Payroll South Dakota, Unique Aspects of South Dakota Payroll Law and Practice

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