Author: South Carolina Department of Employment and Workforce
This article originally appeared in the Winter 2026 issue of the South Carolina CPA Report
The new year brings tax rate cuts to South Carolina businesses. Governor Henry McMaster and South Carolina Department of Employment and Workforce (DEW) Executive Director William Floyd announced in mid-November last year that South Carolina’s unemployment insurance (UI) tax rates would decrease or remain the same for employers in 2026. Overall, UI tax costs this year are projected to be $40 million lower than in 2025.
For the last 12 years, UI tax rates have decreased or remained the same, reducing employer tax burdens in the state by $355 million. The 2026 UI tax cut is the largest by percentage since 2011. With a UI Trust Fund balance of $1.8 billion, tax rates applicable to wages paid in 2026 range from 0.06 percent to 5.46 percent. Each employer’s rate will depend on their UI claims experience.
For instance, any business that had no UI benefit charges from July 1, 2022, through June 30, 2025, is assigned to tax class 1 and pays a rate of 0.06 percent. New businesses with less than 12 months of accomplished liability will pay the new employer tax rate of 1.00 percent. This year’s rates are lower than last year for businesses in tax classes 2 through 19, with an average savings in these classes of 34.7 percent.
“Last year, South Carolina hit historic levels of people working, became fourth in the nation for real GDP growth, increased job and wage growth across many sectors, and steadily grew our UI Trust Fund,” said DEW Executive Director William Floyd.
To determine tax rates each year, DEW conducts extensive analyses of economic factors, the state of the UI Trust Fund, projected unemployment rates, and estimated benefit payments. Although tax rates for most classes are lower than their respective 2025 levels, individual businesses may still move between classes based on their unemployment claim activity.
To give employers an opportunity to review claims that could impact their tax rates, all businesses with charges against their accounts are provided a quarterly “charge statement” to review, and have 30 days to protest any charges. Tax rate notices for 2026 were mailed to businesses in late November 2025. Employers can also log in to their State Unemployment Insurance Tax System (SUITS) account at any time to view their 2026 tax rate.
Visit dew.sc.gov/employers/tax-rate-information to view the 2026 tax rate chart.
Did you know?
Agents and Third-Party Administrators (TPAs) can submit a single Memorandum of Understanding (MOU) to DEW to record their clients instead of submitting individual authorizations from each client. The purpose of the MOU is to stand as an agreement between DEW and the requesting agent. By submitting the MOU, the requesting agent certifies that they have a signed written authorization on file for each client/employer for which access is being obtained through the SUITS agent portal. DEW agrees to provide the Agent with access to each of their client’s UI tax and/or benefit account that the Agent maintains a signed written authorization.
SUITS provides a separate link for TPAs to have client account access. Go to uitax.dew.sc.gov and click on Agent to begin the Memorandum of Understanding (MOU) authorization process to establish access to your client’s UI accounts.
The first step is to request and submit the MOU to DEW’s Employer Tax Services (ETS) Department for review. For step-by-step instructions, visit dew.sc.gov/employers/suits and access the MOU Guides for Agents, which describe how to request and submit MOUs, adding clients, removing clients, and frequently asked questions.
Once the MOU is activated, DEW will send an approval confirmation and instructions. Agents will have the ability to enter new clients’ account numbers, Federal Identification Numbers (FIDs), and to gain account access without further submission of a signed written authorization to DEW.
