Gov. Henry McMaster, SCDEW Announce Tax Rate Cuts for South Carolina Businesses South Carolina Businesses To Save $40 Million

COLUMBIA, S.C. – Governor Henry McMaster and S.C. Department of Employment and Workforce (DEW) Executive Director William Floyd today announced that South Carolina’s unemployment insurance (UI) tax rates will decrease or remain the same for employers in 2026. Overall, UI tax costs next year are projected to be $40 million lower than in 2025. 

"During every year of my administration, we have lowered or maintained UI business taxes, and 2026 will bring the largest reduction yet," said Governor Henry McMaster. "South Carolina continues to attract jobs and investment because we focus on creating the most competitive and business-friendly climate in the country. These tax cuts give employers more room to hire, expand, and invest, which strengthens our economy and creates new opportunities for our people."

UI tax rates have either decreased or remained the same for the last 12 consecutive years, reducing employer tax burdens by $355 million. The 2026 UI tax cut is the largest by percentage since 2011. 

With a fully solvent and resilient UI Trust Fund balance of $1.8 billion, DEW has released the tax rates applicable to wages paid January 1st through December 31st, 2026, ranging from 0.06% to 5.46% depending on an individual business’s experience with the UI system.

Some key information includes the following:

• Any business that had no UI benefit charges from July 1, 2022, through June 30, 2025, is assigned to tax class 1 and pays 0.06%.
• New businesses with less than 12 months of accomplished liability will pay the new employer tax rate of 1.0%.
• 2026 rates are lower than last year for businesses in tax classes 2 through 19. The average savings for businesses in tax classes 2 through 19 is 34.7%.

“South Carolina has hit historic levels of people working, become fourth in the nation for real GDP growth, increased job and wage growth across many sectors this year, and has steadily grown our UI Trust Fund,” said DEW Executive Director William Floyd.

To determine tax rates each year, DEW conducts an extensive analysis of factors such as the economy, the current state of the UI Trust Fund, projected unemployment rates, and estimated benefit payments. Although tax rates for most classes are lower than their 2025 levels, individual businesses may still move between classes based on their unemployment claim activity. All businesses with charges against their accounts are provided a “charge statement” quarterly to review and have 30 days to protest any charges that they do not believe should be on their account. Tax rate notices will be mailed to businesses this week. However, employers can log into their State Unemployment Insurance Tax System (SUITS) account today to view their 2026 tax rate.

Click here to view the 2026 tax rate chart. Members of the press can reach out to communications@dew.sc.gov with any media inquiries or interview requests.