Hawaii payroll taxes and calculator for employers (2026)

Hawaii's employer mandates: TDI, health care and a big wage base

Three Hawaii laws, all handled by DLIR's Disability Compensation Division, cover workers comp, Temporary Disability Insurance (TDI) and Prepaid Health Care (PHC). Workers comp applies from your first employee, full-time or part-time; check the division's pages for the exact TDI and PHC eligibility rules, which our research did not record.

TDI: you buy it, the worker can share it

You arrange TDI coverage and pay the premium. You may withhold up to half the premium, but no more than 0.5% of the employee's weekly wages. For 2026 the maximum weekly wage base is $1,500.21, so the most you can deduct is $7.50 a week.

Prepaid Health Care: the employee share is capped

Under PHC the employee's share of health coverage can be no more than 1.5% of wages. The employer pays the remainder. On a $50,000 salary that caps the worker at $750 a year, whatever the plan costs.

The second-highest UI base in our data

Only Washington's base is higher in our state SUTA table. At $64,500, Hawaii UI applies to the entire salary of anyone earning up to that amount. The Schedule C maximum is 5.60%; the US Department of Labor lists a 0.00% minimum. A 0.01% Employment and Training assessment is added on top.

Other Hawaii rules

• Pay at least twice a month, within 7 days after each pay period ends. Monthly pay needs the employee's election or a director exception (HRS 388).
• A fired worker is paid at discharge or by the next working day. A worker who quits with at least one pay period's notice is paid at quitting; without notice, on the next payday (HRS 388-3). HRS 388-3 is cited in our notes without a saved official page, so check it on the legislature site.
• Minimum wage is $16.00. The tip credit is only $1.25 ($14.75 cash), and only if wages plus tips are at least $7.00 above the minimum.
• Supplemental wages use the aggregate method, not a flat rate, and the withholding tables change every year through 2031.

Hawaii employer payroll facts at a glance

Registering to run payroll in Hawaii

1. Get your federal EIN.
2. Register for withholding with the Hawaii Department of Taxation. The 2026 tables are in Booklet A (posted as 25BkltA.pdf, effective December 5, 2025 for 2026 withholding).
3. Register with the DLIR Unemployment Insurance Division through its online Employer Registration.
4. Arrange TDI coverage, a Prepaid Health Care plan and workers comp before the first employee starts. DLIR's Disability Compensation Division oversees all three.
5. Report new hires within 20 days (HRS 576D-16(a)).

The small business health insurance guide covers how plan costs are quoted, which matters more in Hawaii because coverage is required.

Hawaii employee cost at $50,000

Payroll taxes alone for a new Hawaii employer:

That is $5,072 in taxes, or 10.14% above salary, before insurance. UI is the reason: at 2.40% on the full $50,000, Hawaii's state line is seven and a half times Arizona's $160. Then add the TDI and health premiums, which depend on your carrier. The employee can be charged at most $250 a year for TDI (0.5% of wages) and $750 for health coverage (1.5%).

The calculator shows federal taxes and Hawaii UI. For a budget that includes benefits, see what payroll costs and workers comp pricing.

Payroll services and PEOs in Hawaii

For Hawaii payroll, the service needs to deduct TDI within the 0.5% and $7.50 weekly caps and keep the PHC employee share under 1.5%. Gusto Simple is $49 a month plus $6 per person (checked October 16, 2026). Our payroll software rankings list published prices for others.

Because Hawaii requires health coverage, a PEO's group plan can be the main reason to use one. Hawaii is on Harbor Compliance's private list of states that license PEOs, which we have not matched to a Hawaii regulator. Compare PEOs ranked by score and PEO pricing.