Hiring Your First Employee's In Hawaii
Who pays what?
Employer only
Hawaii unemployment (SUI): New employers on Schedule C pay 2.40% on the first $64,500 of wages, plus a 0.01% training assessment. Construction employers are often higher, with one guide showing 5.6% to 6.6% for the first three rate years (NAICS 23). The employee pays nothing toward SUI. The maximum cost per employee at the new-employer rate is about $1,548. Bloomberg reported the assessment as 0.1%, so confirm on your DLIR rate notice.
Workers’ comp: The employer pays 100% and can’t charge employees. The premium is (payroll ÷ 100) × class code rate × experience mod. One estimate puts average employer cost in Hawaii at $1.62 per $100 of covered wages. Hawaii has also been ranked the most expensive state for comp, at an index rate of $2.52 per $100 in 2024. Office roles come in well below that average and construction or other manual trades run far above it, so get a carrier quote by class code.
FUTA: 0.6% on the first $7,000, which is $42 per employee, assuming you get the full state credit.
Employer FICA: 6.2% Social Security (up to the $184,500 wage base) plus 1.45% Medicare. nationaltaxtools
Shared
TDI: The employer may deduct half the premium from the employee’s pay, but no more than 0.5% of weekly wages. For 2026 that deduction can’t exceed $7.50 a week, and the employer pays the rest. That caps the employee at $390 a year. The weekly wage base is $1,500.21. The total premium comes from your TDI carrier, so I’ve assumed it below. bloombergtaxhawaii
Employee FICA: the same 7.65% as the employer’s.
Prepaid Health Care (PHC): This is the biggest line item and the easiest to miss. An employee qualifies after four consecutive weeks at 20+ hours a week, with monthly wages of at least 86.67 times the minimum wage. At the $16.00 minimum wage that’s about $1,387 a month. The employer must pay at least half the premium for single coverage, and the employee’s share can’t exceed 1.5% of monthly wages. firsthrfirsthr
Example: one $60,000 hire
Item | Employer | Employee |
Social Security + Medicare (7.65%) | $4,590 | $4,590 |
FUTA | $42 | none |
Hawaii SUI (2.4% × $60,000) | $1,440 | none |
E&T assessment (0.01%) | $6 | none |
TDI (assumed 1.0% total premium = $600) | $300 | $300 |
Workers’ comp at $1.62 per $100 | $972 | none |
Subtotal before PHC | $7,350 (12.3%) | $4,890 |
PHC (assumed $600/mo single premium) | $6,300 | $900 |
Total with PHC | $13,650 (22.8%) | $5,790 |
The PHC split works like this: half the premium is $300 a month, but 1.5% of the $5,000 monthly wage is only $75, so the employee’s share is $75 and the employer picks up the remaining $525.
Workers’ comp scenarios on the same $60,000
Scenario | Rate per $100 | Annual cost |
Low-risk office role (my estimate) | $0.50 | $300 |
State average | $1.62 | $972 |
Higher-hazard trade (illustrative) | $5.00 | $3,000 |
Here are two scenarios for a $35/hr employee, using the same 2026 rates and the same placeholder assumptions as before (TDI total premium of 1.0% of wages, PHC single premium of $600/mo, workers’ comp at the $1.62 per $100 state average).
Item | Employer, 40 hrs/wk ($72,800/yr) | Employer, 30 hrs/wk ($54,600/yr) |
Social Security + Medicare (7.65%) | $5,569 | $4,177 |
FUTA | $42 | $42 |
Hawaii SUI | $1,548 (capped at the $64,500 base) | $1,310 |
E&T assessment (0.01%) | $6 | $5 |
TDI (employer half of premium) | $364 | $273 |
Workers’ comp ($1.62 per $100) | $1,179 | $885 |
Subtotal before PHC | $8,709 (12.0%) | $6,692 (12.3%) |
PHC (employer share) | $6,108 | $6,381 |
Total employer cost | $14,817 (20.4%) | $13,073 (23.9%) |
Loaded hourly cost | about $42.12/hr | about $44.76/hr |
Employee deductions | 40 hrs/wk | 30 hrs/wk |
Social Security + Medicare | $5,569 | $4,177 |
TDI ($7.00/wk at 40 hrs, $5.25/wk at 30 hrs) | $364 | $273 |
PHC (1.5% of monthly wages) | $1,092 ($91/mo) | $819 ($68.25/mo) |
Total | $7,025 | $5,269 |
TDI: At 40 hrs a week, weekly pay is $1,400, which is under the $1,500.21 wage base. The employee’s 0.5% share is $7.00 a week, not the $7.50 cap.
PHC: It costs the employer more per dollar of wages at 30 hrs than at 40. The employee’s 1.5% cap shrinks with wages, but the premium doesn’t. Anyone at 20+ hrs a week qualifies.
SUI: At 40 hrs the cost is a flat $1,548 per employee. Each added hire costs the same, however high the wage.
Overtime: Overtime at 1.5x adds FICA and workers’ comp on the extra wages. It adds no SUI after the base is hit. Workers’ comp scales with payroll, so a higher-risk class code changes this fast (at $5.00 per $100 it’s $3,640 at 40 hrs).
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