What Changes in Your Paycheck in South Carolina
Your paycheck in South Carolina shows a South Carolina state income tax line item that grows progressively with income, starting at 0% for the first $1. However, because the brackets are extremely compressed, virtually all middle and high earners immediately reach the 6.5% rate on almost all income. For a $1 salary, you might see ~ $1-$1 annually (~ $1-$1 per biweekly paycheck) for state tax, reflecting that most income is taxed at 6.5%. South Carolina paychecks only show state and federal tax deductions—no local income tax line items. The progressive brackets are so compressed that South Carolina effectively operates like a flat 6.5% tax state for most taxpayers. Retirees see no state tax on retirement income distributions, making South Carolina attractive for those relying on retirement savings.
Example State Tax in South Carolina
What you'll pay in South Carolina state income tax at different salary levels (single filer, no deductions):
| Gross Salary | State Tax (Year) | Effective Rate |
|---|---|---|
| $50,000 | $2,593 | 5.2% |
| $75,000 | $4,218 | 5.6% |
| $100,000 | $5,843 | 5.8% |
| $150,000 | $9,093 | 6.1% |
Use the calculator above to see your exact take-home pay with your filing status and deductions.
Is South Carolina Better for You?
South Carolina works well for:
South Carolina is relatively challenging for most income levels due to the effective flat-like 6.5% rate, but lower-income earners (under ~ $1 for all filing statuses) benefit from the zero-percent bracket on the first $1 and the 3% rate on income up to $1. At these very low income levels, effective state tax rates are 0%-2%, which is favorable. Retirees also benefit from exemptions on Social Security and most retirement income, making South Carolina attractive for those relying on retirement savings.
South Carolina may not be ideal if:
South Carolina is challenging for most earners due to the effective flat-like 6.5% rate on most income. A $1 earner pays an effective rate around 6.2%-6.5% (~ $1-$1 annually), while the same earner in a flat-tax state like Pennsylvania would pay $1 (3.07% flat, though PA may have local EIT), and in North Carolina would pay $1 (4.75% flat). Most earners with geographic flexibility would save $1-$1+ annually by moving to lower-tax states. South Carolina's 6.5% effective rate is among the higher rates in the nation for most earners.
Common Mistakes People Make
Misconception: 'Progressive tax means I'll pay different rates across brackets in South Carolina.' Reality: South Carolina's progressive system is so compressed that virtually all taxpayers earning above $1-$1 pay the top 6.5% rate on almost all their income. A $1 earner pays 6.5% on ~ $1+ of their income, making their effective rate around 6.2%-6.5%—essentially a flat 6.5% rate for most taxpayers. The 'progressive' label is technically accurate but practically irrelevant for most earners.
Misconception: 'South Carolina has low taxes because it's a Southern state.' Reality: South Carolina's income tax is effectively a flat 6.5% for most earners (due to compressed brackets), which is higher than many flat-tax states like Pennsylvania (3.07%), Indiana (3.15%), or North Carolina (4.75%). A $1 earner pays an effective rate around 6.2%-6.5% (~ $1-$1 annually), while the same earner in a flat-tax state like Pennsylvania would pay $1 (3.07% flat, though PA may have local EIT). South Carolina's effective rate is among the higher rates in the nation for most earners.
Misconception: 'The zero-percent bracket means I'll pay less in South Carolina.' Reality: While South Carolina has a zero-percent bracket for the first $1 of income, the brackets are so compressed that virtually all taxpayers earning above $1-$1 pay the top 6.5% rate on almost all income. A $1 earner pays 6.5% on ~ $1+ of their income, making their effective rate around 6.2%-6.5%. The zero-percent bracket provides minimal benefit for most earners compared to the high top rate they pay on most income.
Key Facts That Affect Your Take-Home Pay
- South Carolina uses a progressive income tax system with three brackets, starting at 0% for the first $1 of income (for all filing statuses) and escalating to a top rate of 6.5% for income above $1, making South Carolina's bracket structure the simplest among progressive states with a zero-percent bracket at the bottom.
- South Carolina's progressive brackets are extremely compressed at the top, meaning the first two brackets cover relatively low dollar amounts ($1-$1), so most middle and high earners quickly reach the top 6.5% rate. For a $1 earner, ~ $1+ of income is taxed at 6.5%, making the effective rate very close to the flat 6.5% rate.
- South Carolina does not charge municipal income taxes, ensuring uniform tax withholding across all areas. All South Carolina residents have the same income tax structure—only the state progressive brackets apply.
One Thing to Know
South Carolina's 6.5% top rate is higher than many people expect for a 'low-cost' state. The compressed brackets mean someone earning $1 pays the same top rate (6.5%) as someone earning $1, making the 'progressive' label practically meaningless for most taxpayers.
Important Notes
These calculations are estimates based on current tax law. Your actual take-home pay varies based on:
- Pre-tax deductions (401(k), health insurance, HSA, etc.)
- Your W-4 withholding elections
- Additional income or deductions at tax time
- Individual circumstances and tax situations
Tax rates are subject to change. Federal and state tax laws may be updated annually. This is not tax advice. For personalized help, consult a tax professional familiar with South Carolina tax laws.