Paycheck Calculator Hawaii - HI

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State Withholding


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Hawaii - HI Paycheck Calculator: Hourly and Salary

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.


Hawaii Payroll Tax Facts:

  • Hawaii Residents have to pay, federal taxes, and state taxes on payroll, but luckily, they don't have any local tax.
  • Hawaii State charges the State income tax on progressive rates that range from 1.4% to 11%, having nine tax brackets depending on your income and filing status.
  • The average household income of the Hawaii residents is $74923, according to US Census Bureau.
  • The Minimum wage rate by Hawaii State for employees is $10.10, and for tipped employees, it is $9.35, with the maximum tip credit of $0.75.
  • Hawaii State doesn't have any reciprocal agreement with any other state in the US.
  • In Hawaii, State Disability Insurance (SDI) Tax is also deducted from the employee paycheck at the rate of 0.5% of the wage, but with the maximum deduction of $5.44/week. Moreover, employers are also required to pay the difference between the cost of insurance and employee contribution.
  • Along with SDI tax, employers are also required to pay State Unemployment Insurance (SUI) Tax, at the rate of 0 to 5.6%, on the first taxable earning of $46800 of each employee. However, new employers are required to only the flat rate of 2.4% for each employee's wage.
  • According to research, the resident of Hawaii needs an annual home pay of $122,000, to live a comfortable life.
  • The Unemployment Rate in Hawaii is 2.7%, which is considerably low from other states.

How to calculate Take-Home Pay in Hawaii?

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.


Step 1 - Calculating Gross Pay:

  1. To calculate Gross Pay, first, you need to determine the Pay Type of an employee. It is whether an employee is paid on an hourly basis or salary basis.

Hourly Employees:

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:

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.


  1. Remember, Supplementary Wages like bonuses, commissions, and paid leaves, as well as double time and fringe benefits, are also taxable wages. Therefore they must also be included in gross pay before federal and state tax calculation.


Step 2 – Subtracting Pre-Tax Deductions (If Any):

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:

  • Health Savings Accounts or FSA or HSA plans
  • Commuter Benefits
  • Healthcare Insurance
  • Short-Term Disability
  • Dental Insurance
  • Medical Expenses and Flexible Spending Accounts
  • Vision Benefits
  • Retirement funds like a traditional 401(k)

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.


Step 3 – Calculate and Subtract Federal Taxes:

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 2019:

Single Filers
Taxable Income Rate
$0 - $9,525 10.0%
$9,525 - $38,700 12.0%
$38,700 - $82,500 22.0%
$82,500 - $157,500 24.0%
$157,500 - $200,000 32.0%
$200,000 - $500,000 35.0%
$500,000+ 37.0%

Married, Filing Jointly
Taxable Income Rate
$0 - $19,050 10.0%
$19,050 - $77,400 12.0%
$77,400 - $165,000 22.0%
$165,000 - $315,000 24.0%
$315,000 - $400,000 32.0%
$400,000 - $600,000 35.0%
$600,000+ 37.0%

Married, Filing Separately
Taxable Income Rate
$0 - $9,525 10.0%
$9,525 - $38,700 12.0%
$38,700 - $82,500 22.0%
$82,500 - $157,500 24.0%
$157,500 - $200,000 32.0%
$200,000 - $500,000 35.0%
$500,000+ 37.0%

Head of Household
Taxable Income Rate
$0 - $13,600 10.0%
$13,600 - $51,800 12.0%
$51,800 - $82,500 22.0%
$82,500 - $157,500 24.0%
$157,500 - $200,000 32.0%
$200,000 - $500,000 35.0%
$500,000+ 37.0%


Step 4 – Deduct FICA Taxes:

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:


  1. Social Security:

Employers are entitled to withhold 6.2% from the first $132,900 (wage base limit for 2019), taxable wages earned by the employee. Moreover, the employer is also required to pay an equal amount to the IRS for each employee.


  1. Medicare:

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.



Step 5 – Payment of FUTA Taxes

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 2019 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.


Step 6 – Subtract Post-Tax Deductions (If any):

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.


Step 7 – Withhold Hawaii State Payroll Taxes:

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:

Hawaii State Income Tax:

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:

Single Filers
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%

Married, Filing Jointly
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%

Married, Filing Separately
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%

Head of Household
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%

State Unemployment Insurance (SUI) Tax:

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 2019) 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.


State Disability Insurance (SDI) 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.


Step 8 – Withhold Local Tax:

No City or County of Hawaii charges any Local Income Tax on its residents.


Step 9 – Calculate Pay Check:

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.


Federal and Payroll Tax Laws in Hawaii:

  • The Federal Minimum Wage rate for an employee is $7.25, which is lower than Hawaii's Minimum wage rate of $10.10. Therefore, Employers are required to pay the Minimum Wage of $10.10 / hour to employees and $9.35 an hour to tipped employees, with the maximum tip credit of $0.75. However, Some employees are exempted from this law, including:
    • Employees with the guaranteed minimum monthly salary of $2000,
    • Agricultural workers that are working under an employer with 20 or fewer employees.
    • Outside collectors or salespersons.
    • Automobile salespersons that are working for licensed dealers and many more.
  • Hawaii State also requires the employer to pay overtime to their employees for every extra hour work after 40 regular hours in a workweek. The overtime rate for the employee is one and half times the regular hourly rate.
  • Hawaii State doesn't consider excess hours worked after 8 hours of the workday as overtime, except for the Laborers and mechanics working on government construction projects.
  • The state law requires the employer to provide 30 minutes of meal break to minor employees of age 14 and 15, after five consecutive hours of work. Moreover, Federal and State law doesn't abide by the employer to grant a meal break to the adult employees (of age 16 or above). But if an employer is willing to provide a lunch break, then it must be paid for 20 minutes or lunch break and unpaid for 30 minutes or above lunch break.
  • Hawaii Labor law doesn't require the employee to pay severance pay to their employees. If the employer voluntarily pays, then it must comply with established policy or employment contract.
  • The employers are required by the Hawaii State to set the pay frequency to twice in a month (semi-monthly) on a regular payday. However, employers are allowed to pay once a month if the majority of employees elect for it in a collective bargaining unit.
  • In addition to State Unemployment Insurance Tax, the employer also requires to pay the Employment and Training Assessment (E&T) charges at the rate of 0.01%.
  • There is no provision for Supplemental Wages in Hawaii State Tax. Therefore, employers and employees must follow the FLSA Law.
  • United States Marine Corps, Coast Guard, Hawaii National Guard, Navy, Air Force, a member of the reserve components of the Army living in Hawaii, are exempted from paying taxes on the first $6,410 they earn.
  • There is no minimum number of employees limit in FLSA law to abide by the employer to follow FLSA law.
  • According to Hawaii Wage and Hour Law, there is no provision for compensatory time off that is to be paid instead of overtime.
  • The employer is required to compensate for the time as hours worked if the employee works through a designated break.
  • Law in Hawaii doesn't require the employer to pay extra compensation for work not performed on the days, such as on holiday.

FAQs

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":

  • 4% on the first $2,400 of taxable income of an employee.
  • 2% on taxable income from $2,401 to $4,800.
  • 5% on taxable income from $4,801 to $9,600.
  • 4% on taxable income from $9,601 to $14,400.
  • 8% on taxable income from $14,401 to $19,200.
  • 2% on taxable income from $19,201 to $24,000.
  • 6% on taxable income from $24,001 to $36,000.
  • 9% on taxable income from $36,001 to $48,000.
  • 25% on taxable income from $48,001 to $150,000.
  • 9% on taxable income from $150,001 to $175,000.
  • 10% on taxable income from $175,001 to $200,000.
  • 11% on taxable income of $200,001 and above.

For "Head of Household" and "Married filing jointly":

  • 4% on the first $4,800 of taxable income of an employee.
  • 2% on taxable income from $4,800 - $9,600.
  • 5% on taxable income from $9,600 - $19,200.
  • 4% on taxable income from $19,200 - $28,800.
  • 8% on taxable income from $28,800 - $38,400.
  • 2% on taxable income from $38,400 - $48,000.
  • 6% on taxable income from $48,000 - $72,000.
  • 9% on taxable income from $72,000 - $96,000.
  • 25% on taxable income from $96,000 - $300,000.
  • 9% on taxable income from $300,000 - $350,000.
  • 10% on taxable income from $350,000 - $400,000.
  • 11% on taxable income of $400,000 and above.

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:

  1. Federal Income Tax; having seven tax brackets, ranging from 0% to 37%, and is funded by the employee.
  2. FICA Tax; Comprises of Social Security Tax (6.2% paid by employee + 6.2% paid by the employer) and Medicare Tax (1.45% paid by employee + 1.45% paid by the employer)
  3. FUTA Tax; Paid only by the employer at the rate of 0% of the first taxable wage up to $7000 of an employee.
  4. State Income Tax; having nine tax brackets, ranging from 1.4% to 11% depending on filing status and income and is paid by the employee.
  5. State Unemployment Insurance (SUI) Tax; Paid by employer, ranges from 0% to 5.6% on a wage base of $46,800 annually.

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.

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