Self-Employment Tax in South Carolina (2026)

Fact-checked by the LegalGlass editorial team against primary sources · Published Aug 6, 2026 · Last updated Aug 6, 2026

Self-employment tax in South Carolina consists of the federal Social Security and Medicare tax (15.3% on net earnings up to annual limits) plus South Carolina's graduated individual income tax administered by the South Carolina Department of Revenue. South Carolina's income tax is progressive, with a top marginal rate applied to higher income. Both federal and state taxes are typically paid via quarterly estimated payments.

Overview of Self-Employment Tax in South Carolina

Self-employment tax for individuals operating businesses in South Carolina involves two main components: federal self-employment tax and South Carolina state income tax. The federal self-employment tax covers Social Security and Medicare contributions for self-employed individuals, mirroring the FICA taxes withheld from employee wages. South Carolina then imposes its own graduated income tax on net earnings from self-employment, calculated from your federal taxable income with South Carolina-specific additions and subtractions.

This guide details the rates, calculation methods, payment obligations, and South Carolina-specific considerations for self-employed individuals, including sole proprietors, partners in a partnership, and members of a limited liability company (LLC) that is not taxed as a corporation. Understanding these obligations is essential for compliance and for avoiding penalties. For a broader look at the federal component, see our main self-employment tax guide and the business tax hub.

Federal Self-Employment Tax (Social Security and Medicare)

The federal self-employment tax rate is 15.3%. This rate is composed of two parts:

• 12.4% for Social Security, applied to net earnings up to an annual wage base (for example, $168,600 for 2024, adjusted for inflation in later years including 2026).
• 2.9% for Medicare, applied to all net earnings from self-employment, with no income limit.

Higher earners also owe an Additional Medicare Tax of 0.9% on wages and self-employment income above threshold amounts set by filing status. Net earnings from self-employment are generally your gross trade or business income minus allowable deductions. For self-employment tax purposes, you multiply your net profit by 92.35% (0.9235) before applying the 15.3% rate; this adjustment reflects that employees do not pay Social Security and Medicare tax on the employer's share.

The federal self-employment tax is reported on IRS Schedule SE (Form 1040). One-half of your self-employment tax is deductible when calculating your adjusted gross income (AGI) for federal income tax purposes. Because South Carolina starts from your federal taxable income, this deduction effectively reduces both your federal and South Carolina income tax. See our self-employment tax calculator to estimate the federal portion.

South Carolina State Income Tax on Self-Employment Income

South Carolina imposes a graduated (progressive) individual income tax on residents and on non-residents earning income from South Carolina sources. Self-employment income is included in your federal taxable income, which is the starting point for calculating your South Carolina taxable income after state modifications. South Carolina uses a bracket structure in which lower income is taxed at 0% or a low rate and higher income is taxed up to the state's top marginal rate.

The exact rate for each bracket and the income thresholds are set in statute and adjusted annually for inflation; South Carolina has also enacted reductions to its top marginal rate in recent years. Because these figures change each year, confirm the current brackets on the South Carolina DOR individual income tax page before filing rather than relying on a prior-year rate.

South Carolina also offers credits and deductions that may reduce your state income tax liability, including a deduction related to certain retirement income and a two-wage-earner credit. It is important to consult the official DOR publications or a tax professional to determine eligibility, and to consider how forming an LLC in South Carolina affects your filings.

Paying Self-Employment Tax: Federal and South Carolina Estimated Taxes

Because self-employment income is not subject to employer withholding, self-employed individuals generally must pay both federal and South Carolina income taxes through estimated tax payments. These payments are typically made quarterly throughout the tax year.

Federal Estimated Taxes

You must pay federal estimated taxes if you expect to owe at least $1,000 in tax for the year, including your federal income tax plus your self-employment tax. Payments are made using IRS Form 1040-ES, Estimated Tax for Individuals. The payment due dates are generally:

• April 15 (for income earned January 1 to March 31)
• June 15 (for income earned April 1 to May 31)
• September 15 (for income earned June 1 to August 31)
• January 15 of the following year (for income earned September 1 to December 31)

If a due date falls on a weekend or holiday, the deadline shifts to the next business day. You can pay federal estimated taxes online via IRS Direct Pay, through the Electronic Federal Tax Payment System (EFTPS), or by mail with a payment voucher.

South Carolina Estimated Taxes

Similarly, you generally must pay South Carolina estimated taxes if you expect to owe at least $100 in South Carolina income tax after subtracting withholding and credits. Payments are made using Form SC1040ES, Individual Declaration of Estimated Tax. The due dates generally align with the federal schedule of April 15, June 15, September 15, and January 15 of the following year.

South Carolina estimated payments can be made electronically through the department's MyDORWAY online portal or by mail with a voucher. Underpaying estimated tax during the year can result in penalties from both the IRS and the South Carolina DOR, so review your projected liability each quarter.

South Carolina Pass-Through Entity Tax Election

South Carolina allows qualifying pass-through entities, such as partnerships and S corporations, to make an elective entity-level income tax. Like similar elections in other states, this was designed as a workaround to the federal cap on the state and local tax (SALT) deduction: the entity pays the income tax on active trade or business income, and electing owners receive a corresponding benefit on their South Carolina returns.

The election is optional and applies at the entity level rather than being paid directly by individual owners. Sole proprietors and single-member LLCs taxed as sole proprietors (disregarded entities) generally cannot make this election, because they are not treated as separate pass-through entities for this purpose. South Carolina also has specific rules for how active trade or business income of pass-through owners is taxed, which can differ from ordinary graduated rates. If you operate a multi-member LLC or S corporation, review the South Carolina DOR pass-through entity guidance and see our overview of the S-corp election.

Impact of Business Structure on Self-Employment Tax

The business structure you choose affects how your income is taxed, particularly for federal self-employment tax:

• Sole Proprietorship: The business and owner are the same for tax purposes. All net business income is subject to federal self-employment tax and South Carolina income tax.
• Partnership: Each partner's share of the partnership's net earnings is subject to federal self-employment tax and South Carolina income tax.
• Limited Liability Company (LLC):
  • Single-Member LLC: By default a single-member LLC is a disregarded entity (sole proprietorship) for tax purposes. The owner reports income on Schedule C, and net earnings are subject to federal self-employment tax and South Carolina income tax.
  • Multi-Member LLC: By default treated as a partnership; each member's share of net earnings is subject to federal self-employment tax and South Carolina income tax.
  • LLC electing S-Corporation status: An LLC can elect to be taxed as an S-corporation. Owner-employees take a reasonable salary subject to FICA, while remaining profits distributed as dividends are generally not subject to self-employment tax. This can reduce the self-employment tax burden but adds payroll and compliance requirements.

The choice of structure has significant tax implications, so it is advisable to consult a tax professional. For more on structures, see forming an LLC in South Carolina, how to form an LLC, or S-Corp vs. LLC.

Recordkeeping and Compliance

Accurate recordkeeping is essential for self-employed individuals in South Carolina. Keep detailed records of all business income and expenses to correctly calculate net earnings from self-employment, including invoices, receipts, bank statements, and mileage logs. Good records support the deductions you claim and help you prepare accurate federal and state returns.

Compliance also involves:

• Obtaining an Employer Identification Number (EIN): Sole proprietors without employees may use their Social Security Number, but an EIN is generally required for partnerships, multi-member LLCs, and sole proprietors with employees. See how to get an EIN in South Carolina.
• Filing federal returns: Form 1040, Schedule C (sole proprietors/single-member LLCs), Schedule K-1 (partners), and Schedule SE.
• Filing South Carolina returns: Form SC1040, South Carolina Individual Income Tax Return, or the appropriate non-resident schedule.
• Registering for other taxes: If you sell taxable goods or services, register for South Carolina sales tax through MyDORWAY.
• Maintaining licenses and permits: Keep required South Carolina business licenses current at the state and local level.

Failure to keep proper records or comply with tax obligations can lead to audits, penalties, and interest from both the IRS and the South Carolina DOR. A South Carolina registered agent and orderly records help ensure you receive notices on time.

Frequently Asked Questions

What is the self-employment tax rate in South Carolina?

The federal self-employment tax rate is 15.3% (12.4% for Social Security up to the annual wage base, plus 2.9% for Medicare). South Carolina separately imposes a graduated individual income tax, with a top marginal rate applied to higher income, administered by the South Carolina Department of Revenue.

How do I pay self-employment tax in South Carolina?

You pay federal self-employment tax and South Carolina income tax through quarterly estimated payments. Use IRS Form 1040-ES for federal amounts and South Carolina Form SC1040ES for state amounts. Payments can be made online through MyDORWAY or by mail.

Is self-employment tax deductible in South Carolina?

Yes, one-half of your federal self-employment tax is deductible when calculating your federal adjusted gross income (AGI). Because South Carolina builds its calculation from federal taxable income, this deduction also flows through to reduce your South Carolina income tax.

Does South Carolina have a pass-through entity tax election?

Yes. South Carolina allows qualifying partnerships and S corporations to elect an entity-level income tax. Electing owners generally receive a corresponding benefit. Sole proprietors and single-member LLCs taxed as sole proprietors generally cannot make this election.

Do I need to pay estimated taxes in South Carolina?

Generally yes. If you expect to owe at least $100 in South Carolina income tax after withholding and credits, you must make quarterly estimated payments using Form SC1040ES. Payments are typically due April 15, June 15, September 15, and January 15 of the following year.

Related

• Self-Employment Tax: A Complete Guide (federal hub)
• Self-Employment Tax Calculator
• Business Tax Hub
• How to Form an LLC in South Carolina
• South Carolina Sales Tax
• Self-Employment Tax in Connecticut
• Self-Employment Tax in Kentucky
• Self-Employment Tax in Minnesota
• How to Get an EIN
• S-Corp vs. LLC

Sources

1. IRS - Self-Employment Tax (Social Security and Medicare Taxes).
2. IRS - About Schedule SE (Form 1040), Self-Employment Tax.
3. IRS - Tax Topic 554, Self-Employment Tax.
4. IRS - About Form 1040-ES, Estimated Tax for Individuals.
5. IRS - Questions and Answers for the Additional Medicare Tax.
6. South Carolina Department of Revenue - Individual Income Tax.
7. South Carolina Department of Revenue - Estimated Tax (SC1040ES).
8. South Carolina Department of Revenue - Pass-Through Entity Tax.
9. South Carolina Department of Revenue - Sales & Use Tax.
10. South Carolina Legislature - S.C. Code Title 12, Chapter 6 (South Carolina Income Tax Act).
11. Cornell Law School Legal Information Institute - 26 U.S. Code § 1401 - Rate of tax (Federal SE Tax).
12. Cornell Law School Legal Information Institute - 26 U.S. Code § 1402 - Definitions (Net earnings from self-employment).
13. Cornell Law School Legal Information Institute - 26 U.S. Code § 6654 - Failure by individual to pay estimated income tax.
14. Cornell Law School Legal Information Institute - 26 U.S. Code § 3101 - Rate of tax (FICA/Additional Medicare).
15. Cornell Law School Legal Information Institute - 26 U.S. Code § 164 - Taxes (SALT deduction).

LegalGlass provides general information for educational purposes and is not a law firm or a substitute for advice from a licensed attorney or tax professional. Laws, fees, and thresholds change; verify current requirements with the IRS and the South Carolina Department of Revenue before acting.