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Updated: June 21, 2023
In Hawaii, everything is a little bit more laid back. The sun’s out, the surf’s up, and life is good. That’s why you started a small business in The Aloha State. However, whether you own a surf shop in Honolulu or a bed & breakfast in Maui, there’s one thing that isn’t laid back whatsoever: payroll taxes.
We want you to focus on your business without having to worry about payroll taxes, so we’ve designed a nifty payroll calculator that can figure out all of the federal and Hawaii state payroll taxes for you and your employees. All you have to do is input wage and W-4 information for each employee into the calculator, and it will do the rest of the work for you.
First of all, let’s give Uncle Sam his due. Here’s a quick rundown of the components that go into federal tax withholdings. For a more detailed explanation on all of the steps below, head on over to our comprehensive step-by-step guide.
Now that we’re done with federal taxes, let’s look at Hawaii state income taxes. Hawaii charges a progressive income tax, broken down into a whopping 12 tax brackets, and they range from 1.4% on the low end to 11% on the high end. Employees who earn more than $200,000 a year will hit the highest tax bracket.
As an employer in Hawaii, you have to pay unemployment insurance to the state. The 2023 tax rates range from 1.7% to 6.2% on the first $56,700 in wages paid to each employee in a calendar year.
If you’re a new employer (congratulations!), you pay a flat rate of 4%.
In addition, you are responsible for paying what’s called the Employment and Training Assessment (E&T) Rate, which is 0.01%.
For the complete SUI tax rate schedule, head on over to the official State of Hawaii unemployment insurance website.
That’s all she wrote! You’ve checked it off your to-do list so you can move onto the important things. Once each employee’s net pay is calculated (after taking deductions and withholdings into consideration), you’re in the clear.
All you have to worry about is getting your employees paid on time as well as setting aside whatever you owe in FICA and unemployment taxes. Those numbers can add up quickly!
You will need to fill out Form 941 to file federal taxes on a quarterly basis, and complete Form 940 to report your annual FUTA liabilities. You can pay taxes online using the EFTPS payment system. All the IRS employment tax due dates can be found here.
As if that wasn’t enough, here are some helpful links that can if you would like to learn more about Hawaii payroll taxes:
Department of Taxation (800) 222-3229 | Register Your Business | Withholding Tax
Department of Labor and Industrial Relations (808) 586-8915 | Unemployment Insurance Express | Employer Website
These rates are based on local legislation and can change at any time. Always consult a tax professional if you are unsure about your obligations.
Employers in Hawaii can use the calculator at the top of this page to quickly figure out their employees’ gross pay, net pay, and deductions (and feel confident when cutting paychecks). That being said, there can be times when companies need to delve a little deeper into the numbers. For example, do you occasionally reward your top-performing employees with bonuses? Remember that these payments are supplemental wages in the eyes of the IRS and require taxes to be withheld. Additionally, you may need to calculate an employee’s final paycheck if they take a position with another company. So, if you can use a little more help managing the math, check out some of the calculators listed below.
Try OnPay out yourself to see how easy payroll and HR can be. To get started, just share a few basic details about your business. Our team of pros will set everything up and import your employees’ information for you.