Unemployment Insurance Tax (FUTA/SUTA): South Carolina

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor

Summary

• The South Carolina Department of Employment and Workforce (DEW) decides whether a worker should be classified as an employee or independent contractor for state unemployment insurance (SUI) coverage purposes. The primary factor in the determination is whether the employer has the right and authority to control and direct an individual's work. See Determining Coverage.
• For SUI purposes, wages includes all compensation for services performed that is paid in cash, and the reasonable cash value of noncash compensation. See SUI Taxable Wages.
• The DEW assigns employer contribution rates by listing all employers by increasing benefit ratios, from the lowest to the highest. The list is then divided into classes ranked one through 20. See Contribution Rates; Experience Rating Method.
• If the DEW finds that an employer acquired a business or an identifiable and segregable part of a business solely or primarily for the purpose of obtaining a lower rate of contributions, referred to as State Unemployment Tax Act (SUTA) dumping, it will not assign the employer the employment benefit record of an existing employing unit. Employers are liable for stiff penalties for engaging in SUTA dumping; officers and directors may be held personally liable. See SUTA Dumping.
• South Carolina employers may not make voluntary contributions to lower their contribution rates. Two or more qualified employers in the same or a related trade, occupation, or business or that have a common financial interest may apply to the DEW to establish a joint account. See Voluntary Contributions; Joint or Combined Accounts.
• All South Carolina employers must file quarterly contribution and wage reports by the last day of the month following the end of each calendar quarter. Most employers must file quarterly reports electronically. See Quarterly Reporting Requirements.
• An employer's account will not be relieved of benefit charges for overpayments caused by the employer's, or its agent's, failure to timely or adequately respond to requests for claim information. See Benefit Overpayments.
• Employers with 21 or more employees must file quarterly Multiple Worksite Reports on Form BLS 3020. See Multiple Worksite Reporting.
• All employers must keep certain records for five years pertaining to each pay period and each employee employed in each pay period. See Recordkeeping Requirements.