Nanny Taxes in South Dakota

Minimum Wage

Household employees must be paid at least the highest of the federal, state, or applicable local minimum wage rates. South Dakota’s state minimum wage of $11.50/hour applies. South Dakota adjusts this rate annually according to any increase in the cost of living. Increases for the following year are announced no later than October 15 and go into effect on January 1.

Overtime Pay Rules

Household employees in South Dakota are required to be paid at least time and a half for hours worked over 40 in a seven-day workweek. Overtime compensation is not required for live-in employees.

State Unemployment Tax & Rate

In South Dakota, the new employer SUI (state unemployment insurance) rate is 1.20 percent on the first $15,000 of wages for each employee. New employers are also assessed an investment fee of 0.55 percent. Employers with previous employees may be subject to a different rate. This is an employer-only tax.

Workers’ Compensation Insurance

Household employers in South Dakota are required to have workers’ compensation coverage for any employee who works for more than 20 hours in a calendar week or for more than six weeks in any 13-week period. Get a quote on workers’ compensation insurance.

Disability Benefits Insurance

The state has no disability benefits rules related to nanny tax and payroll.

Domestic Workers’ Bill of Rights

The state has no domestic workers’ bill of rights.

Paid Leave Laws

The state has no paid leave regulations related to nanny tax and payroll.

Other State Regulations

The state has no other regulations related to nanny tax and payroll.

Helpful Links for Nanny Taxes in South Dakota

Federal Regulations

All household employers need to follow certain federal regulations including:

Fair Labor Standards Act (FLSA) Classification Guidelines

• Household workers are considered employees and not independent contractors. Learn more about misclassifying employees as independent contractors.
• Household workers are also non-exempt employees, which means they receive overtime pay of at least time-and-a-half for hours worked over 40 per workweek. Learn more about overtime pay.

FICA Taxes

Social Security and Medicare taxes are commonly referred to as FICA taxes. If you pay cash wages of $2,800 or more to any household employee in 2025 (or paid a domestic worker $2,700 or more in 2024), you must withhold and pay FICA taxes. FICA taxes are 15.3 percent of cash wages. As an employer, you pay 7.65 percent (6.2 percent for Social Security and 1.45 percent for Medicare). Your employee's share is also 7.65 percent, which you can withhold from their wages or choose to pay yourself. You don't withhold or owe FICA taxes on wages you pay to your spouse, child under the age of 21, parent, or any employee under 18 at any time during the calendar year.

Federal Unemployment Tax (FUTA)

If you pay a household employee total cash wages of $1,000 or more in any calendar quarter, you'll owe federal unemployment tax. This is an employer-only tax. FUTA is six percent of cash wages on the first $7,000 you pay an employee.

Mileage Reimbursement

If your employee uses their own car in the course of their work, you can reimburse them for mileage. For 2025, the IRS has set the optional standard mileage rate at 70 cents per mile driven. Paying mileage is not mandatory in most states, and you can reimburse your employee at a different rate. However, if the cost of mileage causes your employee to fall below minimum wage, then you need to reimburse them for mileage.