What Is Hawaii SDI Tax? Paycheck Deduction, Coverage, and Claims

There is no Hawaii SDI tax. The deduction you may see on your Hawaii pay stub is a Temporary Disability Insurance (TDI) premium contribution, not a state tax. Hawaii requires employers to carry TDI coverage for most private-sector workers, and the most your employer can withhold from your paycheck toward that premium is 0.5% of your covered wages, capped at $7.50 per week in 2026.¹ The money does not go to the state. It helps pay the premium on an insurance policy your employer buys (or self-insures) that partially replaces your wages if a non-work-related illness, injury, or pregnancy keeps you off the job.²

How Much Comes Out of Your Paycheck

The statutory ceiling is simple: 0.5% of your weekly wages, and never more than half the actual premium cost. For 2026, the weekly wage base is $1,500.21, so the arithmetic ceiling on your deduction is $7.50 per week.¹ Earnings above $1,500.21 in a given week are not subject to the deduction.

Many Hawaii employers pay the entire premium themselves and withhold nothing. If your pay stub shows no TDI line, that is why. If it shows a deduction, compare it against the 0.5% cap; anything larger violates state rules. The Department of Labor and Industrial Relations (DLIR) publishes a new wage base each December, so the dollar cap shifts slightly year to year.

What the Deduction Actually Buys You

If you become unable to work because of a non-work-related medical condition, TDI pays 58% of your average weekly wage, rounded up to the next dollar.³ In 2026, the maximum weekly benefit is $871.¹ If you earn less than $26 per week, the benefit equals your full average weekly wage.

Benefits run for up to 26 weeks per disability period or benefit year.⁴ Every claim includes a seven-day unpaid waiting period, with payments starting on the eighth day of disability.⁵ If the same condition flares again within two weeks of your return, it counts as one continuous period and you do not serve a second waiting week.

Pregnancy and childbirth recovery are covered the same way as any other medical condition.² There is no separate maternity benefit; you file the same form and receive the same 58% wage replacement for the period your doctor certifies you cannot work.

One important boundary: you cannot collect TDI at the same time as workers’ compensation, unemployment insurance, or federal disability benefits.⁶ Work-related injuries belong under workers’ comp. TDI only covers conditions that are not work-related.

Some employers run approved private plans with different terms, such as a shorter waiting period or a higher replacement rate for fewer weeks. Any private plan has to be approved by the DLIR and must be at least as favorable overall as the statutory minimum. Your HR department can tell you which plan applies to you.

Who Is Covered and Who Isn’t

Most private-sector employees in Hawaii are covered, along with state and county government employees.⁷ To qualify for benefits, you need to be in “current employment,” meaning you were working regular hours for your employer right before the disability began or within the prior two weeks.

Several groups are excluded by statute:⁸

Federal employees and employees of other states’ governments
Domestic workers in a private home earning less than $225 per calendar quarter from that employer
Insurance agents paid solely by commission
Real estate salespeople and brokers paid solely by commission
People working for a spouse or parent, and children under 21 working for a parent

Independent contractors, sole proprietors, LLC members, and partners are outside the TDI system entirely. There is no voluntary opt-in for self-employed workers under current law. If you receive a 1099, you’d need to buy short-term disability coverage on your own in the private market.

If you’ve recently left a job, coverage continues for two weeks after your last day of work, unless you’re immediately covered under a new employer’s plan.⁹ A disability that starts within that window can still be filed under the former employer’s plan.

Are TDI Benefits Taxed?

Federal tax treatment turns on who paid the premium.¹⁰ If your employer paid the full premium, your benefits are fully taxable as income. If you paid the entire premium yourself with after-tax dollars, the benefits are not taxable. When premiums are split, only the share attributable to your employer’s contribution is taxable.

Watch for the cafeteria plan trap. If you pay your share through pre-tax payroll deductions under a Section 125 plan, the IRS treats those premiums as paid by your employer, which makes the benefits fully taxable. To receive tax-free benefits, your share would need to be paid on an after-tax basis. If you expect taxable benefits, you can file Form W-4S with the insurance carrier to have federal income tax withheld, or make estimated payments with Form 1040-ES.¹⁰

Filing a Claim When You Need To Use It

Ask your employer for Form TDI-45, the Claim for TDI Benefits.⁶ You fill out the claimant’s section with your Social Security number, the date your disability began, and your last day worked. Describe the condition specifically; vague descriptions trigger follow-up requests that stall the claim.

A licensed healthcare provider has to complete the medical section. Hawaii accepts certifications from physicians, surgeons, dentists, chiropractors, osteopaths, naturopaths, physician assistants, advanced practice registered nurses, and accredited practitioners of recognized faith-healing groups. Without that signed certification the claim will be denied.

Submit the completed form to your employer or directly to their TDI carrier within 90 calendar days of the date your disability began. Missing that deadline can cost you benefits entirely, so file as soon as you reasonably can, even if some medical documentation is still coming.

If the carrier denies the claim, you’ll receive a Denial of Claim notice on Form TDI-46. You have 20 calendar days from the mailing date on that notice to appeal. Write your reasons on the TDI-46 itself and send two copies to the Disability Compensation Division in Honolulu or to the nearest DLIR field office. The clock starts from the date printed on the form, not the day you open the envelope, so check your mail if you’re expecting a decision.

1
State of Hawaii Department of Labor and Industrial Relations. 2026 Maximum Weekly Wage Base and Maximum Weekly Benefit Amount
2
State of Hawaii Disability Compensation Division. About Temporary Disability Insurance
3
Justia. Hawaii Revised Statutes 392-22 – Weekly Benefit Amount
4
Justia. Hawaii Revised Statutes 392-23 – Duration of Benefit Payments
5
Justia. Hawaii Revised Statutes 392-24 – Waiting Period
6
State of Hawaii Disability Compensation Division. Frequently Asked Questions About Temporary Disability Insurance
7
Justia. Hawaii Revised Statutes 392-3 – Definitions Generally
8
Justia. Hawaii Revised Statutes 392-5 – Excluded Services
9
Department of Labor and Industrial Relations, Disability Compensation Division. Instruction Sheet for Form TDI-15 TDI Self-Insurers Plan Certification and Agreement
10
Internal Revenue Service. Life Insurance and Disability Insurance Proceeds