South Dakota unemployment tax reporting runs on a quarterly cycle through the Department of Labor and Regulation. If your business is liable, you file the Employer’s Reemployment Assistance Quarterly Report (Form 21), pay tax on the first $15,000 of each employee’s wages at your assigned rate, and submit by the last day of the month following each quarter. A report is required every quarter you have an active account, even one where you paid no wages at all.
When You Have to Register and File
You become a liable employer under one of two tests. Either you paid $1,500 or more in total wages during any calendar quarter in the current or preceding year, or you had at least one worker on payroll for any part of a day during 20 different weeks in either year, whether or not those weeks were consecutive or involved the same person.1South Dakota Legislature. South Dakota Codified Law 61-1 – Definitions and General Provisions Most businesses with any regular employee cross one of those lines quickly.
Once you meet either threshold, register with the Reemployment Assistance Tax Unit. Online registration through the Department of Labor and Regulation generates your account number and assigned tax rates immediately. You can also mail the Employer’s Registration Application (Form 1).2South Dakota Department of Labor and Regulation. Reemployment Assistance Forms Registering late doesn’t erase the liability. You’ll owe back taxes with interest from the quarter you first qualified.
2026 Rates and the Taxable Wage Base
Your rate has three components: the base reemployment assistance (RA) tax, an investment fee, and an administrative fee. New employers pay a flat combined rate until they build an experience record. For 2026:3South Dakota Department of Labor and Regulation. Reemployment Assistance Tax FAQ
- First year: 1.20% RA tax, 6.00% investment fee, and 0.55% administrative fee, for 7.75% total.
- Second and third years: 1.00% RA tax, 3.00% investment fee, and 0.55% administrative fee, for 4.55% total.
After three full years of reporting, the state assigns an experience-based rate tied to your reserve ratio, which compares what you’ve paid into the system against what former employees have collected in benefits. Employers with few or no claims can see the RA tax component drop as low as 0%. Heavy claims history can push it above 9%.4South Dakota Legislature. South Dakota Codified Law 61-5 – Contributions The state recalculates these rates annually using data through June 30 of the preceding year.
Whatever your rate, tax applies only to the first $15,000 of each employee’s wages per calendar year. Pay above that ceiling for the same employee in the same year is not taxable for reemployment assistance purposes.
What the Quarterly Report Requires
Form 21, the Employer’s Reemployment Assistance Quarterly Report, is the filing itself.5South Dakota Department of Labor and Regulation. Employer’s Reemployment Assistance Quarterly Report Before you start, gather:
- Your Department of Labor and Regulation registration number, which identifies the account on every filing.
- For each employee who worked during the quarter: full legal name, Social Security number, and total gross wages paid. Gross wages means everything before deductions, including salaries, commissions, bonuses, and tips.6Legal Information Institute. South Dakota Admin. R. 47:06:02:04 – Employer’s Wage Report
- A monthly headcount: the number of covered workers who worked during or received pay for the pay period that includes the 12th of each month in the quarter.7South Dakota Department of Labor and Regulation. Employer Handbook
The monthly headcount doesn’t change your tax bill, but the state uses it for labor market statistics and inaccuracies can flag your account for follow-up.
How to File
The Department of Labor and Regulation directs employers to file through its Internet Quarterly Wage Reporting System. You enter employee wage data, review it, and submit. The system generates a confirmation that serves as your receipt for timely filing.8South Dakota Department of Labor and Regulation. Reemployment Assistance Tax – Wage Reporting A blank copy of Form 21 is posted on the Department’s forms page if you want to see the layout before entering data online.
One detail trips up employers: you must file for quarters when you had no employees and paid no wages. A zero-wage report satisfies the requirement. Skipping the filing because nothing happened is still a late report, and the penalty applies whether or not any tax was owed.8South Dakota Department of Labor and Regulation. Reemployment Assistance Tax – Wage Reporting
Deadlines and Late Penalties
Reports and payments are due the last day of the month after each quarter ends:8South Dakota Department of Labor and Regulation. Reemployment Assistance Tax – Wage Reporting
- January through March: April 30
- April through June: July 31
- July through September: October 31
- October through December: January 31
Missing a deadline triggers two separate $25 penalties, one for the late report and one for the late payment, each assessed per month or partial month the filing remains overdue. Interest also accrues at 1.5% per month on the unpaid tax balance from the original due date.8South Dakota Department of Labor and Regulation. Reemployment Assistance Tax – Wage Reporting
You can pay electronically when filing online, or mail a check with a payment coupon. The coupon ensures funds are applied to the correct account and quarter.
How This Connects to Federal Unemployment Tax
If you owe South Dakota reemployment assistance tax, you almost certainly owe federal unemployment tax (FUTA) too. FUTA applies to the first $7,000 of each employee’s wages at a gross rate of 6.0%.9Internal Revenue Service. Topic no. 759, Form 940, Employers Annual Federal Unemployment Tax Return Employers who pay their state tax in full and on time get a 5.4% credit, dropping the effective FUTA rate to 0.6%, or $42 per employee per year.
That credit can shrink if the state’s unemployment trust fund borrows from the federal government and doesn’t repay within two years, which triggers a “credit reduction.” South Dakota has historically maintained a solvent trust fund, and the U.S. Department of Labor publishes a list of potential credit reduction states each year, with the final determination in November.10U.S. Department of Labor. FUTA Credit Reductions – Unemployment Insurance Filing late at the state level can cost you at both levels.
Records to Keep
South Dakota law requires employers to keep accurate payroll records for at least four years and make them available for inspection by the Department of Labor and Regulation at any reasonable time.11South Dakota Legislature. South Dakota Codified Law 61-3 – Records, Reports, and Audits During an audit, expect the Department to request payroll registers, W-2s, 1099s, federal Forms 940 and 941, federal income tax returns, the general disbursement journal, check registers, cancelled checks, and invoices.12South Dakota Department of Labor and Regulation. Preparing for an Audit
A standard audit covers one calendar year, but auditors can go back up to six years and may extend further based on what they find.12South Dakota Department of Labor and Regulation. Preparing for an Audit The most common trigger is a mismatch between what you reported to the state and what appears on your federal filings. Keeping those numbers consistent is the simplest way to avoid a closer look. If an audit uncovers underreported wages, the Department assesses the unpaid tax plus the same penalties and interest that apply to late filings.