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REMOTE EMPLOYEES

Hiring a remote employee in Hawaii

Your company is in another state and one employee lives and works from home in Hawaii. Which state's taxes apply, unemployment, paid leave and Hawaii's employer rules, each with its official source.

Facts checked on October 5, 2026 against the official sources listed at the end of this page. For employers. General information, not legal or tax advice: confirm a rule with the agency before you rely on it.

Hawaii at a glance

Income tax
Hawaii withholding
Reciprocity
None
Unemployment
$64,500 wage base, 2.4% new employer
Paid leave
Temporary Disability Insurance (TDI)
New hire report
Within 20 days

Which state's taxes apply

Work state
Hawaii taxes wages for work done in Hawaii. Withhold Hawaii income tax on the employee's wages.Source: Hawaii DOTAX, Booklet A Employer's Tax Guide (Rev. 2025), withholding from January 1, 2026 (PDF) (opens in a new tab), checked October 5, 2026
Withholding form
Form HW-4Source: Hawaii DOTAX, Booklet A Employer's Tax Guide (Rev. 2025), withholding from January 1, 2026 (PDF) (opens in a new tab), checked October 5, 2026
Reciprocity
No state exempts Hawaii residents from its withholding by reciprocity.Source: Hawaii DOTAX, Booklet A Employer's Tax Guide (Rev. 2025), withholding from January 1, 2026 (PDF) (opens in a new tab), checked October 5, 2026
Convenience rules
If your company is in Delaware, New York or Pennsylvania, the employee is assigned to an office there and works there on some days, that state taxes the days worked from home in Hawaii for the employee's convenience.Source: Delaware Division of Revenue, 2025 Form PIT-NON Instructions, Non-Resident Individual Income Tax Return (PDF) (opens in a new tab), checked October 6, 2026; NYS DTF, TSB-M-06(5)I, New York Tax Treatment of Nonresidents and Part-Year Residents: Application of the Convenience of the Employer Test to Telecommuters and Others (May 15, 2006, PDF) (opens in a new tab), checked October 6, 2026; PA Department of Revenue, PA Personal Income Tax Guide, Gross Compensation (opens in a new tab), checked October 6, 2026
Office days in your company's state
That state's day limit, if it has one, decides whether it withholds on those days: see its page, or the helper below.
An employee from another state working in Hawaii
Hawaii has a 60-day rule: no Hawaii withholding for a nonresident who works in Hawaii 60 days a year or fewer, when paid from an office outside Hawaii, if the rule's other conditions are met.Source: Hawaii Department of Taxation, Booklet A, Employer's Tax Guide (Rev. 2025, PDF) (opens in a new tab), checked October 6, 2026

Where to withhold: two states

Pick your company's state, the state where the employee lives and works from home, and the days a year the employee works at your office. The answer reads each state's rules from the data on these pages.

Your company is in
Employee lives and works from home in
Days a year at your office
Assigned to an employer office in New YorkMatters only in the states with a convenience rule (Connecticut, Delaware, New Jersey, New York and Pennsylvania), and only with office days there.

Income tax withholding

  • Hawaii: all wages.

No New York withholding: the employee does no work in New York.

Unemployment

Hawaii: the employee works from home there, so the work is localized in Hawaii.

Simplified: resident credits, dollar tests, local taxes and a move during the year are not worked out here. Each state's rule and its source are on its page.

Unemployment

The employee works from home in Hawaii, so the work is localized in Hawaii: pay Hawaii unemployment tax, not your company state's.

Agency
Hawaii Department of Labor and Industrial Relations, Unemployment Insurance DivisionSource: Hawaii DLIR UI Division, Employer Website (opens in a new tab), checked October 5, 2026
Wage base
$64,500 IndexedSource: Hawaii DLIR UI Division, Tax Rates and Weekly Benefit Amount (opens in a new tab), checked October 5, 2026
New employer rate
2.4% 2.4% UI contribution in 2026 (Schedule C, zero reserve ratio) plus the separate 0.01% Employment and Training assessment: 2.41% in total Surcharges not includedSource: Hawaii DLIR UI Division, Tax Rates and Weekly Benefit Amount (opens in a new tab), checked October 5, 2026

Open the account: Hawaii payroll tax registration

Temporary Disability Insurance (TDI) (opens in a new tab)

Status
ContributingSource: Hawaii DLIR DCD, TDI Frequently Asked Questions (opens in a new tab), checked October 5, 2026
Total rate
Set by the insurer or planSource: Hawaii DLIR DCD, TDI Frequently Asked Questions (opens in a new tab), checked October 5, 2026
Employee share
Up to 0.5%Source: Hawaii DLIR DCD, 2026 Maximum Weekly Wage Base and Maximum Weekly Benefit Amount (PDF, Dec. 10, 2025) (opens in a new tab), checked October 5, 2026
Employer share
Set by the insurer or planSource: Hawaii DLIR DCD, TDI Frequently Asked Questions (opens in a new tab), checked October 5, 2026
Small employers
NoneSource: Hawaii DLIR DCD, TDI Frequently Asked Questions (opens in a new tab), checked October 5, 2026

Register before the first payroll: the steps are on Hawaii payroll tax registration.

Hawaii employer rules

Employment law applies where the employee works, so these follow the employee into Hawaii.

Final pay
Fired: At discharge, or no later than the next working day Quit: Next regular payday; at quitting if the employee gave at least one pay period's noticeSource: Hawaii DLIR WSD, Unpaid Wages (Payment of Wages law, HRS ch. 388) (opens in a new tab), checked October 5, 2026
Pay frequency
At least twice a month on regular paydays set in advance; wages due within 7 days after the pay period ends (HRS 388-2)Source: Hawaii DLIR WSD, Unpaid Wages (Payment of Wages law, HRS ch. 388) (opens in a new tab), checked October 5, 2026
Pay notice
In writing at hire: rate of pay and the day, hour and place of payment (HRS 388-7(1)); any change to them in writing or by posted notice before it takes effect (HRS 388-7(2))Source: Hawaii Revised Statutes §388-7 (Notification, posting, and records) (opens in a new tab), checked October 5, 2026
New hire reporting
Within 20 days of the start date.Source: Hawaii Department of the Attorney General, CSEA, State Directory of New Hires Questions and Answers (FLO100, PDF) (opens in a new tab), checked October 5, 2026
E-Verify
No state E-Verify mandate for private employers or public contractors.Source: Hawaii Revised Statutes, Chapter 378 (Employment Practices), table of sections (opens in a new tab), checked October 5, 2026
Sick leave
No state sick leave law.Source: Hawaii DLIR WSD, Vacation and Sick Leave (opens in a new tab), checked October 5, 2026

When the employee moves

Re-check the work state and the registrations before the next payroll: a move changes which state's withholding, unemployment, paid leave and employer rules apply.

Registering your business in Hawaii, and whether one remote employee creates tax nexus for your company, are separate questions this page does not cover.

More on Hawaii

WORKLIO HCM

Payroll for employees who work from home in another state

Worklio HCM withholds by home and work state, reciprocity included, and handles city and county taxes. We help open state withholding and unemployment accounts when you hire somewhere new, and our registration service can register your employer tax accounts for you. Taxes are calculated, deposited and filed in every state and locality, and when an agency notice arrives, you upload it and our tax team resolves it. State paid leave contributions are withheld, too.

Remote employees in other states

Sources

The agency page or document behind each fact, as checked.

General information, not legal or tax advice. Rules change; confirm current requirements with the relevant agency or your advisor. You remain responsible for your employment taxes and for each state's rules.

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