South Dakota paychecks in 2026: what changed
South Dakota still has no state income tax in 2026. The one state change that reaches your paycheck is a higher minimum wage; the rest are federal.
The changes
- New federal withholding tables. The IRS updated Publication 15-T for 2026, including changes from the 2025 tax law. The standard deduction is $16,100 single, $32,200 married filing jointly, and $24,150 head of household.
- Social Security wage base: $184,500 (up from $176,100). If you earn more, Social Security stops later in the year.
- Tips and overtime deductions for 2025–2028 — see below.
- South Dakota minimum wage: $11.85 from January 1, 2026, and $5.925 cash wage for tipped employees.
Tips and overtime in 2026
New federal deductions apply for 2025 through 2028: up to $25,000 for qualified tips, and up to $12,500 ($25,000 for joint filers) for the extra "half" of time-and-a-half overtime. Both phase out above $150,000 of income ($300,000 joint).
These are deductions on your tax return. Your employer still takes Social Security and Medicare out of tips and overtime, and still withholds income tax unless you tell it otherwise. If you expect to claim them, you can put the expected amount in Step 4(b) of your W-4 (and in the Step 4(b) box above) so less income tax is withheld during the year.
Work out your 2026 South Dakota paycheck →
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Sources
- IRS Publication 15-T (2026), Federal Income Tax Withholding Methods — Worksheet 1A and the annual percentage-method tables
- IRS Publication 15 (2026), Employer's Tax Guide — Social Security and Medicare rates
- Social Security Administration — 2026 wage base of $184,500
- IRS — tips and overtime deductions
- South Dakota Department of Revenue — Individual taxes — South Dakota does not impose a state income tax
- South Dakota Department of Labor & Regulation — Reemployment assistance for businesses — financed by employers through payroll taxes
- South Dakota Department of Labor & Regulation — Minimum wage — $11.85 and $5.925 tipped, effective January 1, 2026
- South Dakota Department of Labor & Regulation — Overtime and comp time — no state overtime law; federal rules apply
- SDCL 60-11-9 — Paydays — at least once each calendar month
- SDCL 60-11-10 and 60-11-11 — Final pay — next regular payday, or when employer property is returned
- South Dakota Department of Labor & Regulation — Wage and hour issues — claim of unpaid wages