How Much Does It Cost to Hire an Employee in South Dakota? (2026)
State-specific payroll taxes, workers' comp, and total employer costs in South Dakota.
Hiring a $60,000/year employee in South Dakota costs employers approximately $65,490 total in 2026, including $5,490 in mandatory payroll taxes and workers' comp. That's a 1.09x multiplier on base salary.
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Total Cost at $60K Salary
$65,490
Cost multiplier: 1.09x
SUTA Rate (Mid)
1.0%
Wage base: $15,000
Workers' Comp Rate
1.18%
No state income tax
Key Insight
For a $60,000 salary in South Dakota, employers pay $5,490 in mandatory taxes — a 1.09x cost multiplier. South Dakota's SUTA rate (1.0%) is below the national average of 1.70%, and there is no state income tax — a take-home pay advantage for employees.
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South Dakota Employer Tax Details
State-specific payroll obligations for employers
| SUTA Rate Range | 0.0% – 9.5% |
| SUTA New Employer Rate (typical) | 1.0% |
| SUTA Wage Base | $15,000 |
| Workers' Compensation (avg) | 1.18% of payroll |
| State Income Tax | No |
Example Employer Costs in South Dakota
Mandatory employer taxes only (no benefits or overhead)
| Component | $40,000 Salary | $60,000 Salary | $80,000 Salary |
|---|---|---|---|
| Social Security (6.2%) | $2,480 | $3,720 | $4,960 |
| Medicare (1.45%) | $580 | $870 | $1,160 |
| FUTA | $42 | $42 | $42 |
| SUTA (SD) | $150 | $150 | $150 |
| Workers' Comp | $472 | $708 | $944 |
| Total Employer Taxes | $3,724 | $5,490 | $7,256 |
| Total Cost (salary + taxes) | $43,724 (1.09x) | $65,490 (1.09x) | $87,256 (1.09x) |
These estimates include mandatory employer payroll taxes only. Add benefits ($7K-$17K) and overhead (~10% of salary) for full cost.
Tax rates sourced from IRS Publication 15, SSA COLA notices, and South Dakota Department of Labor. Social Security tax is 6.2% of wages up to $184,500. Medicare is 1.45% with no wage cap. FUTA is 0.6% on the first $7,000 after credit.
How South Dakota Compares
South Dakota's typical SUTA rate of 1.0% is below the national average of ~1.70%.
Workers' compensation at 1.18% of payroll is below the national average of ~1.20%. As one of the states with no state income tax, employees in South Dakota keep more of their paycheck, which can be a hiring advantage without additional employer cost.
South Dakota Employer Environment
Below-average employer costs- No state income tax — employees keep more of their paycheck, a recruiting advantage
- Low SUTA rate (1.0% on $15,000 wage base) — below-average unemployment insurance cost
- Workers' comp rate 1.18% — near national average, varies by industry classification
South Dakota's below-average SUTA and competitive workers' comp rates translate to a meaningful cost advantage per employee compared to the national norm, particularly for labor-intensive businesses.
South Dakota Employment Profile
South Dakota has no state income tax, a $15,000 SUTA wage base, and no paid family leave mandate, creating a very low employer overhead environment.
financial services (credit card banks), healthcare, agriculture
South Dakota's permissive banking regulations have attracted major credit card issuing banks (Wells Fargo, Citibank); these operations pay wages well above the state median.
Cost at Different Salary Levels in South Dakota
Total employer cost including all mandatory payroll taxes
Compare South Dakota With
Employee Costs in Other States
Hiring Cost by Industry in South Dakota
Workers' comp rates vary significantly by industry — restaurant and construction workers cost far more to insure than office staff.
Average Wages by Occupation in South Dakota
BLS OEWS 2024Median annual wages from the Bureau of Labor Statistics — use these as your baseline salary when estimating total hiring cost.
| Occupation Group | Median Annual | Employed |
|---|---|---|
| Management | $105,890 | 17,000 |
| Architecture and Engineering | $80,550 | 6,550 |
| Computer and Mathematical | $79,390 | 9,660 |
| Legal | $77,940 | 2,070 |
| Business and Financial Operations | $74,960 | 25,990 |
| Healthcare Practitioners and Technical | $69,510 | 35,420 |
| Life, Physical, and Social Science | $61,760 | 4,780 |
| Installation, Maintenance, and Repair | $57,070 | 19,560 |
States With Similar Hiring Costs
These states have SUTA rates close to South Dakota's 1.0% — good for cost benchmarking.
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Simplify Payroll in South Dakota
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