Employers have many responsibilities when it comes to running a business, one of which is paying taxes. 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.
Whether you’re running a mom-and-pop shop or a global company, Diamond Head Tax Group OAHU is here to help you in mastering Hawaii payroll taxes, their rates, who owes what, and the deadlines to pay!
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.
The Two Hawaii Payroll Taxes
The state of Hawaii has two types of payroll taxes: state unemployment insurance tax and state income tax. The Hawaii Department of Labor and Industrial Relations (DLIR) administers the former, 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.
New employers pay 4.0%, the tax rate for 2023, until the DLIR assigns them an experience rate and a new tax rate. The maximum SUI tax rate for 2023 for all other employers is 6.2%. The taxable wage base for 2023 is $56,700 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.
Hawaii State Income Tax
State residents are also responsible for paying a Hawaii income 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.
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
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.
Diamond Head Tax Group OAHU is Honolulu's Trusted Source for Filing Tax for Personal and Business. We also offer payroll services to make your work more efficient and handled by our expert consultants serving in and around Pearl City, Waipahu, Waikiki, Ewa Beach, Aiea, Kahala, Portlock, and other surrounding neighboring cities in Oahu.
Contact us and let our skilled OAHU Tax Experts offer their well-rounded tax advice and tailored tax solutions to help you file accurate tax reports. Diamond Head Tax Group is Honolulu's trusted source of tax filing services serving Waianae, Honolulu, Kapolei, Oahu and surrounding areas.
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