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Article #7: Payroll South Dakota, Unique Aspects of South Dakota Payroll Law and Practice

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South Dakota has no State Income Tax. Regulation E regarding choice of
There for there is no State Agency to financial institutions. South Dakota has
oversee withholding deposits and reports. no State Wage and Hour Law provisions
There are no State W2's to file, no concerning pay stub information. South
supplement wage withholding rates and no Dakota requires that employee be paid no
State W2's to file. Not all states allow less often than monthly. In South Dakota
salary reductions made under Section 125 there are no statutory requirements
cafeteria plans or 401(k) to be treated concerning the lag time between when the
in the same manner as the IRS code services are performed and when the
allows. In South Dakota cafeteria plans employee must be paid. South Dakota
are taxable for unemployment insurance payroll law requires that involuntarily
purposes. 401(k) plan deferrals are terminated employees must be paid their
taxable unemployment purposes. South final pay by next regular payday if all
Dakota doesn't have income tax. The employer property is returned and that
South Dakota State Unemployment Insurance voluntarily terminated employees must be
Agency is: Department of Labor paid their final pay by the next regular
Unemployment Insurance Division Box 4730, payday if all employer property is
420 S. Roosevelt St. Aberdeen, SD returned. There is no provision in
57402-4730 (605) 626-2452 The State of South Dakota law concerning paying
South Dakota taxable wage base for deceased employees. Escheat laws in South
unemployment purposes is wages up to Dakota require that unclaimed wages be
$7,000.00. South Dakota has optional paid over to the state after one year.
reporting of quarterly wages on magnetic The employer is further required in South
media. Unemployment records must be Dakota to keep a record of the wages
retained in South Dakota for a minimum abandoned and turned over to the state
period of four years. This information for a period of ten years. South Dakota
generally includes: name; social security payroll law mandates no more than $3.02
number; dates of hire, rehire and may be used as a tip credit. In the South
termination; wages by period; payroll pay Dakota payroll law there is no provision
periods and pay dates; date and covering required rest or meal periods.
circumstances of termination. The South South Dakota statute requires that wage
Dakota State Agency charged with and hour records be kept for a reasonable
enforcing the state wage and hour laws period. These records will normally
is: Department of Labor Division of Labor consist of at least the information
and Management 700 Governors Dr. Pierre, required under FLSA. The South Dakota
SD 57501-2291 (605) 773-3681 The minimum agency charged with enforcing Child
wage in South Dakota is $5.15 per hour. Support Orders and laws is: Office of
There is also no general provision in Child Support Enforcement Department of
South Dakota State Law covering paying Social Services 700 Governor's Dr.
overtime in a non-FLSA covered employer. Pierre, SD 57501-2291 (605) 773-3641
South Dakota State new hire reporting South Dakota has the following provisions
requirements are that every employer must for child support deductions:
report every new hire and rehire. The - When to start Withholding? Next
employer must report the federally payday after service.
required elements of: - When to send Payment? Within 7 days
- Employee's name of Payday.
- Employee's address - When to send Termination Notice?
- Employee's social security number Within 5 days of termination.
- Employer's name - Maximum Administrative Fee? no
- Employers address provision
- Employer's Federal Employer - Withholding Limits? 50% of income.
Identification Number (EIN) This Please note that this article is not
information must be reported within 20 updated for changes that can and will
days of the hiring or rehiring. The happen from time to time. Charles J.
information can be sent as a W4 or Read, CPA has been in the payroll,
equivalent by mail, fax or accounting and tax business for 30 years,
electronically. There is a civil the last fifteen in private practice.
proceeding for a petty offense for a late Mr. Read is the author of "Tax and
report in South Dakota. The South Dakota Accounting Issues in Forming a New
new hire-reporting agency can be reached Business." To find professional payroll
at 888-827-6078 or on the web at South services at a budget price go to a
Dakota does allow compulsory direct paperless payroll company. For a full
deposit but the employee's choice of service payroll bureau with CPA's on
financial institution must meet federal staff visit . See an excerpt of Mr.






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