South Dakota Workers Compensation Guide

Workers Compensation Requirements in South Dakota

South Dakota requires workers' compensation for virtually all employers. The South Dakota Division of Labor and Management oversees the system. South Dakota has among the lowest workers' comp rates in the nation, reflecting lower wages (which affect benefit amounts), lower medical costs, and a relatively efficient administrative system.

Workers Comp Rates in South Dakota

The average rate of approximately $1.48 per $100 of payroll is a statewide blended average — actual rates vary significantly by job classification.

For example, an employer with $1 million in payroll at the average rate of $1.48 per $100 would pay approximately $14,800 annually before experience modification adjustments.

Average Workers Comp Rates by City in South Dakota

What Makes South Dakota Unique

South Dakota consistently has some of the lowest workers' comp rates in the nation. This reflects both lower wage levels (temporary disability is wage-based), lower medical costs, and a lean administrative system. South Dakota's competitive market and efficient administration make it a favorable state for workers' comp costs.

Who Sets Workers’ Comp Rates in South Dakota

South Dakota is an NCCI state. NCCI files advisory loss costs and class codes, and each insurer applies its own approved multiplier, plus schedule credits or debits, to arrive at your rate. That’s why quotes on identical payroll and class codes can differ meaningfully in South Dakota, and why comparing carriers at renewal is worth the effort. Our blended estimate of about $1.48 per $100 of payroll hides an enormous range — clerical work is typically a small fraction of that, roofing many times more.

Workers Comp Benefits in South Dakota

South Dakota provides temporary total disability at 66.67% of average weekly wage. Permanent partial disability uses a schedule for specific body parts.

Employee Rights in South Dakota

South Dakota workers may choose their own treating physician. Disputes are handled by the Division of Labor and Management through an administrative process.

How to Reduce Workers Comp Costs in South Dakota

South Dakota's already-low rates can be reduced further through safety performance and experience modification improvement. Agricultural employers should confirm coverage requirements for farm labor. Sioux Falls's growing financial services and healthcare sectors benefit from lower hazard classifications.

Frequently Asked Questions

Does shopping lower workers’ comp premiums in South Dakota?

Usually, yes. South Dakota is an NCCI loss cost state, so each insurer applies its own multiplier and schedule credits to the same loss costs, and quotes on identical payroll can differ.

The information on this page is provided for general informational purposes only and reflects estimated industry averages and state requirements as of 2026. Workers compensation laws, rates, and requirements change frequently and vary significantly by employer size, industry, and job classification. Rate estimates shown are blended averages and do not represent actual quotes for any specific employer. Always consult a licensed workers' compensation insurance professional and your state's workers' compensation regulatory agency for current, employer-specific information.