Hawai’i Salary Paycheck Calculator
Luaus, sand, surf, and sun. What’s not to love about Hawai’i? Although you may love living on the magical Hawaiian islands, you may not love payroll taxes. Don’t worry. We’ve got you covered with answers to your most frequently asked Hawai’i payroll questions.
Hawai’i state payroll taxes
Does Hawai’i have a personal income tax?
Yes. Hawai’i uses a progressive tax system with rates ranging from 1.4% to 11.0%.
With different tax rates, how do I know how much to withhold from my employees’ paychecks?
The withholding amount is based mainly on the number of allowances that an employee claims.
Using Form WH-4, Hawai’i Employee’s Withholding Allowance and Status Certificate, each employee will notify you of their withholding allowances.
Based on this information and tax tables, or a lengthy formula, you can calculate the amount to take out of their paychecks. Fortunately, payroll software will take the guesswork out of the calculations for you with just a few clicks of the mouse!
If your employee doesn’t provide a Form WH-4, you’ll need to withhold tax as if the employee is single and they claimed no allowances.
Do my employees need to complete a Form WH-4 each year?
No. A new Form WH-4 is only necessary when the number of allowances changes, possibly changing the employee’s tax liability. And it’s a good idea for them to review it annually.
Employees need to provide a new form to you within ten days of the change so you can adjust the withholding quickly.
When is the Hawai’i withholding tax due?
The amount of tax you withhold each year will determine how often you need to pay. Payment frequencies are:
|Hawai’i Withholding Tax Payment Frequency|
|Annual Withholding Amount||Payment Frequency|
|$5,000 – $40,000||Monthly|
If your withholding tax liability exceeds $40,000, you are required to submit your payments electronically.
What payroll tax forms do I need to file in Hawai’i?
All employers will need to file a quarterly payroll tax return on Form HW-14, Withholding Tax Return, which is due by the 15th of the month following the calendar quarter’s end.
All employers must file an annual summary report on Form HW-30 Employer’s Annual Transmittal of Hawai’i Income Tax Withheld from Wages. Form HW-30 is due by the last day in February for the prior year.
Does Hawai’i have an unemployment tax?
Yes. For 2022, employers pay Hawai’i unemployment tax on the first $51,600 of an employee’s wages.
To set tax rates, Hawai’i uses a system of schedules from “A” to “H.” For 2022, they are using schedule D, with a maximum rate of 5.8% and new employers pay a 3% rate.
Unemployment tax in Hawai’i is paid each quarter to the Hawai’i Unemployment Insurance Division.
What is the salary threshold in Hawai’i? What is the minimum wage in Hawai’i?
Because the state of Hawai’i doesn’t have its own salary threshold, it adheres to the federal salary threshold, which is now $684 per week (equivalent to $35,568 per year for a full-year worker). The Department of Labor permits employers to count some bonuses, commissions, and other incentive payments toward meeting the standard salary level (up to 10%). Employees who earn at least $107,432 per year may qualify as “highly compensated.” See this Department of Labor fact sheet for details.
How many employees are needed to require Workers’ Compensation insurance in Hawai’i?
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.
Are there other Hawai’i paycheck rules and laws I should know?
Keep in mind the following paycheck rules.
New hires – Employers are required to report new or rehired employees to the state directory
within 20 days of employment by submitting the employees’ Form W-4.
Pay frequency – Employees need to be paid at least twice a month.
Final paychecks – When an employee quits or resigns, in general, you must provide the final paycheck no later than the next scheduled payday. If you fire or lay off an employee, you will need to give the employee their final pay no later than the first workday after letting the employee go.
Temporary Disability Insurance – With exceptions, employers must provide Temporary Disability Insurance for eligible employees who cannot work due to an injury or illness that is unrelated to work.
You have the option to pay for the entire cost or share it with the employee. However, you can only deduct half the premium cost but not more than 0.5% of an employee’s weekly wages, up to a maximum of $5.60 per week.
Prepaid Health Care – With a few exceptions, employers with at least one employee must provide prepaid health care.
Family and Medical Leave – Employers with a least 100 employees need to provide employees with family and medical leave – with up to four weeks of unpaid leave each year for the birth or adoption of a child or to care for a child, parent, or spouse.
Federal payroll taxes in Hawai’i
What is FICA tax?
The Federal Insurance Contributions Act, or 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.
|FICA Tax for 2022|
|Medicare tax (each party pays)||1.45% on all of an employee’s wages in 2022|
|Social Security tax (each party pays)||6.2% on the first $147,000 of each employee’s wage in 2022|
Do I need to withhold federal income tax from my employees’ pay?
Yes, unless an employee is exempt from federal income tax withholding. You’ll know whether they are exempt after they complete Form W-4.
Have your employees complete Form W-4 when they begin working for you. The information on Form W-4 will help determine how much tax you’ll take out of your employees’ paychecks. Items such as tax filing status and the number of dependents affect how much tax they will pay.
Keep the Form W-4s with your payroll records—no need to send them to the IRS.
Are there other federal payroll taxes I need to be aware of?
You’ll need to pay federal unemployment tax, and some of your employees may need to pay the Additional Medicare tax.
Additional Medicare tax
Some of your employees may need to pay the Additional Medicare tax. If you have any
employees who earn more than $200,000 per year, you’ll need to withhold 0.9% on the excess.
Federal unemployment tax
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.
How do I pay these federal taxes to the IRS?
The Internal Revenue Service requires you to pay these taxes annually, quarterly, monthly, or semi-weekly depending on the amount of tax you owe.
FICA, federal income tax, and the Additional Medicare tax are paid most frequently, either monthly or semi-weekly. But, each quarter, you will have to provide a summary on Form 941, Employer’s Quarterly Federal Tax Return.
Federal unemployment tax is generally paid annually using Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return. Quarterly payments are required for employers with a tax of $500 or more.
Hopefully, you’re feeling the aloha spirit about your Hawai’i payroll. You can always check out Gusto’s Hawai’i Salary Paycheck Calculator to see how all of these taxes work.
But if you’d instead be surfing rather than cutting employee paychecks, call on a qualified professional to help you.