Hawaii payroll setup for your first hire

Hawaii takes state income tax from paychecks. Form BB-1 opens withholding. A general excise license is a different Hawaii Tax ID.

DOTAX is the Hawaii Department of Taxation. It collects Hawaii income tax withheld from wages. This is not Wyoming, Texas, Florida, or New Hampshire. Those states do not take state income tax from paychecks. Hawaii does. A payroll login is not a withholding number.

The withholding brochure, revised May 2025, says the employer withholds state income tax from employees’ wages and sends it to the Department. Part-time wages and seasonal wages are subject to that withholding. On or before the first day of work, the employee completes Form HW-4, the Employee’s Withholding Allowance and Status Certificate. The employer keeps that form. A federal Form W-4 does not replace Form HW-4. If the employee does not turn in Form HW-4, withhold as if the employee is single and claiming zero exemptions. Hawaii does not let an employee write “exempt” on Form HW-4 and stop withholding.

Register on Form BB-1, the State of Hawaii Basic Business Application. Check Withholding. The form prints no fee for that box. File it by mail, in person at a district tax office, or on Hawaii Tax Online at hitax.hawaii.gov. In person, the form says you receive a Hawaii Tax ID the same day. Online, it says processing is about five business days. By mail, it says about three to four weeks. The brochure says the same in-person and mail clocks, and it says a mailed application brings a letter with the Hawaii Income Withholding Tax ID Number. Dropping a form at the counter is treated as mail. It is not the same-day counter assignment.

General excise tax, called GET, is a separate license. The brochure says the Department assigns a separate Hawaii Tax ID for the GET license and for the withholding license. Form BB-1 lists General Excise (GE) and Hawaii Withholding (WH) as different tax types. A GET number is not the withholding number. GET is not this first-hire paycheck file. If you already hold a GET license, file a new Form BB-1 for withholding if you did not check that box the first time.

The employer withholding page says every withholding taxpayer files Form HW-14, the withholding tax return, quarterly. Those due dates are April 15, July 15, October 15, and January 15. File that quarterly return even when you paid no wages. The brochure calls Form HW-14 the Periodic Withholding Return and says a monthly return is not allowed. How often you send the money is a different clock. If your annual withholding is under $5,000, send it quarterly by the 15th after the period. From $5,000 to $40,000, send it monthly by the 15th. Above $40,000, or if you are on the federal semiweekly deposit schedule, send it semiweekly. A payment alone can ride Form VP-1. You do not also send Form HW-14 with that payment. The forms list says Form HW-2 is the Statement of Hawaii Income Tax Withheld and Wages Paid. Form HW-3, the old annual reconciliation, is obsolete for years after 2019. Form HW-30 is only the paper transmittal of Forms HW-2 or W-2. Do not send a payment with Form HW-30. It is not a return. The withholding page says Forms W-2 or HW-2 go to the employee and to the Department by January 31. Starting January 1, 2026, an employer who files 10 or more of those forms in a year must file them electronically.

Unemployment starts when one person works any part of a day. The status report is due in 20 days. Paper Form UC-1 is not accepted.

DLIR is the Department of Labor and Industrial Relations. The Unemployment Insurance Division collects state unemployment tax. That tax is often called SUTA, state unemployment tax, or SUI, state unemployment insurance. Official pages say unemployment insurance contributions. This DLIR is not Wyoming’s Department of Workforce Services. It is not Delaware’s Division of Unemployment Insurance. Withholding stays at the Department of Taxation. Unemployment stays here.

HRS 383-1 is the regular-shop definition. An employer is an employing unit which, for some portion of a day in the current calendar year, has or had one or more individuals in employment. The section does not print a $1,500-in-a-calendar-quarter test. It does not print a one-person-in-20-weeks test. This is not the pair used in Delaware and in many other states. This is not California’s $100-in-a-quarter test. There is no 15-day California clock on the Hawaii handbook. This is not Montana’s $1,000-in-a-calendar-year test. Montana then reports that whole year back to January 1. Hawaii does not print that January 1 catch-up. This is not Nevada’s $225-quarter test. Utah’s one-day rule is a different department and a different portal.

The employer handbook says every individual or organization that becomes an employing unit must file a status report within 20 days after hiring an employee. The division then decides liability and assigns an unemployment account number. It does not issue that number before the liability date. Form BB-1 prints the same 20-day clock in different words: register with the Unemployment Insurance Division within 20 days after services in employment are first performed. That 20-day file is the status report. It is not the new-hire report. The handbook says paper Form UC-1 is not accepted. Register on the employer portal at uiclaims.hawaii.gov before an account number is issued. Future hire dates are not accepted. The new-employer page and the employer FAQ say the business owner creates an online profile and completes Form UC-1, the Report to Determine Liability, on that portal. Paper forms are not accepted. Hold the account number DLIR assigns. A federal Employer Identification Number, called EIN, is not that number. A Hawaii withholding ID is not that number.

The handbook names other paths. Agricultural labor stays out when cash wages stay under $20,000 in each quarter of the current and preceding calendar years, and the employer also stays under the employee-count or 20-week farm test the handbook prints. Domestic service in a private home stays out under $1,000 in cash wages in a calendar quarter in the current or preceding calendar year. Family employment of a parent, a spouse, or a child under 21 has its own exclusion. A shop that is not yet covered can elect coverage for at least two calendar years. This scorecard is the regular-business path.

The quarterly file is Form UC-B6, the Quarterly Wage, Contribution and Employment and Training Assessment Report. The handbook prints the calendar. The quarter that ends March 31 is due April 30. The quarter that ends June 30 is due July 31. The quarter that ends September 30 is due October 31. The quarter that ends December 31 is due January 31. File it even when you paid no wages. HRS 383-94 puts that quarterly wage report on the last day of the month after the quarter and prints a $30 penalty for a missed or insufficient report. A late contribution payment draws a separate penalty. Those due dates are not the Form HW-14 dates. Withholding’s quarter ends on the 15th. Unemployment’s quarter ends on the last day of the next month.

The contribution-rates page prints Table 1 for 2026. The schedule is C. The tax base is $64,500. The new-employer rate is 2.4 percent. The Employment and Training assessment, called E&T, is 0.1 percent. A new employer’s rate is the rate for a .0000 reserve ratio. Wages above the tax base are still reported. They are not all taxed. Employers are told their rate in a Contribution Rate Notice in March. The employer FAQ says a shop that fails to file the contribution report or the quarterly wage report can be charged the maximum tax rate of 5.4 percent for the whole year. The 2026 trust-fund evaluation says Schedule C for 2026 runs from 0 percent to a maximum of 5.60 percent. Those two maximums are not the same figure. Use the rate on the live notice, not a number from a software page. Do not copy Wyoming’s $33,800 wage base onto Hawaii. Do not copy Delaware’s 1.0 percent new-employer line onto Hawaii.

New hire is a 20-day report to the Child Support Enforcement Agency. The quarterly wage report does not take it.

The new-hire report is a list of who you just hired. It is not a box on Form UC-B6. It is not Form BB-1. It is not the unemployment status report. HRS 576D-16 says each employer reports to the agency within 20 days of hire. The report needs the employee’s name, address, and Social Security number, and the date services for pay were first performed, plus the employer’s name, address, and federal identification number. Each report is made on a W-4 or its equivalent. Mail, magnetic, or electronic transmission is allowed. An employer that sends reports magnetically or electronically uses two transmissions a month, not less than 12 days apart and not more than 16 days apart. A missed report can draw a $25 civil penalty. A conspiracy to skip the report or to file a false one can draw a $500 fine.

The employer FAQ says the Child Support Enforcement Agency, called CSEA, runs the State Directory of New Hires. Report by faxing or mailing a copy of the federal Form W-4. Do not use the unemployment Form UC-BP-5(A). The FAQ says to report the date work starts, not a hire date for work that has not started yet. The mail and fax address it prints is the Child Support Enforcement Agency, New Hire Reporting Directory, 601 Kamokila Blvd., Suite 251, Kapolei, HI 96707. The phone is (808) 692-7029. The fax is (808) 692-7001. The CSEA employer page points employers to that directory. The statute does not print a 60-day separation test. Do not copy Wyoming’s 60-day rehire gap onto Hawaii. This is not West Virginia’s 14-day clock. This is not Alabama’s seven-day report. This is not Georgia’s 10-day report.

Workplace injury insurance is due from the first employee. Hawaii has no state fund. Temporary disability insurance and prepaid health care are separate policies at the same division.

DCD is the Disability Compensation Division inside DLIR. The workers’ compensation page says any employer, other than those excluded in HRS 386-1, with one or more employees, full-time or part-time, permanent or temporary, must provide workers’ compensation coverage. The FAQ repeats that one-employee rule. It says Hawaii has no state fund from which employers can buy this insurance. Buy a policy from a carrier authorized to write workers’ compensation in Hawaii, or become a self-insured employer approved by the director. The FAQ names Form WC-21 for that self-insurance application. HRS 386-121 is the security rule. An employer secures compensation with an authorized insurer, with a security deposit, with approved self-insurance, with a self-insurance group, or with a captive-insurer group. The State and the counties are outside that private-employer list. A payroll login is not a policy. An unemployment account number is not a policy.

The FAQ’s exclusions are not the regular-shop test. They include unpaid workers for a religious, charitable, educational, or nonprofit organization, certain student workers, ministers, domestic workers earning less than $225 in cash in a calendar quarter, certain stockholders, and real estate salespersons paid only by commission. An employer may elect to cover an excluded worker. Do not wait for three employees. Do not wait for five. This is not Wyoming’s extra-hazardous industry list. This is not North Dakota’s exclusive state fund. This is not Ohio’s Bureau of Workers’ Compensation monopoly. This is not Texas optional coverage. This is not Washington’s rule that ordinary shops buy the state fund.

Temporary disability insurance, called TDI, is wage replacement for a non-work illness or injury, including pregnancy. It is not medical care, and it is not workers’ compensation. The TDI page says the law requires employers to provide that coverage to eligible employees. The State does not pay the benefits. Buy an insured plan from an authorized carrier, or adopt a self-insured plan the Division approves. An employee is eligible with at least 14 weeks of Hawaii employment in the 52 weeks before the disability, during each of which the employee was paid for 20 hours or more and earned at least $400. Those weeks need not be consecutive and need not be with one employer. The employer may pay the full premium. If the cost is shared, the employee’s share cannot exceed half the premium, and it cannot exceed 0.5 percent of weekly wages, up to the weekly cap the Division sets. The December 10, 2025 notice sets that 2026 cap at $7.50 a week.

Prepaid health care, called PHC, is health coverage for a non-work illness or injury. The prepaid health care FAQ says every employer with one or more employees, other than the exclusions in HRS 393-5, must provide that coverage to eligible employees. An eligible employee works 20 hours or more a week for four consecutive weeks and earns a monthly wage of at least 86.67 times the Hawaii minimum wage. The 2026 notice prints that monthly wage as $1,387. Coverage starts at the earliest enrollment date of the health plan after those four weeks. The same notice says the employer may withhold up to half the premium, but not more than 1.5 percent of the employee’s wages. If the employee’s share is less than half the premium, the employer pays the rest. PHC is not the withholding account. TDI is not Form UC-B6. Both still sit on the first-hire desk because the Disability Compensation Division puts them on the employer, not on the employee to buy alone.

How Gusto and Patriot describe Hawaii

Confirm the withholding ID on the Department of Taxation letter or on Hawaii Tax Online. A general excise number is not that ID. Confirm the unemployment account number and the rate on the Contribution Rate Notice and on the unemployment portal. Confirm the 20-day new-hire file with the Child Support Enforcement Agency. Confirm a private workers’ compensation policy, a TDI plan, and prepaid health care for eligible employees. Payroll software does not issue those policies.

Gusto’s Hawaii help article says Middesk (Gusto’s business-verification company) may register state income-tax withholding and state unemployment insurance (SUI). The same article then tells a Hawaii shop to register income tax, unemployment tax, and temporary disability insurance on its own. It names the Hawaii Department of Taxation for withholding and the Department of Labor and Industrial Relations for unemployment tax. Those two doors match the brochure and the new-employer page. It says to request a withholding account on Form BB-1 through Hawaii Tax Online. That form matches the brochure. It says an in-person registration is same-day, a mail registration can take three weeks, and an online registration can take two to three days. Form BB-1 says in person is the same day, mail is about three to four weeks, and online is about five business days. Use the clock on the form. The article says register unemployment online with DLIR within 20 days of hiring an employee. That 20-day line matches the handbook. The article does not say paper Form UC-1 is rejected. The article asks for a withholding ID that starts with WH, and it says a number that starts with GE is not withholding. Form BB-1 lists General Excise (GE) and Hawaii Withholding (WH) as separate tax types. It does not print Gusto’s digit pattern. That pattern is what the software page says. The article says if you do not have an assigned unemployment rate yet, enter the new-employer rate and update it when the notice arrives. It does not print the 2.4 percent figure. Table 1 does. The article says Gusto can withhold a TDI employee share of up to 0.5 percent and that you pay the carrier. The 0.5 percent cap matches the TDI page. The article names Form TDI-15 for plan approval. The TDI page says a self-insured plan must be approved. It does not print Form TDI-15 in the text. That form number is what the software page says. The forms list in the article names Form HW-14, Form HW-3 as an annual reconciliation, Form UC-B6, and a Hawaii new-hire report. Form UC-B6 matches the handbook. The withholding forms list says Form HW-3 is obsolete after 2019, and Form HW-30 is the paper transmittal. The article’s new-hire line does not print the 20-day CSEA clock. The article does not print prepaid health care. The article does not say Hawaii has no state injury fund. Read Gusto’s Hawaii help article. See Gusto on the directory.

Patriot’s registration article says one Hawaii Business Express submission covers a business registration, a Department of Taxation taxpayer ID, and Department of Labor and Industrial Relations filings. The withholding door on Form BB-1 is Hawaii Tax Online. The unemployment door on the new-employer page is uiclaims.hawaii.gov. The article does not name Form BB-1 or that unemployment portal. The article says the 2026 new-employer SUTA rate is 2.4 percent, plus a 0.1 percent Employment and Training assessment. Those two figures match Table 1. Use the rate on your live notice. The article says workplace injury insurance is due with at least one employee, through a private provider or a state-operated fund. The one-employee line matches the workers’ compensation page. The state-fund line does not. That page says Hawaii has no state fund. The article says Hawaii requires disability insurance through the state, a private plan, or a collective bargaining agreement. The TDI page says the State does not pay the benefits. Buy an authorized carrier’s plan, or use a self-insured plan the Division approves. The article tells the employee to complete Form HW-4. That matches the brochure. It also tells the employee to complete a federal Form W-4. The brochure says the federal form does not replace Form HW-4. The article puts the 20-day new-hire report, including a rehire, with the Child Support Enforcement Agency at the Kapolei address the unemployment FAQ prints. The 20-day clock and that address match HRS 576D-16 and the FAQ. The statute does not print a rehire-day test. Patriot’s tax article says Full Service files Form UC-B6 quarterly and Form HW-14 monthly or quarterly, plus Form HW-3 as an annual reconciliation. Form UC-B6 matches the handbook. The brochure says Form HW-14 is quarterly for every employer, while the payment can be monthly or semiweekly. The forms list says Form HW-3 is obsolete. Those HW-3 and monthly-return lines are what the software page says. The article also puts a state retirement-savings program on the first-hire list. The program’s own FAQ says the program is still being built and a launch date has not been announced. Do not treat that program as a file you must finish before the first paycheck. Read Patriot’s registration article and Patriot’s Hawaii payroll-tax article. See Patriot on the directory.

What still sits on the employer

• Open withholding on Form BB-1 through Hawaii Tax Online, or in person at a district tax office. There is no fee for the withholding box. Hold the withholding ID the Department of Taxation assigns. A general excise license is a different Hawaii Tax ID.
• Have the employee complete Form HW-4 on or before the first day of work. A federal Form W-4 does not replace it. If you have no Form HW-4, withhold as single with zero exemptions.
• File Form HW-14 quarterly, due April 15, July 15, October 15, and January 15, even when you paid no wages. Send the money on the quarterly, monthly, or semiweekly clock that matches your annual withholding. Form HW-3 is obsolete. Form HW-30 is only a paper transmittal. Do not pay with it.
• File the unemployment status report within 20 days after you hire, on uiclaims.hawaii.gov. Paper Form UC-1 is not accepted. A regular shop is an employer under HRS 383-1 when one person works any part of a day in the calendar year. Do not wait for a $1,500-quarter or 20-week test the statute does not print.
• Enter the unemployment rate from the live Contribution Rate Notice. Table 1 prints a 2026 new-employer rate of 2.4 percent, a tax base of $64,500, and a 0.1 percent Employment and Training assessment. The FAQ’s 5.4 percent missed-report maximum and the trust-fund evaluation’s 5.60 percent Schedule C maximum are not the same figure.
• File Form UC-B6 by the last day of the month after the quarter, even when you paid no wages. That calendar is not the Form HW-14 calendar.
• File the 20-day new-hire report with the Child Support Enforcement Agency on a federal Form W-4. Report the date work starts. Do not use Form UC-BP-5(A). A quarterly wage report does not satisfy that clock.
• Buy workers’ compensation from an authorized insurer, or qualify as self-insured, when you have one or more employees. Hawaii has no state fund. Arrange temporary disability insurance for eligible employees, and prepaid health care after four consecutive weeks at 20 hours and the monthly wage on the 2026 notice. Payroll software does not issue those policies.
• Do not copy another state’s clock onto Hawaii. Hawaii does not use California’s $100-quarter test. Hawaii does not use Delaware’s $1,500-quarter or 20-week unemployment test. Hawaii does not use Montana’s $1,000-year test or Montana’s report-the-year-back-to-January-1 rule. Hawaii does not use Wyoming’s rule that there is no paycheck withholding. Hawaii does not use Wyoming’s extra-hazardous state fund. Hawaii does not use North Dakota’s exclusive state fund. Hawaii does not use Washington’s rule that every ordinary shop buys the state fund. Hawaii does not use Ohio’s Bureau of Workers’ Compensation monopoly. Hawaii does not use Texas optional coverage. Hawaii does not use Georgia’s, North Carolina’s, or Virginia’s three-employee wait. Hawaii does not use Florida’s or South Carolina’s four-employee wait. Hawaii does not use Mississippi’s, Alabama’s, or Tennessee’s five-employee wait. Hawaii does not use West Virginia’s 14-day new-hire clock. Hawaii does not use Alabama’s seven-day new-hire clock. Hawaii does not use Georgia’s 10-day new-hire clock. Hawaii does not use Wyoming’s 60-day rehire gap.

Related guide: Employer payroll taxes percentage is the federal share on top of wages. Hawaii’s 2026 unemployment tax base is $64,500, with a 2.4 percent new-employer rate.

Also forming a company in Hawaii? Process Score compares registered agents there.