Unemployment and Temporary Disability Insurance Taxes (FUTA/SUTA/TDI): Hawaii

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor

Summary

• Hawaii employers use the ABC test to determine the employment status of workers for unemployment insurance tax purposes. See ABC Test.
• Hawaii defines wages for state unemployment insurance (SUI) purposes as all compensation from whatever source. Wages are withheld for SUI up the annual taxable wage base. See SUI Taxable Wages; Taxable Wage Base.
• The SUI tax rates are based on a multi-schedule contribution rate system. The rates are based on the ratio of the employer's reserve balance to its average annual payroll. See Contribution Rates; Experience Rating Method.
• Two or more employing units under the same ownership or control have the right to apply for a joint experience rating account, under certain conditions. See Joint or Combined Accounts.
• All employers are required to file quarterly wage and tax reports by the last day of the month following the close of the calendar quarter. Electronic and magnetic media filing is available. Penalties are imposed for failure to file reports and remit tax payments on time. See Quarterly Reporting Requirements.
• Employers are subject to penalties for filing contribution reports late, defaulting on payments of contributions, and for failing to respond to a request for information about a benefit claim if it results in an overpayment. See Penalties.
• Employers are required to keep payroll records that provide a true and accurate account of all workers and all payments made for at least five years. Records must include certain required information for each employee. See Recordkeeping Requirements.
• Employers in Hawaii are required to provide temporary disability insurance (TDI) or sick leave benefits to any employee who meets eligibility requirements, whether hired on a part-time, intermittent or full-time basis. Penalties are imposed for failure to comply with the law. See Disability Insurance.