance

Step 7 – Withhold State Payroll Taxes:

As you are done with Federal Payroll Taxes, now it's time to discuss State Payroll Taxes. The South Dakota State doesn't charge State Income Tax on the employees. However, employers are required to pay State Unemployment Insurance Tax.


State Unemployment Insurance (SUI) Tax

The State Unemployment Insurance (SUI) Tax is an employer-funded program that provides temporary income to unemployed workers who have lost their job without fault of their own.

The state doesn't charge in South Dakota State Disability Insurance (SDI) tax on employers. However, it does require the employers to pay South Dakota State Unemployment Insurance (SUI) tax, at the rate ranging from 0% to 9.5% on a first $15,000 earned in wages by each employee in a year. However, new employers are given relief as they only have to pay a flat rate of 1.2%. Moreover, new construction employers are required to pay 6%.


Note: SUI Rates for South Dakota Employers change with time. Therefore, you are required to keep a check on notices to make sure you have paid the right amount.

Step 8 – Withhold Local Payroll Taxes:

No city or county in South Dakota levies Local Income Tax


Step 9 – Calculate Pay Check:

Now that you are done with all payroll taxes and calculated the net take-home pay of an employee, it's time to cut the paycheck. Moreover, you, as an employer, must pay your portion of FICA tax along with FUTA and SUI tax in full and on time regularly.


Federal and South Dakota Payroll Laws

  • Employers of South Dakota are required by state law to pay their employees at least on monthly pay frequency and on regular designated paydays.
  • South Dakota law requires the employers to pay at least the minimum wage rate of $9.30 to their employees, unless or otherwise exempted. Moreover, they are also required to pay overtime at one and half of the employee's regular hourly rate for hours worked over 40 hours in a workweek. Employee exempted from overtime and minimum wage law are:
    • Tipped Employees: They can be paid a cash minimum wage rate of $4.65, with a maximum tip credit of $4.65
    • Administrative, Professional and Executive employees as well as computer employees are exempted under FLSA law, but not under state law for Minimum wage and overtime
    • Outside Sales Persons
    • Baby-Sitters etc.
  • South Dakota doesn't have any law that requires employers to provide Meals and Lunch Breaks to their employees.
  • The State doesn't have any law that requires the employers to provide either paid or unpaid vacation benefits, sick leave benefits, holiday leave, jury duty leave, or bereavement leave. However, the state does require the employers to provide two (2) consecutive hours of paid leave for voting to their employees.

FAQs

Answer: Following are the taxes taken out of the employee's paycheck in South Dakota:

  1. Federal Income Tax: Employers withhold this tax at the rate ranging between 0% and 37%, according to seven tax brackets depending on income level and filing status.
  2. FICA – Medicare: This tax is taken out at the rate of 1.45% of each employee's taxable wages up to $200,000 (for 2020).
  3. FICA – Additional Medicare: If the employee's taxable wage exceeds the $200,000 threshold, they are charged with additional Medicare surtax of 0.9%.
  4. FICA – Social Security: This tax is withheld at the rate 0f 6.2% of each employee's taxable wages up to $137,700 (for 2020).

Answer: South Dakota doesn't charge any State Income tax on its residents and non-resident workers.

Answer: Yes, South Dakota's employers withhold Federal Income Tax from their employee's paycheck at the rate ranging between 0% and 37%, distributed in seven tax brackets, dependent on income level and filing status.

Answer: The Average Annual Wage in South Dakota is $62,811, which is equal to the average hourly wage of $30.

Answer: The current minimum wage rate for non-exempted employees in South Dakota is $9.30.

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