Hawaii Administrative Rules
Title 18 - DEPARTMENT OF TAXATION
Chapter 235 - INCOME TAX LAW
Subchapter 3 - INDIVIDUAL INCOME TAX LAW
Section 18-235-61-05 - Payroll period

Universal Citation: HI Admin Rules 18-235-61-05

Current through August, 2024

(a) In general. Pursuant to section 235-61, HRS, and sections 18-235-61-01 to 18-235-61-14, an employer shall withhold taxes from wages paid to an employee for services rendered, unless otherwise exempted. The amount of tax the employer shall withhold from an employee's wages depends on the filing status of the employee, the number of exemptions the employee is eligible to claim, and the frequency of the payroll periods. The amount of tax shall be calculated by using the withholding tables or formula provided by the department.

(b) Daily payroll period. If an employee has a daily payroll period, the employer shall withhold taxes from the employee's daily wage. The employer shall use the daily or miscellaneous payroll period table provided by the department. However, if the wages are for a period of less than a week (seven days) and the employee verifies that the employee is not paid wages subject to withholding by any other employer during the same week, withholding may be calculated on a weekly payroll period basis.

(c) Miscellaneous payroll period. In order to calculate the amount of tax to withhold where an employee has either a miscellaneous payroll period, or has no payroll period, the employer shall:

(1) Count the number of days (including Sundays and holidays) in the period covered by the wage payment. If the wages are unrelated to a specific length of time (i.e., commissions paid upon completion of a sale), then the number of days in the wage payment shall be determined by counting the number of days from the date of the last payment to the date of the latter of: the last payment of wages made during the same calendar year; the date employment commenced (if during the same calendar year); or January 1 of the same calendar year.

(2) Determine the average wage per day by dividing the amount of the wage payment by the number of days covered by the wage payment.

(3) Compute the amount of tax to be withheld on the average wage per day by using the daily or miscellaneous payroll period table or formula provided by the department.

(d) Payroll period of less than a week. Where an employee is paid for a period of less than one week and signs a statement (subject to penalties set forth in section 231-34, HRS) verifying that the employee does not work for wages subject to withholding for any other employer during the same calendar week, then the employer is permitted to compute withholding based on a weekly payroll period, instead of a daily or miscellaneous payroll period. If an employer is eligible, but does not elect to use the weekly payroll period basis, the employer shall compute and withhold tax as if the aggregate amount of wages paid to the employee during the calendar week is for a daily or miscellaneous payroll period. An employer that elects to calculate withholding based on a daily or miscellaneous payroll period shall withhold, from each wage payment, an amount sufficient to ensure withholding of the correct amount of tax. If an employee subsequently begins work for wages subject to withholding for another employer, the employee shall notify the employer to which the employee gave the written statement within ten days. Thereafter, the employer must use the daily or miscellaneous payroll period table in computing the amount of tax to be withheld.

(e) Supplemental wages. If supplemental wages, such as bonuses, commissions, or overtime pay, are paid at the same time as regular wages, the amount of tax to be withheld shall be calculated based on the aggregate amount of supplemental and regular wages, as if it were a single wage payment for the payroll period.

If supplemental and regular wages are paid at different times, the employer may calculate the amount of tax to be withheld by aggregating the supplemental wages with either: the regular wages for the current payroll period, or the regular wages for the last preceding payroll period within the same calendar year. If supplemental wages are paid to an employee during a calendar year, for a period which includes two or more consecutive payroll periods, and other wages also are paid during the calendar year, the employer shall calculate the amount of tax to be withheld on the supplemental wages as follows:

(1) Determine the average wage for each payroll period by dividing the sum of the supplemental wages and the other wages paid for the payroll period by the number of payroll periods.

(2) To determine the amount of tax to be withheld from each payroll period, treat the average wage calculated in paragraph (1) as the amount of wages paid for the payroll period. The amount of taxes to be withheld shall be calculated by using the tables or formula provided by the department, given the length of the payroll period and the average wage paid for the payroll period.

(3) Lastly, from the sum of the taxes computed on the basis of the average wage per payroll period, subtract the sum of the taxes previously withheld or to be withheld from wages, other than supplemental wages, for the payroll periods. The balance, if any, constitutes the amount of the tax to be withheld from the supplemental wages.

Disclaimer: These regulations may not be the most recent version. Hawaii may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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