Bringing on your first employee is a milestone — and a compliance checkpoint. South Carolina has specific registration, reporting, and coverage requirements that every employer must meet before that first paycheck goes out. Here’s the complete checklist.
**Step 1: Get Your Federal Employer Identification Number (EIN)**
If you don’t already have one, apply for an EIN at irs.gov. It’s free, instant online, and required to open a business bank account, file payroll taxes, and register with the state. Your EIN is your business’s federal tax identity.
**Step 2: Register for South Carolina Withholding**
As a South Carolina employer, you’re required to withhold state income tax from employee wages and remit it to the SCDOR. Register for a withholding account at dor.sc.gov before your first payroll. You’ll receive a withholding account number and a filing frequency (monthly, quarterly, or annually) based on your expected volume.
**Step 3: Set Up Federal Payroll Tax Remittance**
You’re also responsible for withholding and remitting federal income tax, Social Security, and Medicare taxes (FICA). Enroll in the Electronic Federal Tax Payment System (EFTPS) at eftps.gov to remit federal payroll taxes electronically. Most small employers deposit monthly; larger payrolls may require semi-weekly deposits.
**Step 4: Register for Unemployment Insurance**
Register with the South Carolina Department of Employment and Workforce (DEW) to pay state unemployment insurance (SUTA) taxes. New employers are assigned a standard tax rate, which adjusts over time based on your claims history. Register at dew.sc.gov.
**Step 5: Obtain Workers’ Compensation Coverage**
South Carolina requires any business with four or more employees — full-time or part-time combined — to carry workers’ compensation insurance. If you’re hiring your fourth employee, obtain coverage before they start. Coverage can be purchased through a private insurer or, in some cases, through the SC State Accident Fund. Sole proprietors and partners are generally excluded from the employee count but can elect coverage.
**Step 6: Report New Hires**
Federal law requires employers to report all new hires to the state within 20 days of hire. In South Carolina, report through the SC New Hire Reporting Program at dew.sc.gov. You’ll submit the employee’s name, address, Social Security number, and your EIN.
**Step 7: Complete I-9 Employment Eligibility Verification**
For every new hire, you must complete a Form I-9 (Employment Eligibility Verification) no later than the first day of work for pay. Review acceptable identity and work authorization documents in person. Retain the completed I-9 for at least three years from the date of hire or one year after employment ends, whichever is later.
**Step 8: Use E-Verify**
South Carolina law requires most employers with a physical presence in the state to use E-Verify to confirm new employees are authorized to work in the United States. Register at e-verify.uscis.gov and run verification within three business days of each hire’s start date.
**Wage and Hour Basics**
South Carolina has no state minimum wage law. The federal minimum wage of $7.25 per hour applies. However, many Spartanburg employers pay above this rate to remain competitive, particularly in manufacturing-adjacent support roles and food service.
Getting these steps right from the start protects you from penalties, audits, and liability down the road. Many Spartanburg small businesses use a payroll service or PEO (professional employer organization) to manage compliance automatically.