Overview
Hawaii has a progressive income tax system and is one of the few states that also requires both employee and employer contributions to a Temporary Disability Insurance (TDI) program. Hawaii’s tax rates are among the highest in the nation.
What Makes Hawaii Unique: Hawaii has one of the most complex income tax systems in the U.S., with up to 11 tax brackets and a top rate of 11%. Employers must also withhold for the state’s Temporary Disability Insurance (TDI) program.
State Income Tax (SIT)
Hawaii’s progressive income tax features multiple brackets with rates that can reach over 11% for the highest earners. Employees complete Form HW-4, specifying their filing status and total allowances. Hawaii also has special statuses for certified disabled persons and nonresident military spouses who are exempt from withholding.
| Tax Structure | Progressive with rates up to 11% |
| State Withholding Form | Form HW-4 |
| Filing Statuses | S, M, MH, D (Disabled), NMS (Military Spouse) |
| TDI | Temporary Disability Insurance (both employee and employer contributions) |
| SUTA Rate | 5.2% default for new employers |
Supplemental Wages
Hawaii supports the following supplemental calculation methods. Supplemental wages such as bonuses and commissions will be calculated using the applicable method.
Employer State Unemployment Tax (SUTA)
Your assigned SUTA rate will be based on your company’s experience with unemployment claims. New employers typically start at the default rate of 5.2%.
| Tax Type | Employer-paid only |
| Default New Employer Rate | 5.2% |
| Taxable Wage Base | $[XX,XXX] per employee, per year |
| Rate Assignment | Experience-rated; assigned annually by the state |
State Disability Insurance (SDI)
Hawaii requires employee contributions to State Disability Insurance (SDI). This is withheld from employee wages. Verify the current rate at https://tax.hawaii.gov/forms/a1_b3_5withholding/.
How to Set Up Hawaii Payroll Withholding
Follow these steps to begin withholding Hawaii payroll taxes for your employees:
- Obtain your Federal EIN at irs.gov
- Register with the Hawaii Department of Taxation at hawaii.gov/tax
- Register for SUTA and TDI with the Hawaii Department of Labor at labor.hawaii.gov
- Submit a Netchex tax team request to enable Hawaii SIT, SUTA, and TDI
- Have each employee complete their tax forms with an automated onboarding task in Netchex, digitally storing tax forms
- Configure any additional tax settings in the employee profile
Once setup is complete in Netchex, the system will automatically calculate, withhold, and remit all Hawaii payroll taxes on your behalf.
Hawaii Payroll Tax Filing Deadlines
The following are general filing and deposit deadlines for Hawaii payroll taxes. Deadlines may vary based on your employer size and deposit frequency. Always verify current schedules at Hawaii Department of Taxation.
| Tax | Deposit Frequency | Typical Due Date |
| SIT Withholding | Semi-monthly or Monthly | Varies by deposit schedule; see Hawaii HW-14 |
| Annual Reconciliation (HW-3) | Annual | February 28 |
| SUTA | Quarterly | April 30, July 31, Oct 31, Jan 31 |
Note: Deadlines are subject to change. Always confirm current requirements directly with Hawaii Department of Taxation at https://tax.hawaii.gov/forms/a1_b3_5withholding/.
Resources & Links
The following official resources will help you stay current on Hawaii payroll tax requirements:
Frequently Asked Questions: Hawaii Payroll Taxes
What is Hawaii’s top income tax rate?
Hawaii’s top marginal income tax rate is 11%, one of the highest in the nation.
What is Hawaii’s TDI program?
Hawaii’s Temporary Disability Insurance (TDI) requires employer and employee contributions to provide partial wage replacement for non-work disabilities.
What form do Hawaii employees complete?
Employees complete Form HW-4, the Hawaii Employee’s Withholding Exemption and Status Certificate.
What is Hawaii’s SUTA wage base?
Hawaii’s SUTA wage base is $56,700 per employee per year (2025). Verify at labor.hawaii.gov.
Does Hawaii have local payroll taxes?
No. Hawaii does not impose local payroll taxes.
Disclaimer: This content is provided for general informational purposes only and does not constitute legal, tax, or accounting advice. Netchex does not provide tax or legal guidance and makes no representations regarding the accuracy or applicability of this information. Laws and regulations may change. The information on this page reflects payroll tax guidelines as of March 2026. For the most current requirements, please refer to the Resources & Links section above.
Let Netchex Handle the Complexity
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