Payroll That Expands for One Week
A Sturgis bar with a handful of year-round employees may hire dozens of bartenders, servers, security staff, cooks and parking attendants for the rally. Many come from out of state, some return every year and all of them need to be paid correctly within a few weeks. South Dakota has no state income tax withholding, so there is no state withholding for work done here, but federal payroll rules apply to every worker. BOMCAS runs payroll for Sturgis employers remotely.
Statewide employer setup is covered under payroll in South Dakota, and this page deals with rally hires, tips and out-of-state staff in Sturgis.
Hiring Rally Staff
Each temporary employee needs Forms W-4 and I-9 before or on the first day, with I-9 documents checked within three business days. New hires must be reported to the state. Setting up rally staff in the payroll system in July, with pay rates and tip arrangements agreed in advance, avoids a scramble during the event.
Employees or Contractors
Bartenders, servers and security staff who work your schedule, at your venue, under your direction are usually employees, even if they only work ten days. Paying them as contractors can lead to back payroll taxes and penalties. Bands and independent entertainers are usually contractors. We review each role before the rally.
Tips
Rally tips can be large. Tipped employees must report tips to the employer, and the employer withholds and pays Social Security and Medicare on reported tips. Employers can claim the FICA tip credit on the federal return. Employees may also be able to deduct qualified tips under the recent federal deduction for 2025 through 2028, which makes accurate tip reporting on W-2s more important.
Out-of-State Workers
Workers who live in states with an income tax and come to Sturgis for the rally do not owe South Dakota tax on rally wages, but their home state usually taxes all of their income, including rally pay. Employers are not generally required to withhold the home state's tax for work done in South Dakota.
Unemployment Insurance
Temporary rally workers are generally covered employment, and their wages count toward the employer's South Dakota reemployment assistance account up to the taxable wage base. Federal unemployment tax also applies.
Final Pay
When the rally ends, final pay should be issued on the next regular payday. We process final checks or direct deposits for all temporary staff and keep addresses for year-end W-2s.
Year-Round Employers
Sturgis clinics, contractors, retailers and service businesses have stable staff. We run regular pay periods, handle benefits deductions and prepare quarterly and annual filings.
What We Handle
- Pay runs for year-round and rally staff.
- Tip reporting.
- Federal deposits and Forms 941 and 940.
- State reemployment assistance reports and new-hire reporting.
- W-2s and 1099s.
Housing and Meals for Staff
Some rally employers provide housing or meals to workers who travel in. Lodging provided on the business premises for the employer's convenience and as a condition of employment can be excluded from wages, but cash housing allowances are taxable. Meals and lodging arrangements should be documented before the rally.
Security Staff
Security guards hired directly are employees; those supplied by a licensed security company are paid through that company. Contracts should make clear who is the employer.
Year-End
We reconcile quarterly returns to annual totals and send W-2s to all rally staff by January 31, using updated addresses collected at final pay.
Returning Staff
Many rally workers come back each year. Keeping them in the payroll system as inactive, with their W-4 and I-9 on file, saves time, although a new W-4 is useful if their situation changed. I-9s must be kept for three years after hire or one year after employment ends, whichever is later.
We also send a reminder each June to confirm rally pay rates and staffing.
Sturgis Payroll Questions
Are rally bartenders employees?
Usually yes, if they work your schedule at your venue under your direction.
Do I withhold state tax for workers from other states?
Not for work done in South Dakota. Their home state may tax their pay.
How should tips be handled?
Employees report tips to you, and you withhold and pay Social Security and Medicare on reported tips.
When is final pay due?
On the next regular payday after employment ends.
Talk to BOMCAS About Payroll in Sturgis
Pay runs post to the ledger, wages appear on the business return, bonuses after a strong rally are part of planning, missed deposits go through late filing, staff can get help with their own returns, bars keep gross receipts tax current, and Canadian workers raise cross-border issues. We also keep South Dakota pages on business returns, personal returns, sales tax, bookkeeping, tax planning, back taxes and cross-border tax for work anywhere in the state, all under the state overview.
Tell BOMCAS about your Sturgis business or household and we will reply with next steps and what we need for a quote. Use the contact page or the form below, phone 780-667-5250 or email info@bomcas.ca. Every Sturgis service is listed on the Sturgis overview. This page is general information, not advice for your situation.