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.
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 |
Other Taxes & Obligations
State Disability Insurance (SDI): Hawaii requires contributions to a disability insurance program. This provides short-term benefit payments to eligible workers who suffer a loss of wages due to non-work-related illness, injury, or pregnancy. Check with the state for current rates and wage base limits.
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:Hawaii Department of Taxation
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