Gov. McMaster announces significant cut in unemployment insurance tax rates

COLUMBIA, S.C. — South Carolina Gov. Henry McMaster announced that next year’s unemployment insurance tax rates will decrease or stay the same.

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They are projected to be 40 million less than this year, which is the largest percentage cut since 2011.

The governor said the tax cuts will give employers more room to hire and expand.

“During every year of my administration, we have lowered or maintained UI business taxes, and 2026 will bring the largest reduction yet,” said McMaster in a news release. “South Carolina continues to attract jobs and investment because we focus on creating the most competitive and business-friendly climate in the country. These tax cuts give employers more room to hire, expand, and invest, which strengthens our economy and creates new opportunities for our people.”

Facts:

Any business that had no UI benefit charges from July 1, 2022, through June 30, 2025, is assigned to tax class 1 and pays 0.06%.
New businesses with less than 12 months of accomplished liability will pay the new employer tax rate of 1.0%.
2026 rates are lower than last year for businesses in tax classes 2 through 19. The average savings for businesses in tax classes 2 through 19 is 34.7%.

Click here for the 2026 unemployment insurance tax rate table.

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