How do I hire my first employee?

How to Hire Your First Employee in South Carolina

Hiring your first employee in South Carolina involves several key operational steps to ensure compliance and smooth onboarding. Follow this practical guide to get started efficiently.

Register for Employer Accounts

• Obtain an Employer Identification Number (EIN): Before hiring, secure an EIN from the IRS for tax reporting and payroll purposes.
• Register with South Carolina Department of Revenue (SCDOR): Set up your business as an employer to handle state income tax withholding.
• Register with South Carolina Department of Employment and Workforce (SCDEW): This is necessary for unemployment insurance tax reporting.

Understand Employee Classification and Compliance

• Classify employees correctly: Determine if the worker is an employee or independent contractor to comply with payroll taxes and benefits.
• Verify work eligibility: Complete Form I-9 to confirm the employee's legal right to work in the U.S.
• Post required workplace notices: Display South Carolina and federal labor law posters at your business location.

Set Up Payroll and Tax Withholding

• Implement a payroll system: Use payroll software or services to manage wages, withholdings, and tax filings efficiently.
• Withhold federal and state taxes: Deduct Social Security, Medicare, federal income tax, and South Carolina state income tax from employee paychecks.
• File payroll tax reports: Submit required reports to the IRS, SCDOR, and SCDEW on time to avoid penalties.

Provide Required Insurance and Benefits

• Workers’ Compensation Insurance: South Carolina requires most employers to carry workers’ compensation insurance to cover workplace injuries.
• Unemployment Insurance: Pay unemployment taxes through SCDEW to fund benefits for eligible former employees.

Maintain Employee Records and Reporting

• Keep accurate records: Maintain employee information, payroll data, and tax documents for at least four years.
• Report new hires: Submit new hire reports to the South Carolina New Hire Reporting Center within 20 days of hiring.

As of 2026, staying current with South Carolina employment regulations and tax requirements will help you operate your business smoothly and avoid compliance issues.