Hawai’i Hourly Paycheck Calculator
Living in Hawai’i is paradise. With the tropical rainforests, sandy beaches, and active volcanoes, there’s something fun for everyone. However, processing Hawai’i payroll is one of those things that leaves something to be desired. We’ve written this quick recap of all the payroll taxes and paycheck rules in Hawai’i. But if you prefer to let someone else handle it, comprehensive payroll providers can take over.
State payroll taxes in Hawai’i
We’ll begin with Hawai’i state income tax, which all residents and some non-residents pay.
Hawai’i income tax withholding
Like many states, Hawai’i uses a progressive tax system. This means as your taxable income grows, so does your tax rate.
Hawai’i’s personal income tax rates start at 1.4% and go as high as 11.0%.
To compute the amount of tax to withhold from employees’ pay, use Form HW-4, Hawai’i Employee’s Withholding Allowance and Status Certificate. Withholding amounts largely depend on your employee’s number of allowances.
Have employees complete Form HW-4 when they begin working for you.If an employee doesn’t provide the Hawai’i form, you must withhold tax as if the employee is single and didn’t claim any allowances.
When an employee has a change in allowances, they should complete a new Form WH-4 within ten days.
Filing and paying Hawai’i withholding tax
How often you’ll have to pay depends on the average amount of income tax you withhold each year. You may have to pay quarterly, monthly, or semi-weekly.
|Hawai’i Withholding Tax Payment Frequency|
|Annual Withholding Amount||Payment Frequency|
|$5,000 – $40,000||Monthly|
Hawai’i requires all employers whose withholding tax liability exceeds $40,000 to pay electronically.
Regardless of your payment frequency, you’ll need to file quarterly summary reports with Form HW-14, Withholding Tax Return, by the 15th of the month following the end of the calendar quarter.
File annual withholding reports on Form HW-30, Employer’s Annual Transmittal of Hawai’i Income Tax Withheld from Wages, by the last day in February.
Hawai’i has a helpful booklet for employers that covers withholding tax in detail.
Hawai’i unemployment tax
In 2022, the first $51,600 of an employee’s earnings are taxable for unemployment in Hawai’i. Employers pay 100% of unemployment tax.
Hawai’i uses a system of schedules from “A” to “H” to set unemployment tax rates. For 2022, they are using schedule D, where the maximum unemployment tax rate is 5.8%, and new employers receive a 3% tax rate.
Each quarter you’ll need to file your unemployment tax report and pay the tax to the Hawai’i Unemployment Insurance Division.
Federal payroll taxes
All Hawai’i employers and employees pay various federal payroll taxes. There are four withholding taxes that you will send to the Internal Revenue Service:
- Federal income tax (FIT)
- Additional Medicare tax
- Federal unemployment tax (FUTA)
Taxes paid by both the employer and employee:
- Social Security and Medicare tax (FICA)
Federal income tax (FIT)
Use Form W-4 to determine the amount of federal income taxes to withhold from your employees’ paychecks. Employees should complete this form when hired and whenever they have changes that may impact the amount of tax they will owe.
Use the information on Form W-4 along with tax tables to compute the amount of tax to take out. To make it easier on you, payroll software can help with the math by making the calculations for you.
Don’t mail the W-4s to the IRS; just file them away in case of an audit.
Social Security and Medicare tax (FICA)
The FICA tax is made up of the Medicare tax and the Social Security tax.
In 2022, the Social Security tax requires employers and employees to each contribute 6.2% of wages up to $147,000. The Medicare tax requires each to contribute 1.45% of all wages. See the IRS webpage for details, like maximum thresholds.
Federal unemployment tax (FUTA)
Like the state, the federal government also has an unemployment tax. It’s called FUTA and it’s an annual tax employers pay on the first $7,000 of each employee’s wages. The FUTA rate for 2022 is 6%, but most employers only have to pay 0.6% each year.
Filing and paying Federal payroll taxes
You’ll need to send the withheld taxes and your portion of FICA to the IRS either monthly or semi-weekly, depending on how much tax you owe. And each quarter, you’ll need to do a summary report on Form 941, Employer’s Quarterly Federal Tax Return.
For federal unemployment tax, you’ll need to make quarterly payments if your tax is more than $500. If your tax is less than $500 a year, you can pay the tax when you complete your annual summary report on Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return.
Other Hawai’i paycheck laws
Here are some other paycheck laws in Hawai’i you should know about.
- New hires: Employers must report new or rehired employees to the state directory within 20 days of hire. The most common method to report new hires is by sending the employee’s Form W-4.
- Minimum wage: In 2022, the minimum wage in Hawai’i is $12 per hour.
- Overtime: Generally, overtime is paid when an employee works more than 40 hours a week. Overtime pay must be at least one and half times the regular hourly rate.
- Pay frequency: Pay employees at least twice every month.
- Final paychecks: If you let an employee go, you will need to give the final paycheck no later than the first workday following the discharge. If the employee quits, the employee’s last wages are generally due on the next regularly scheduled pay date.
- Workers’ Compensation insurance: Requirements to obtain Workers’ Compensation vary by state, this table outlines some of these requirements. If you determine that your company is required to purchase Workers’ Compensation insurance in your state, learn how to sign up for this insurance with Gusto. Sometimes, companies get a request for a workers’ comp audit—head to this article and click the workers’ comp audit reports dropdown for more information.
- Prepaid Health Care: Unless expressly excluded by law, all employers with one or more employees must provide prepaid health care.
- Temporary Disability Insurance: Unless excluded, employers must provide Temporary Disability Insurance for eligible employees who cannot work due to an injury or illness that happened outside of work. You can pay the full cost of the insurance or share it with your employee, with limitations.
Family and Medical Leave: If you have at least 100 employees, you’ll need to provide employees with up to four weeks of unpaid leave each year to welcome a new child or care for a child, spouse, or parent.