To calculate your net pay or take-home pay in Hawaii, enter your period or annual income along with the required federal, state, and local W4 information into our free online payroll calculator. Hawaii is subject to a 12-tax band, variable income tax system. State Income Tax rates range from 1.40 to 11%, with zero local income tax.
Hawaii, also known as Aloha State, is a state of US composed entirely of islands, located on a Pacific ocean, without any direct link with other states.
The Aloha State is composed of 6 major islands, each having its own scenic significance and beauty. All of these islands have beautiful weather, stunning beaches, diverse cultural scenes but a different life.
The biggest island with respect to "Area" among them is "The Big Island" with lush vegetation, diverse geography, but less population. On the other hand, the biggest island with respect to population is Oahu; it is an island with satisfying city life, major highways, tall buildings, and a huge crowd.
Other notable islands include Maui, Kauai, Lanai, and Molokai that are also known for their beautiful weather, sizable to lower population, amazing landscapes, and stunning tourist spots.
The cost of living in this State is fairly high, which means moving in here can only be feasible with a good job or successful business. Although the unemployment rate is relatively low, but finding the job or starting a successful business, especially outside Oahu, could be difficult. The major jobs available here are in industries including tourism, healthcare, hospitality, government, construction, retail, and military.
Besides the income, another essential factor to consider before moving to Hawaii is buying or renting home in Hawaii, which is unfortunately expensive, given that the median rent price in Hawaii is $2,400, and the median home value is $617,500.
Moreover, one must also do proper research on schooling and education of the kids along with the cost of health insurance, which may be a lot different on these islands, as compared to the mainland.
Setting aside the difficulties and cost of living on these Islands, there are a lot many reasons to move in here, especially for nature lovers, as this place is just like a paradise on earth.
So, If you have made up your mind to move to Hawaii and start a new job or business, then you must know how much will you earn as an employee or pay as an employer. Wherefore, to make it easy and quick for you, our experts have compiled as an amazing Hawaii Paycheck Guide along with the state-of-the-art Hawaii Paycheck Calculator to give you near to the real idea of the Take Home Pay.
This guide includes all the necessary facts, rules, federal and state laws, steps, and tools to deduce the Take of Pay of an Employee. Therefore, you must continue reading.
To calculate Take Home Pay or Paycheck, you need to go through several steps that include calculation of Gross Pay, Pre-Tax Deductions, Federal Taxes, State Taxes, Post Tax Deductions, Local Tax, etc.
To make it easy for you, we have divided this guide into steps, which would give a general idea. However, there may be some differences or additional taxes that you may be subjected to, according to your situation. As it's a comprehensive guide, we can only discuss general aspects.
Hourly Base Employees are paid for each hour they work in a day or a week, at the mutually agreed hourly rate. However, the mutually agreed hourly rate must be as per the Federal and State Minimum Wage law.
Hourly Employees are also entitled to receive overtime, for each excess hours worked after Regular worked hours in a day or week. The overtime rate in most of the states is one and a half times the regular hourly rate.
Salaried employees receive a fixed but mutually agreed on pay, for a decided pay frequency, usually semi-monthly or monthly. However, for gross payment determination for a pay period, the annual salary is divided by the pay frequency.
Most of the salaried employees are exempted from Overtime law. Therefore, they are not entitled to receive overtime, regardless of how many excess hours they work. However, some exceptional salaried employees may be eligible to receive overtime according to federal or state law.
Pre-Tax Deduction is an amount deducted from employee's gross pay before any withholding tax is deducted. These deductions have several advantages, including the reduction of taxable wages. Hence, increasing the take-home pay of an employee. However, not all deductions can be considered as free from all taxes, which means some of the deductions may require certain taxes to be withheld.
Some of the standard Pre-tax deductions are:
Note: Pre-Tax deduction rate changes from year to year, according to inflation and costs of living by the federal government. Therefore, you must keep yourself updated with all rates before making any deductions.
Federal Taxes are taxes deducted from almost every employee, regardless of which state or county they work in.
Federal Taxes are calculated according to the details provided by the employee on Form W-4, which comprises of income, filing status, number of dependents, number of allowances, number of jobs, etc.
The details are form W-4, are assessed and used by the employer to deduce the federal tax bracket, in which the employee's taxable wage lay upon.
Federal Taxes ranges from 0% to 37% have seven tax brackets, depending on filing status, income, and the number of allowances claimed. Below is the income tax details for the year 2024:
Taxable Income | Rate |
---|---|
$0 - $9,700 | 10% |
$9,700 - $39,475 | 12% |
$39,475 - $84,200 | 22% |
$84,200 - $160,725 | 24% |
$160,725 - $204,100 | 32% |
$204,100 - $510,300 | 35% |
$510,300+ | 37% |
Taxable Income | Rate |
---|---|
$0 - $19,400 | 10% |
$19,400 - $78,950 | 12% |
$78,950 - $168,400 | 22% |
$168,400 - $321,450 | 24% |
$321,450 - $408,200 | 32% |
$408,200 - $612,350 | 35% |
$612,350+ | 37% |
Taxable Income | Rate |
---|---|
$0 - $9,700 | 10% |
$9,700 - $39,475 | 12% |
$39,475 - $84,200 | 22% |
$84,200 - $160,725 | 24% |
$160,725 - $204,100 | 32% |
$204,100 - $306,175 | 35% |
$306,175+ | 37% |
Taxable Income | Rate |
---|---|
$0 - $13,850 | 10% |
$13,850 - $52,850 | 12% |
$52,850 - $84,200 | 22% |
$84,200 - $160,700 | 24% |
$160,700 - $204,100 | 32% |
$204,100 - $510,300 | 35% |
$510,300+ | 37% |
Along with Federal Withholding, employers are also required to withhold Federal Insurance Contributions Act (FICA) taxes from the employee's paycheck as well as pay a matching amount themselves to the IRS.
There are two types of FICA taxes:
Employers are entitled to withhold 6.2% from the first $132,900 (wage base limit for 2024), taxable wages earned by the employee. Moreover, the employer is also required to pay an equal amount to the IRS for each employee.
Medicare tax is another type of FICA Tax that an employer must withhold from the taxable gross wage of the employee, at the rate of 1.45%. Unlike social security, there is no wage base limit. However, if the employee earns more than the defined threshold than he/she is subjected to an additional 0.9% of the Additional Medicare Tax rate, for every dollar earned above the threshold amount.
Like Social Security, IRS also requires the employer to pay an equal amount of Medicare tax for each employee.
The Federal Unemployment Tax Act (FUTA) is a tax that the IRS requires the employer to pay without deducting anything from the employee's paycheck.
The FUTA Tax rate for 2024 is 6.0% of the first taxable wage up to $7000 of an employee. However, once the taxable wage limit is crossed for a particular employee, then the employer no longer has to pay this tax.
What to reduce FUTA Tax?
Yes! Then you must pay State Unemployment Insurance (SUI) tax in full and on time and get a FUTA tax credit of up to 5.4%. Which means, you saved a whopping 90% from FUTA Tax.
Although, employers are not required to withhold any amount as a post-tax deduction, unless if an employee voluntarily asks to do so. However, there are some deductions ordered by the court like child support or wage garnishment, which the employer is entitled to deduct.
Along with Federal Payroll Taxes, both employers and employees are also subject to Hawaii State Payroll Taxes.
Like Federal Taxes, employers are also responsible for withholding and paying the Hawaii State taxes from the employee's paycheck, according to the details provided by the employee in Form HW-4.
An employee must ensure that all the details provided in Form HW-4 and Form W-4 must be updated accordingly with any significant changes in life like marriage, divorce, or the birth of a child.
Following are the Payroll Taxes that should be withheld from the employee's paycheck or paid by the employer:
The State imposes the progressive income tax rates on the paychecks that range from 1.40% to 11%, having nine tax brackets depending on the filing status and income. However, employees can claim specific allowances by mentioning it on Form HW-4 to increase their take-home pay. However, employees must ensure that they have claimed the right number of allowances to avoid paying more than required taxes or less than needed taxes to prevent loss or penalties.
The state requires the employer to withhold these taxes from each employee's paycheck, according to the tax brackets provided below in the table:
Hawaii Taxable Income | Rate |
---|---|
$0 - $2,400 | 1.40% |
$2,400 - $4,800 | 3.20% |
$4,800 - $9,600 | 5.50% |
$9,600 - $14,400 | 6.40% |
$14,400 - $19,200 | 6.80% |
$19,200 - $24,000 | 7.20% |
$24,000 - $36,000 | 7.60% |
$36,000 - $48,000 | 7.90% |
$48,000 - $150,000 | 8.25% |
$150,000 - $175,000 | 9.00% |
$175,000 - $200,000 | 10.00% |
$200,000+ | 11.00% |
Hawaii Taxable Income | Rate |
---|---|
$0 - $4,800 | 1.40% |
$4,800 - $9,600 | 3.20% |
$9,600 - $19,200 | 5.50% |
$19,200 - $28,800 | 6.40% |
$28,800 - $38,400 | 6.80% |
$38,400 - $48,000 | 7.20% |
$48,000 - $72,000 | 7.60% |
$72,000 - $96,000 | 7.90% |
$96,000 - $300,000 | 8.25% |
$300,000 - $350,000 | 9.00% |
$350,000 - $400,000 | 10.00% |
$400,000+ | 11.00% |
|
|
---|---|
Hawaii Taxable Income | Rate |
$0 - $2,400 | 1.40% |
$2,400 - $4,800 | 3.20% |
$4,800 - $9,600 | 5.50% |
$9,600 - $14,400 | 6.40% |
$14,400 - $19,200 | 6.80% |
$19,200 - $24,000 | 7.20% |
$24,000 - $36,000 | 7.60% |
$36,000 - $48,000 | 7.90% |
$48,000 - $150,000 | 8.25% |
$150,000 - $175,000 | 9.00% |
$175,000 - $200,000 | 10.00% |
$200,000+ | 11.00% |
Hawaii Taxable Income | Rate |
---|---|
$0 - $3,600 | 1.40% |
$3,600 - $7,200 | 3.20% |
$7,200 - $14,400 | 5.50% |
$14,400 - $21,600 | 6.40% |
$21,600 - $28,800 | 6.80% |
$28,800 - $36,000 | 7.20% |
$36,000 - $54,000 | 7.60% |
$54,000 - $72,000 | 7.90% |
$72,000 - $225,000 | 8.25% |
$225,000 - $262,500 | 9.00% |
$262,500 - $300,000 | 10.00% |
$300,000+ | 11.00% |
Like most of the states, Hawaii also requires the employer to pay State Unemployment Insurance (SUI) Tax, range from 0% to 5.6% (as in 2024) on the first $46,800 in wages paid to each employee in a Year. However, if the employer is new, then he gets the relief to pay a flat rate of 2.4% of the wage paid to each employee.
Note: Employees are not required to pay this tax.
Unlike most of the States, Hawaii State requires both the employer and employees to pay state temporary disability insurance tax. This tax supports the covered employee of non-work related injuries and illnesses.
Employers are required to withhold up to 0.5% from the eligible employee's wages and pay the difference between cost and employee contribution or may also choose to cover the entire cost.
No City or County of Hawaii charges any Local Income Tax on its residents.
Once you are done with all elements (steps) discussed earlier, you will have a net pay amount for each employee. Now all you have to do is pay employees on time. Also, to file all Federal Taxes, State Taxes, FICA, and FUTA taxes on time, to avoid any penalties.
Answer: Yes, Hawaii has a State income tax, which is based on a progressive system, with nine tax brackets depending on filing status and income. The income tax rates are as follow:
For "Single" and "Married but Filing Separately":
For "Head of Household" and "Married filing jointly":
Answer: There are no income taxes on Payroll in Honolulu.
Answer: According to Kiplinger (A personal finance site), Hawaii is among the least-friendly tax state with Income Tax rates as high as 11% on taxable income.
Question # 4: Is Hawaii a tax-free state?
Answer: No, Hawaii isn't a tax heaven (or tax-free state) for both employers and employees concerning the paycheck, as employees are required to pay state income tax, which ranges from 1.4% to 11%, depending on income and filing status. Moreover, Employers are also required to pay the State Unemployment Insurance Tax for each employee.
Answer: Following are the payroll taxes that the employers and employees need to pay in Hawaii:
State Disability Insurance (SDI) Tax; Paid by both the employer and employee. The employee pays 0.5% of wages, with a maximum deduction of $5.34/week, whereas the employer pays the difference between cost and employee contribution.