Does South Dakota have a state income tax?

No. South Dakota has zero state income tax on individual wages and salaries. There is no local income tax either. Your only paycheck deductions are federal income tax and FICA (Social Security + Medicare). On an $80,000 salary filing single, your take-home is $64,831 — identical to Texas, Florida, Nevada, and Wyoming. South Dakota is unique among no-tax states because it also has no corporate income tax.

Is South Dakota good for remote workers?

Yes — South Dakota is one of the top states for remote workers seeking to reduce their tax burden. With zero state income tax, no corporate income tax, and low cost of living (Sioux Falls and Rapid City are significantly cheaper than Minneapolis or Denver), a remote worker earning $100,000 can save $4,000-$6,000/year vs living in Minnesota or Colorado. South Dakota has seen rapid growth in remote workers, particularly from the Midwest and from states with high income taxes. The state also has no estate or inheritance tax at the state level.

South Dakota Paycheck Calculator 2026

Q: How much do I save by living in South Dakota vs Minnesota?

Significantly more. On an $80,000 salary filing single, a South Dakota resident takes home $64,831 while a Minnesota resident takes home about $61,179 — a difference of roughly $3,652 per year ($304/month). Minnesota's top marginal rate is 9.85%, and at $80K you're in the 6.8% bracket. This gap widens at higher incomes: at $150K the difference exceeds $7,000/year. South Dakota's proximity to Minnesota makes it a popular destination for Minnesotans seeking tax relief.

Q: Why does South Dakota have no state income tax?

South Dakota has never had a state income tax in its history since statehood in 1889. The state constitution prohibits a state income tax, making it one of the most firmly entrenched no-tax states. South Dakota funds itself through sales tax (4.2% state rate), property taxes, federal transfers, and revenue from tourism (including the famous Mount Rushmore and Badlands). The state's conservative fiscal culture and relatively small population make the no-income-tax model sustainable.

Zero state income tax. No corporate income tax either. Your $80K salary becomes $64,831 — and moving from Minnesota saves $3,652/year in state tax alone.

2026 federal tax rates · Updated April 2026

Gross annual salary

Pay frequency

Filing status

South Dakota has no state income tax — your only deductions are federal and FICA. No state payroll taxes beyond federal. One of only 9 no-income-tax states, and uniquely has no corporate income tax either.

Take-home per paycheck (biweekly)

$2,493.50

Gross pay (annual)$80,000

Deductions (annual)

Federal income tax−$9,049

Social Security (6.2%)−$4,960

Medicare (1.45%)−$1,160

South Dakota state income tax$0

Summary

Annual take-home$64,831

Effective tax rate19.0%

You keep per dollar81 cents

Calculate for other states

Minnesota Wyoming North Dakota Nebraska Nevada Texas Florida Tennessee Iowa

South Dakota Paycheck Calculator 2026 · Updated April 2026

How to Use This Calculator

Tab "Take-Home Pay"

Enter your gross annual salary, pay frequency, and filing status. Because South Dakota has no state income tax, the calculator only deducts federal income tax and FICA (Social Security + Medicare). Under "More options," add 401(k) contributions and health insurance premiums to see the impact of pre-tax deductions. You'll see your per-paycheck take-home and an annual summary with your effective tax rate.

Tab "Tax Breakdown"

A visual pie chart showing exactly where your money goes. With South Dakota's zero state tax, there is no state slice in the pie — just federal income tax, Social Security, and Medicare. The chart makes it clear how much of your paycheck you actually keep compared to high-tax neighboring states like Minnesota.

Tab "Compare Filing Status"

See how South Dakota compares to neighboring Minnesota and North Dakota for take-home pay on the same salary. The comparison shows federal tax, state tax, and total take-home for each state so you can see the exact dollar difference. Especially useful if you're considering a move from Minnesota or other high-tax Midwest states.

The Formulas

Federal Income Tax (2026 brackets, progressive):
1. Start with gross annual salary
2. Subtract pre-tax deductions (401k, health insurance)
3. Subtract standard deduction ($15,750 Single / $31,500 MFJ / $23,500 HoH)
4. Apply progressive brackets: 10%, 12%, 22%, 24%, 32%, 35%, 37%

South Dakota State Tax:
SD state income tax = $0.00 (zero, always)
No local income taxes. No state disability insurance. No state payroll taxes on employees.
South Dakota also has no corporate income tax — unique among the 9 no-income-tax states.

FICA (Federal Insurance Contributions Act):
Social Security = 6.2% x min(Gross wages, $184,500)
Medicare = 1.45% x Gross wages
Additional Medicare = 0.9% x max(0, Gross wages - $200,000)

Take-Home Pay:
Net = Gross salary - Federal tax - Social Security - Medicare - Pre-tax deductions
(No state tax term — South Dakota contributes $0 to the equation)

All figures use 2026 IRS rates: SS wage base $184,500 (SSA), tax brackets from Rev. Proc. 2025-32, TCJA rates made permanent by OBBBA. South Dakota has never had a state income tax since statehood in 1889, and the state constitution prohibits implementing one.

Example

Jake — Software Developer in Sioux Falls, South Dakota

Filing Single. $80,000/year salary. Paid biweekly (26 paychecks). No pre-tax deductions.

Gross salary (annual)$80,000

Federal income tax-$9,049

South Dakota state tax$0

Social Security (6.2%)-$4,960

Medicare (1.45%)-$1,160

Annual take-home$64,831

Per paycheck (biweekly)$2,493

Federal taxable income = $80,000 - $15,750 (standard deduction) = $64,250. Federal tax: 10% on first $11,925 + 12% on next $36,550 + 22% on remaining $15,775 = $1,193 + $4,386 + $3,471 = $9,049. FICA: $4,960 (SS) + $1,160 (Medicare) = $6,120. Total deductions: $15,169. Jake keeps 81.0% of his gross salary — the same as someone in Nevada, Texas, or Florida earning the same amount. If he moved from Minnesota, he'd save roughly $3,652/year in state taxes alone.

Frequently Asked Questions

Why does South Dakota have no state income tax?▼

South Dakota has never had a state income tax in its entire history since becoming a state in 1889. More significantly, the South Dakota Constitution explicitly prohibits a state income tax, making it one of the most permanently no-tax states in the country. The state funds itself primarily through sales tax (4.2% state rate plus local additions up to around 2%), property taxes, federal transfers, and tourism revenue from attractions like Mount Rushmore, the Badlands, and Wall Drug. South Dakota's fiscal conservatism and relatively lean state government have made the no-income-tax model sustainable for over 135 years.

How much do I save by living in South Dakota vs Minnesota?▼

On an $80,000 salary filing single, a South Dakota resident takes home $64,831 while a Minnesota resident takes home about $61,179 — a difference of roughly $3,652 per year ($304/month). Minnesota's income tax brackets range from 5.35% to 9.85%, with the 6.8% bracket starting at $31,690. At higher incomes, the gap widens: at $150K a South Dakota resident saves about $7,400/year vs Minnesota, and at $250K the savings exceed $14,000/year. This explains why many Minnesota professionals — especially remote workers — relocate to Sioux Falls or the South Dakota side of the Twin Cities metro to cut their tax bills.

Does South Dakota have any hidden payroll taxes or fees?▼

No hidden payroll taxes are deducted from employee paychecks in South Dakota. The state has no disability insurance, no paid family leave contributions, and no state-level payroll deductions of any kind. Your pay stub will show only federal income tax withholding, Social Security (6.2%), and Medicare (1.45%) — plus any voluntary deductions like 401(k) or health insurance premiums. South Dakota is one of the cleanest paycheck states in the country from a tax deduction perspective.

Is South Dakota a good state for remote workers?▼

South Dakota has become one of the top destinations for remote workers since 2020. Key advantages: zero state income tax (saves $3,000-$10,000+/year depending on income), no corporate income tax (useful for self-employed and small business owners), low cost of living (Sioux Falls median home price is roughly half of Minneapolis), and no state estate or inheritance tax. The Sioux Falls metro area has seen significant population growth from remote workers, particularly from Minnesota, Illinois, and California. Internet infrastructure in major SD cities is solid, and the state has a low cost of living combined with minimal tax complexity.

Are all no-income-tax states the same for paychecks?▼

For W-2 employees, yes — South Dakota, Texas, Florida, Nevada, Wyoming, Tennessee, Alaska, and New Hampshire (on wages) all produce the same take-home pay on the same salary because none deduct state income tax from wages. Washington has a small Paid Family and Medical Leave deduction but no income tax. South Dakota stands out because it also has no corporate income tax — making it uniquely attractive for business owners, LLC operators, and the self-employed. The differences between no-tax states show up in property taxes (Texas is high, South Dakota is moderate), sales taxes (South Dakota's 4.2% + local is mid-range), and cost of living.

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