Hawaii Payroll & Paycheck Tax Calculator
Managing payroll in the Aloha State shouldn't feel like navigating volcanic terrain without a map. From Honolulu to Hilo, our Hawaii Payroll Tax Calculator makes calculating employee withholdings as refreshing as a trade wind breeze. Navigate state income tax, temporary disability insurance, and federal requirements with confidence—all in one user-friendly tool.
Hawaii Payroll Tax Steps
Hawaii’s progressive tax system and unique island requirements can make payroll feel as complex as the Hawaiian language. Our calculator helps you surf through Hawaii’s payroll requirements without wiping out, ensuring accurate calculations whether you’re on Oahu or the Big Island. Get precise withholdings faster than you can say “pau hana.”
Here are some key steps you’ll have to take to make smarter payroll decisions.
Step #1: Register with Hawaii Department of Taxation and DLIR
To hire employees in Hawaii, you'll need to register with the Hawaii Department of Taxation (DOTAX) for withholding taxes and the Department of Labor and Industrial Relations (DLIR) for unemployment insurance. Hawaii Tax Online makes registration as smooth as a perfect wave. Don't forget to register for Temporary Disability Insurance (TDI) as well.
New employers pay 2.4% unemployment tax on the first $56,700 of each employee's wages—one of the highest wage bases in the nation.
Step #2: Handle Hawaii's Comprehensive Form Requirements
The Aloha State requires several unique forms:
- Federal W-4 and Hawaii HW-4 forms for withholding
- Federal forms from the IRS: • Form 941 (Quarterly federal tax return) • Form 940 (Federal Unemployment Tax, FUTA) • W-2 and 1099 (Year-end wage reporting)
- New Hire Reports: Submit within 20 days to Hawaii New Hire Registry
- Workers' Compensation: Mandatory for all employers
- Form HW-14: Periodic withholding return
- Form HW-3: Annual reconciliation
- TDI enrollment and reporting
Hawaii's Temporary Disability Insurance program adds an extra layer to payroll that most mainland states don't have.
Step #3: Master Hawaii's Minimum Wage and Overtime Laws
Hawaii's minimum wage is $14.00 per hour as of 2024. Tipped employees can be paid $1.25 less than minimum wage, currently $12.75 per hour, if tips bring them to full minimum wage. Employers must track tip credits carefully to ensure compliance.
For overtime, Hawaii follows federal FLSA rules: 1.5x regular pay after 40 hours per week. No daily overtime requirements exist statewide, though certain industries may have specific requirements. Weekends and holidays don't automatically trigger overtime unless exceeding 40 weekly hours.
Step #4: Follow Hawaii's Pay Period and Leave Requirements
Hawaii requires employees to be paid at least twice monthly. Pay periods cannot exceed 16 days, and wages must be paid within 7 days after the end of each pay period. Most employers choose bi-weekly schedules for simplicity.
When employment ends, Hawaii requires payment immediately upon termination or by the next regular payday, whichever comes first. If an employee quits, final wages are due by the next regular payday.
Hawaii mandates several leave programs:
- Temporary Disability Insurance (TDI): Partially funded by employee withholdings
- Prepaid Health Care Act: Requires employer-provided health insurance
- Victims of domestic violence leave protections
Step #5: Use our Simple Hawaii Payroll Calculator
Hawaii's tax structure includes multiple components:
- Federal income tax withholding
- Hawaii state income tax (1.4% to 11% based on income—highest in the nation)
- TDI withholding (0.5% of wages up to the wage cap)
- FICA taxes (Social Security and Medicare)
- Unemployment taxes (FUTA and state UI)
Our calculator instantly processes all these elements, providing accurate calculations for gross pay, deductions, and net pay.
Step #6: Submit Taxes and File Hawaii Payroll Reports
Hawaii employers maintain various filing schedules:
- Periodic HW-14 returns (monthly, semi-monthly, or quarterly based on liability)
- Quarterly unemployment wage reports
- Annual HW-3 reconciliation by February 28
- TDI quarterly reports and payments
- Federal tax deposits and returns
Most employers file withholdings monthly through Hawaii Tax Online. After your initial period, unemployment rates adjust based on experience, ranging from 0.0% to 5.6%.
Fingercheck and any related entities do not offer tax, accounting, or legal advice. This content is designed for informational purposes only and should not be considered a source of tax, legal, or accounting advice. It is recommended that you consult your tax, legal, and accounting advisors before undertaking any related activities or transactions.