Unemployment Insurance
Unemployment Insurance

Generally, employers pay both state and federal unemployment taxes if they pay wages to employees totaling $1,500 or more in any quarter of a calendar year; or at least one employee worked for them during any day of a week during 20 weeks in a calendar year. Whether the weeks were consecutive doesn’t matter. Note that some state laws differ from the federal law.

In South Carolina, the base tax rate for a new employer under Department of Employment & Workforce law is 2.64 percent, plus applicable surcharge, of the total taxable wages. After 12 consecutive months of liability as of June 30, the employer may have his state employment insurance tax rate reduced based on certain factors. If the employer’s base state tax rate for contribution purposes is reduced below 2.64 percent, his federal excise tax will continue to be paid at a rate of 0.8 percent. You can learn more by going here.

In addition to the contribution rate there is also an assessment, known as the Contingency Assessment, of .06% on the taxable wages reported each quarter.

In some cases, it may be possible to report wages and pay compensation in a companies' home state. The decision to grant reciprocity with another state for an individual company is decided on a case-by-case basis. For example, a company with operations in multiple states which has an active account in their home state might be a candidate for a reciprocal agreement, allowing contributions to be made in the company's home state if both state's agree.  You can read more about Interstate Reciprocal Coverage Arrangement here.

For further information about Unemployment Insurance, please contact Deputy Executive Director Bill Funderburk  at the South Carolina Department of Employment & Workforce (DEW); 803.737.3089.
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