South Dakota paycheck taxes at a glance
| Income tax on wages | None |
|---|---|
| Minimum wage (2026) | $11.85 an hour ($5.925 for tipped employees; rising to $12.30 on Jan. 1, 2027) |
Example: a $80,500 salary in South Dakota
The median household income in South Dakota is about $80,506 (2025 data). Here's what one earner with that salary, paid every two weeks, filing single with no pre-tax deductions, would see on each paycheck in 2026:
| Gross pay | $3,096.15 |
|---|---|
| Federal income tax | −$341.54 |
| Social Security | −$191.96 |
| Medicare | −$44.89 |
| Take-home pay | $2,517.76 |
That's $65,462 a year in take-home pay, or 18.7% of gross pay going to taxes.
Take-home pay by salary in South Dakota
Single filer, paid biweekly, standard W-4, no pre-tax deductions:
| Salary | Per paycheck | Per year | State payroll | Total tax rate |
|---|---|---|---|---|
| $40,000 | $1,320.00 | $34,320 | $0 | 14.2% |
| $60,000 | $1,938.08 | $50,390 | $0 | 16% |
| $80,000 | $2,504.23 | $65,110 | $0 | 18.6% |
| $100,000 | $3,045.38 | $79,180 | $0 | 20.8% |
| $150,000 | $4,376.58 | $113,791 | $0 | 24.1% |
| $200,000 | $5,727.96 | $148,927 | $0 | 25.5% |
What changed for 2026
- The minimum wage rose to $11.85 an hour on January 1, 2026, and the tipped minimum to $5.925. Both are set to rise on January 1, 2027, to $12.30 and $6.15.
South Dakota pay rules worth knowing
- Employers must pay all wages at least once each calendar month, on regular paydays designated in advance.
- When an employer separates you from the payroll, your unpaid wages are due by the next regular payday for those hours, or once you've returned any employer property you have, if that's later.
What comes out of a South Dakota paycheck
A South Dakota pay stub has three tax lines, all federal: income tax from your W-4, Social Security and Medicare. South Dakota has no personal income tax, no state disability or paid-leave premium, and no local income tax. The state column in the take-home table is $0 at every salary.
That makes the calculator above unusually close to your real check. The difference between two South Dakota workers with the same salary comes down to their W-4s and their benefit deductions, not where in the state they live.
A minimum wage that rises every January
South Dakota’s minimum wage is tied to inflation, so it moves every year. The 2026 rate is $11.85 an hour, and the state has already announced $12.30 for January 1, 2027. The adjustment follows the Consumer Price Index, is rounded up to the nearest nickel, and can never reduce the rate.
Tipped workers get a cash wage of half the minimum, $5.925 an hour in 2026, with tips expected to cover the rest. If they don’t, the employer pays the gap.
At 40 hours a week, the 2027 increase is worth $936 a year before taxes. To see what a raise like that does to each paycheck, choose Hourly in the calculator and compare $11.85 with $12.30.
Where South Dakota collects instead
Sales tax on almost everything, including food. The state rate is 4.2%, and it applies to a broad base of goods and services. Unlike most states, South Dakota doesn’t exempt groceries; only food bought with SNAP benefits is exempt. Cities can add a municipal sales tax of 1% to 2%, and can add a separate 1% gross receipts tax on restaurant meals, lodging, alcohol and admissions to events. For a household that spends most of its paycheck locally, that sales tax is the main state tax it pays. The sales tax calculator shows what a given rate adds.
A scheduled increase. The 4.2% rate dates from a 2023 cut, and the law sets it back to 4.5% on July 1, 2027. That’s a small change on any one purchase, but it applies to groceries too, so it’s worth knowing if you’re budgeting for 2027.
Property tax. Property taxes are local and fund schools, counties and cities. Rates differ widely between communities, so check the specific address before you buy, and factor it in with the home affordability calculator.
Moving to South Dakota
Your employer should stop withholding state income tax once it records your South Dakota address and work location. If you keep working for a company in another state, ask payroll which state’s rules it’s applying, because the state where you physically do the work can matter more than where your employer is based. You’ll also likely file a part-year resident return in your former state for the year you move. The salary calculator converts the take-home figures above into hourly, weekly or monthly amounts for comparing offers.
Estimates only. Your employer’s payroll system and your W-4 determine your actual paycheck.
Sources
- South Dakota Department of Labor and Regulation: Minimum Wage
- SDCL 60-11-9: Monthly wage payments
- SDCL 60-11-10: Wages due on separation
- SDCL 10-45-2: Sales tax rate (4.2%, and 4.5% from July 1, 2027)
- South Dakota Department of Revenue: Sales and Use Tax
- South Dakota Department of Revenue: Sales and Use Tax Guide (July 2026)
- U.S. Department of Labor: Minimum Wages for Tipped Employees
- Census Bureau: Household Income in States and Metropolitan Areas, 2025
- taxfoundation.org
- IRS Publication 15-T (federal withholding)
Frequently asked questions
How is South Dakota's minimum wage set?
It's adjusted every January 1 by the change in the cost of living, measured by the Consumer Price Index, and rounded up to the nearest 5 cents. It can't go down. The Department of Labor and Regulation publishes the next year's rate by October 15.
How much can a tipped worker be paid in South Dakota?
The cash wage for tipped employees is half the minimum wage, $5.925 an hour in 2026. If tips don't bring total pay up to $11.85 an hour, the employer has to make up the difference.
Are groceries taxed in South Dakota?
Yes. South Dakota doesn't have a general exemption for grocery food, so it's taxed at the 4.2% state rate plus any city sales tax. Food bought with SNAP benefits is exempt.
Is South Dakota's sales tax going up?
Under current law, yes. The state rate was cut to 4.2% in 2023, but the statute sets it back to 4.5% on July 1, 2027, unless the legislature acts first.
Why is a restaurant meal taxed more than groceries in some towns?
Cities that levy a municipal gross receipts tax add 1% on restaurant meals, lodging, alcohol and admissions, on top of the state rate and the city's regular sales tax. Groceries pay the state rate and city sales tax but not that extra 1%.
Facts verified November 6, 2026. Estimates only; your employer's payroll system and your W-4 determine your actual withholding.