Accurate storm surge modeling is essential for predicting coastal flooding and mitigating impacts on vulnerable regions. This study evaluates the influence of different sea surface drag parameterizations on surge predictions using the Global Tide and Surge Model (GTSM) over a 10-year period (2006–2015) and two storm events. Four model experiments were tested, ranging from a fully dynamic formulation, including variable air density, atmospheric stability, and sea-state-dependent drag, to a simplified constant-drag approach. Results show that advanced drag formulations reduced the underestimation of annual maximum surge values from 18% to 12% globally, with the variable Charnock parameter contributing the most. Conversely, using a constant Charnock value and thereby neglecting wave-dependent roughness increases prediction errors, especially in regions with highly variable sea states. Case studies of Storm Xaver (2013) and Hurricane Fiona (2022) show that advanced parameterizations better capture wind stress variations, reducing root mean square error from 0.21 m to 0.16 m for Xaver and improving surge predictions by up to 0.30 m for Fiona. Consistent with earlier studies, a persistent underestimation of extreme surge events remains across all experiments. While wave-dependent roughness improves performance, no single parameter fully explains this bias. However, wave-dependent roughness particularly enhances model performance in high-latitude and storm-prone areas, where sea state and atmospheric conditions vary widely. Our results show that variations in air density and atmospheric stability have minimal impact on surge height. As such, prioritizing the implementation of dynamic, sea-state-dependent drag formulations, particularly variable Charnock, is key to further improving the accuracy of storm surge forecasting systems and future projections.