Key figures
Hawaii payroll
2026, with sources
Four programs beyond withholding
Hawaii stacks more employer programs on payroll than almost any state. Besides income tax withholding at graduated rates up to 11%, an employer carries unemployment insurance, Temporary Disability Insurance, Prepaid Health Care and workers’ compensation from the first employee.
- Unemployment insurance: 2.40% for new employers on $64,500, plus 0.01% E&T.
- Temporary Disability Insurance: employer-provided; employee share up to 0.5% of wages, $7.50 a week maximum.
- Prepaid Health Care: mandatory coverage at 20+ hours a week.
- Workers’ compensation insurance.
An example
A Delaware startup hires an engineer in Honolulu at $150,000. In 2026 it pays UI of 2.41% on the first $64,500 (about $1,554), withholds Hawaii income tax, deducts up to $7.50 a week for TDI and pays the rest of the TDI premium, and enrolls the engineer in a health plan after four weeks — paying at least half the premium, with the engineer’s share capped at 1.5% of monthly wages.
The minimum wage rose to $16.00 on January 1, 2026 and goes to $18.00 in 2028; because Prepaid Health Care eligibility is tied to the minimum wage, the monthly threshold rises with it.
Deadlines
- QuarterlyUnemployment insurance contributions and the E&T assessmentUI quarterly report
- After four consecutive weeks of employmentCoverage for employees working 20+ hours a weekPrepaid Health Care
The federal baseline
This page covers what Hawaii adds. The federal rules underneath it apply here too.
Common questions
What is TDI and who pays for it?
Temporary Disability Insurance is employer-provided coverage for off-the-job disability. The employer may withhold up to half its cost from the employee, but no more than 0.5% of weekly wages — $7.50 a week maximum in 2026 — and pays the rest.
Who has to get Prepaid Health Care?
Employees who work at least 20 hours a week and earn at least 86.67 times the minimum hourly wage a month ($1,386.72 in 2026) must get health coverage after four consecutive weeks. The employer pays at least half the premium, and the employee’s share is capped at 1.5% of monthly wages.
How Hawaii compares
- No tax on wagesStates with no state income tax on wagesHawaii: withholds state income tax. 9 of 51 states are on the list.
- Paid leave payrollStates with a paid leave or disability payroll programHawaii: state paid leave or disability program. 16 of 51 states are on the list.
- Local payroll taxStates with city, county or district payroll taxesHawaii: state-level only. 14 of 51 states are on the list.
Founder guides on this
- PeopleContractor or employee? Classification for startupsContractor or employee depends on control, not the contract. The IRS test, state rules, 1099s, payroll registration and the cost of getting it wrong.
- RunwayBurn rate and runway: how to calculate them correctlyGross burn, net burn and months of runway, done the way an investor checks them: from cash, averaged, and with the hires you’ve already committed to.
More of the Hawaii guide
- AccountingAccounting and state tax in HawaiiCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in HawaiiSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesPayables and contractors in HawaiiPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- ComplianceCompliance and filings in HawaiiRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in HawaiiCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
- Office of the Governor — Hawaiʻi’s minimum wage increases to $16.00 on January 1
- Hawaii DLIR — Unemployment insurance contribution rates and taxable wage base
- Hawaii DLIR Disability Compensation Division — 2026 maximum weekly wage base
- Hawaii DLIR — Highlights of the Hawaii Prepaid Health Care Law (rev. 2026.06)
- Hawaii DOTAX — 2025 Instructions for Form N-11 (individual rate schedules)
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.