Payroll tax in Hawaii: What employers need to know [Updated 2026]
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Employers have many responsibilities when it comes to running a business, one of which is paying taxes. If you're hiring in the state of Hawaii, dealing with this obligation can be daunting. In addition to federal income tax and the FICA taxes levied by the IRS, such as Medicare taxes and Social Security contributions, business owners are also responsible for paying state payroll taxes.
The Aloha State has a progressive tax rate, which means the higher an employee's gross wages, the more taxes they pay. And similarly, if your business is growing and you're adding new hires to the team, your tax contributions will increase, as will the amount you take out of employees' paychecks.
It's crucial to understand the tax laws in the states where your employees live so you can avoid penalties. Whether you're running a mom-and-pop shop or a global company, if you have employees in Hawaii, you must master Hawaii payroll taxes, their rates, who owes what, and the deadlines to pay. Let's get started.
The 3 Hawaii payroll taxes
The state of Hawaii has three types of payroll taxes and obligations: state unemployment insurance tax, Temporary Disability Insurance (TDI), and state income tax. The Hawaii Department of Labor and Industrial Relations (DLIR) administers the former two, while the Hawaii Department of Taxation oversees the latter. According to the state's new hire reporting requirements, all employers must report each new hire as soon as possible and no later than 20 days after that employee's start date.
Below, we'll discuss each kind of Hawaii state payroll tax in more detail.
State unemployment insurance tax
Hawaii unemployment insurance (SUI) tax pays for the unemployment benefits of workers who lost their jobs due to layoffs or other circumstances beyond their control. The Hawaii Department of Labor and Industrial Relations manages the collection of SUI tax and determines the annual SUI tax rate. In 2026, new employers pay 2.40%. For experienced employers, the maximum SUI tax rate for 2026 is 5.60%. The taxable wage base for 2026 is $64,500 per employee per calendar year.
Under the terms of the Federal Unemployment Tax Act (FUTA), most Hawaii employers must also contribute to federal unemployment taxes as well as state ones.
Who pays | Employer |
|---|---|
Tax rate | New employers: 2.40% (2026) Experienced employers: 0.2%–5.60% |
Taxable wage limit | $64,500 per employee per year (2026) |
Maximum tax | $3,612 (5.60% × $64,500) |
Temporary Disability Insurance (TDI)
Hawaii requires all employers with one or more employees to provide Temporary Disability Insurance (TDI), which provides partial wage replacement to employees who become unable to work due to a non-work-related illness, injury, or pregnancy. Employers must either obtain TDI coverage through a licensed insurance carrier or qualify to be self-insured.
In 2026, the TDI weekly wage base is $1,500.21. Employers may withhold up to 0.5% of an employee's weekly wages, capped at $7.50 per week. The maximum weekly benefit an employee can receive is $871. Employers cover the remaining premium cost above the employee deduction. Benefits begin on the eighth day of disability and can last up to 26 weeks at 58% of the employee's average weekly wages.
Hawaii state income tax
State residents are also responsible for paying a Hawaii income tax. Unfortunately, the Aloha State is known for being pricey regarding state income taxes (although it makes up for it by not charging sales tax). Hawaii employers must ensure they are withholding the right amount of tax from each employee's paycheck. The Hawaii Department of Taxation is responsible for collecting and enforcing Hawaii's income tax. The tax rates are based on the information in each employee's withholding tax return form HW-4, not their filing status.
Who pays | Employee |
|---|---|
Tax rate | 1.4% to 11%, based on the employee's Form W-4 or Form HW-4 |
Taxable wage limit | No limit |
Maximum tax | No maximum |
Because Hawaii has a progressive income tax, its tax rates can vary widely. In 2026, the income tax rates range from 1.4% to 11.0% of an employee's wages. Navigating payroll tax laws can be challenging. This is especially true in Hawaii, with its progressive tax system, TDI requirement, and different types of state payroll taxes. But Rippling's payroll compliance software makes it easy, calculating and submitting your tax forms and payments on your behalf—and monitoring tax laws at the federal and Hawaii state levels to ensure you're always compliant. And if you're looking for even more support, Rippling PEO can register and maintain your state tax accounts for you, creating an even more seamless payroll tax process.
Payroll tax due dates in Hawaii
Hawaii employers must pay SUI taxes to the Hawaii Department of Labor and Industrial Relations (DLIR) on a quarterly basis. The deadlines are below:
First quarter (January-March): Due April 30
Second quarter (April-June): Due July 31
Third quarter (July-September): Due October 31
Fourth quarter (October-December): Due January 31
If one of these dates falls on a weekend or a legally recognized holiday, you must file your taxes by the next business day.
Hawaii state income tax due dates are based on the amount of an employer's annual tax withholding liability. If the amount of your annual tax withholding liability is under $5,000, you should make state income tax payments quarterly. If it's between $5,000 and $40,000, you should make them monthly. If it's above $40,000, you'll make them semi-monthly. Remember, you'll need to pay your state income taxes to the Hawaii Department of Taxation, not the DLIR.
How to submit payroll taxes in Hawaii
So far, we've covered the types of state payroll taxes and tax due dates. Now, we'll help you complete your tax filing responsibilities by reviewing how to submit your payroll taxes in the Aloha State.
Enroll in e-Services
Employers who are looking for a simple and secure way to manage their payroll taxes should check out the Hawaii Department of Taxation's convenient online portal, Hawaii Tax Online, where you can remit tax payments and manage your tax forms. You can even make ACH debit payments online using this portal without having to set up an account.
Rippling's full-service payroll software
Want an even simpler payment option? With Hawaii's high SUI wage base ($64,500 in 2026) and TDI obligations to track, Rippling's payroll software automatically calculates your payroll taxes, files them, and ensures you're always compliant with federal, state, and local regulations. Rest assured, your payroll taxes get paid at the right time with the IRS and the Hawaii Department of Taxation—every time.
Frequently Asked Questions
Are there local tax laws in Hawaii?
No, there are no local tax laws in the state of Hawaii.
What is Hawaii's TDI requirement for employers in 2026?
Hawaii requires all employers with one or more employees to provide Temporary Disability Insurance (TDI) coverage. TDI pays partial wages to employees who cannot work due to a non-work-related illness, injury, or pregnancy. In 2026, employers may withhold up to 0.5% of an employee's weekly wages, capped at $7.50 per week (based on the $1,500.21 weekly wage ceiling). The maximum weekly benefit an employee can receive is $871. Benefits begin on the eighth day of disability and can last up to 26 weeks at 58% of average weekly wages. Employers must provide TDI coverage through a licensed insurance carrier or qualify for self-insurance—failure to maintain coverage is a misdemeanor under Hawaii law.
Are nonprofit organizations subject to payroll taxes in Hawaii?
According to Chapter 415B of the Hawaii Revised Statutes, even if a nonprofit organization is registered under Section 501(c)(3) with the IRS and is therefore exempt from paying federal income tax, it doesn’t automatically qualify for an exemption from state income tax. Nonprofits that wish to be granted an exemption from Hawaii income tax need to fill out Form N-70NP and submit it to the Hawaii Department of Taxation.
Disclaimer
Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.
Author
Vanessa Kahkesh
Content Marketing Manager, HR
Vanessa Kahkesh is a content marketer for HR passionate about shaping conversations at the intersection of people, strategy, and workplace culture. At Rippling, she leads the creation of HR-focused content. Vanessa honed her marketing, storytelling, and growth skills through roles in product marketing, community-building, and startup ventures. She worked on the product marketing team at Replit and was the founder of STUDENTpreneurs, a global community platform for student founders. Her multidisciplinary experience — combining narrative, brand, and operations — gives her a unique lens into HR content: she effectively bridges the technical side of HR with the human stories behind them.
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