Overview of South Carolina Taxes
South Carolina has a progressive income tax system. Tax rates cover a wide spectrum, with a top rate of 7% and a bottom rate of 0%.
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- Our Tax Expert
Jennifer Mansfield, CPA Tax
Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
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South Carolina Paycheck Calculator
South Carolina Paycheck Quick Facts
- South Carolina income tax rate: 0% - 7%
- Median household income: $51,015 (U.S. Census Bureau)
- Number of cities that have local income taxes: 0
How Your South Carolina Paycheck Works
The reason your paychecks never quite add up to your quoted salary or hourly rate is because your employer withholds some money to pay for taxes. No matter which state you work in, you will need to pay FICA taxes and federal income taxes.
FICA taxes include Social Security and Medicare taxes. Each pay period, 6.2% of your income goes toward Social Security taxes and 1.45% toward Medicare. Your employer matches those amounts so that the total contributions to FICA taxes are double what you pay. If you have income in excess of $200,000 you will also need to pay a Medicare surtax of 0.9%. Your employer does not match this.
While employers usually cover half of workers’ FICA taxes, you might find yourself responsible for paying the entire sum if you are self-employed or a contract worker. Luckily, if you do have to pay the full FIC A taxes, you may be eligible to receive the employer portion in return via a tax deduction. For more help with minimizing you tax bite while maximizing your earnings, it’s always helpful to talk with a financial advisor.
When you start a new job or experience a major life change, like getting married or having a child, you have to fill out a new Form W-4. It’s your employer’s job to make sure that all of your income withholding matches up with the information you have included on this form.
Keep in mind that withholding amounts changed in 2018 because of President Trump's new tax plan. You should have seen changes to your paycheck in early 2018. While there weren't any changes in 2019, the 2020 W-4 includes notable revisions. In fact, it no longer uses allowances, and it requires you to enter annual dollar amounts for things like income tax credits, non-wage income, itemized and other deductions and total annual taxable wages. The form also uses a five-step process that allows filers to indicate any additional income or jobs. You don't need to complete this form if you were hired before 2020, unless you plan on changing jobs or adjusting your withholdings in 2020.
If you take advantage of employer-sponsored health or life insurance, premiums you pay on these will be deducted from your paycheck, as well. These payments are usually pre-tax, which means they come out before income taxes do. Employer-sponsored retirement plans, like 401(k) plans, are also pre-tax. That means you can save for retirement while simultaneously decreasing your taxable income. Accounts for medical expenses, such as health savings accounts (HSAs) are also pre-tax.
Taxpayers in the state of South Carolina fall into one of six income tax brackets. These brackets are subject to increasing tax rates with rising income levels. The state updates these brackets each year to account for inflation.
Earners making up to $3,030 in taxable income won't need to pay any state income tax, as the bottom tax rate in South Carolina is 0%. Taxable income of $15,160 or above is subject to South Carolina's top tax rate of 7%. That’s a relatively low threshold, so most filers will pay the top rate on at least some of their income. All filers are subject to the same income tax brackets regardless of filing status.
Property taxes in South Carolina remain low. Mortgage rates also fall below the national average, which can make the Palmetto State a great option to buy a home. If you are looking to refinance or purchase a home, visit our South Carolina mortgage guide to understand the details of mortgages in the state.
A financial advisor in South Carolina can help you understand how taxes fit into your overall financial goals. Financial advisors can also help with investing and financial plans, including retirement, homeownership, insurance and more, to make sure you are preparing for the future.
How You Can Affect Your South Carolina Paycheck
One way you can affect your take-home pay in South Carolina is through the information recorded on the W-4 form you submit at the beginning of a new job. If you ever want to make a change, you just need to fill out a new W-4.
If you anticipate having a big tax bill, also consider putting more of your money into pre-tax accounts. The money you put into a 401(k) or 403(b) retirement account is deducted from your paycheck before taxes are applied. So by increasing your contribution to an account like this, you are lowering your taxable income, which could help you save in taxes.
Similarly, if your employer offers them, you can make use of a health savings account (HSA) or flexible spending account (FSA). The money you put into these accounts is also pre-tax, and it can be used to pay certain medical-related expenses like copays or some prescriptions. But be aware that only $500 can roll over from year to year in an FSA. That means you could lose money if you end the year with more the $500 in your FSA.
Most Paycheck Friendly Places
SmartAsset's interactive map highlights the most paycheck friendly counties across the U.S. Zoom between states and the national map to see data points for each region, or look specifically at one of the four ranking factors in our analysis: Semi-Monthly Paycheck, Purchasing Power, Unemployment Rate, and Income Growth.
Methodology To find the most paycheck friendly places for counties across the country, we considered four factors: semi-monthly paycheck, purchasing power, unemployment rate and income growth.
First, we calculated the semi-monthly paycheck for a single individual with two personal allowances. We applied relevant deductions and exemptions before calculating income tax withholding. To better compare withholding across counties, we assumed a $50,000 annual income. We then indexed the paycheck amount for each county to reflect the counties with the lowest withholding burden, or greatest take-home pay.
We then created a purchasing power index for each county. This reflects the counties with the highest ratio of household income to cost of living. We also created an unemployment index that shows the counties with the lowest rate of unemployment. For income growth, we calculated the annual growth in median income throughout a five year period for each county and then indexed the results.
Finally, we calculated the weighted average of the indices to yield an overall paycheck friendliness score. We used a one-half weighting for semi-monthly paycheck and a one-sixth weighting for purchasing power, unemployment rate and income growth. We indexed the final number, so higher values reflect the most paycheck friendly places.
Sources: SmartAsset, government websites, US Census Bureau 2018 American Community Survey, MIT Living Wage Study, Bureau of Labor Statistics
