2026 · South Carolina
South Carolina severance pay tax
Federal 22% plus South Carolina's regular withholding. But that's withholding, not your tax. This works out what you owe.
South Carolina layoff at a glance
| State tax on severance | Regular withholding tables |
| State income tax | Graduated, up to 5.2% |
| Unemployment weekly max | $350 for up to 20 weeks |
| Unemployment taxed by South Carolina? | Yes |
How South Carolina withholds on severance
South Carolina has no single flat supplemental rate, severance is withheld using the regular tables, so the amount tracks your bracket. On top of that, the federal government withholds a flat 22% (37% over $1 million) and FICA, 6.2% Social Security up to the $184,500 wage base plus 1.45% Medicare.
South Carolina taxes income on a graduated scale topping out at 5.2%, so a large severance can be pushed into that top rate. If you also claim unemployment, South Carolina pays up to $350 a week for up to 20 weeks, and taxes it on the state return. That's the South Carolina layoff picture in one place, the severance tax here, the unemployment on its own South Carolina page.
Worked example: $40,000 severance in South Carolina
A single filer, $40,000 severance paid separately, with $60,000 of other 2026 income:
| Federal withholding (22%) | −$8,800 |
| FICA (Social Security + Medicare) | −$3,060 |
| South Carolina withholding | −$2,084 |
| Net check | $26,056 |
| What it costs in tax | $13,294 |
Over-withheld by about $650, expect roughly that back as a refund at filing. The withholding is a fixed rate; your actual tax is your marginal rate on the severance stacked on your other income.
Stacking South Carolina unemployment on top
South Carolina sizes your weekly check off your highest-earning quarter, up to $350 a week, among the lowest in the country (43th of 51). There is no separate dependent add-on. Benefits run up to 20 weeks.
| Weekly benefit range | $42 - $350 |
| How the amount is set | Off your highest-earning quarter |
| Maximum duration | 20 weeks |
| Waiting week | Yes, one unpaid week |
| Dependent allowance | None |
| Taxed by South Carolina | Yes |
Stacked together, that $40,000 severance nets about $26,056 and South Carolina's unemployment can add up to $7,000 over 20 weeks, about 8 months of a $4,000 budget before you need a paycheck. File through South Carolina DEW; nail down the exact figure in the runway calculator.
Questions about South Carolina severance tax
Is severance taxed higher in South Carolina?
No. It's withheld at a flat 22% federally and by South Carolina's regular tables, but it's taxed as ordinary income at your normal rates. The worked example on this page shows the gap in dollars: on a $40,000 severance, $8,800 of federal tax is withheld up front while the severance actually costs about $13,294 in tax for that filer. Whichever direction the gap runs, it settles up at filing, a refund if too much was taken, a bill to plan for if too little.
Does South Carolina tax my severance?
Yes, South Carolina taxes severance as wages. South Carolina has no single flat supplemental rate, severance is withheld using the regular tables, so the amount tracks your bracket.
Will I get a refund or owe more?
It depends on your bracket. The flat 22% over-withholds for lower earners (refund) and under-withholds for those in the 32 to 37% brackets (set aside the difference). The crossover sits where your marginal rate passes 22%: below it, every severance dollar was over-withheld and comes back; above it, the flat rate quietly under-collects and the difference lands on your return as a balance due. For the $40,000 example on this page with $60,000 of other income, the calculator's verdict is printed under the worked example. Enter your numbers above to see which way it goes for you.
Your South Carolina layoff toolkit
- South Carolina unemployment benefits weekly amount and duration
- Runway calculator how long your money lasts
- South Carolina paycheck calculator take-home at your next job
- South Carolina 1099 tax if you go freelance
An estimate for the 2026 tax year. State supplemental figures from the verified dataset, last verified 2026-07-24. Nothing you enter is stored. Not tax advice.