| EFFECTIVE DATE | HAWAII MINIMUM WAGE |
| January 1, 2022 | $12.00 |
| January 1, 2024 | $14.00 |
| January 1, 2026 | $16.00 |
| January 1, 2028 | $18.00 |
Looking for minimum wage rates by state? Click here to view the minimum wage chart by state.
“Tipped employees” are classified as someone who regularly makes over $20 a month in tips. Similar to other employees, “tipped employees” have the right to make a minimum wage of $16.00 per hour. An employer can claim a $1.25 tip credit per hour, only paying employees $14.75 per hour in his or her paycheck. However, this can only be done as long as the employee makes a minimum of $16.00 per hour in addition to $7.00 in tips, making the total pay per hour at least $23.00 per hour.
Signed by President Trump on July 4, 2025, the One Big Beautiful Bill Act allows applicable employees, including those self-employed, to claim a tax reduction on qualified tips received from his or her occupation. The tip tax deduction is effective from January 1, 2025 through December 31, 2028.
The occupation must be listed by the IRS as “customarily and regularly” receiving tips and must be reported on a Form W-2 or other applicable statements that report qualified tips (ex: Form 4137 for tips not reported to the employer).
An employee can deduct an annual maximum amount of $25,000. For self-employed individuals, the deduction amount cannot exceed his or her net income from the trade or business where the tips were earned. If an employee’s modified adjusted gross income (MAGI) exceeds $150,000, or $300,000 for employees filing taxes jointly, the amount allowed to be deducted will be reduced by $100 for each $1,000 earned above the MAGI.
To be eligible for the tip tax deduction, employees must include a Social Security number on the tax return for the given tax year. If married, the employee must also file jointly to remain eligible. Even if individuals opt for a standard deduction (vs. itemized deductions) on a tax return, the individual is still eligible for the annual maximum deduction for tipped wages.
Note that self-employed individuals categorized in a Specific Trade or Business (SSTB) under section 199A are NOT eligible.
All employers must file information returns to the IRS or Social Security Administration (SSA), as well as deliver the applicable forms, including a W-2, to employees that show the cash tips received and the occupation of the tip recipient.
There are a few exemptions detailed in the Minimum Wage Revision Act; however, the primary exemption includes any person exempt under the Fair Labor Standards Act (FLSA) classifications.
The only minimum wage exception unique to Hawaii regards special wages for certain learner employees.
Employers may request a special certificate that allows for the following employees at least 16 years of age to be paid less than the state's minimum wage:
If approved by the Hawaii DLIR, the employer may pay a special minimum wage to the qualifying employees of no less than 75% of the state's rate. Special certificates are only valid for an entire school year.
Hawaii highlights a few unique exemptions that affect a worker's right to the state's minimum wage law:
The state of Hawaii recognizes the federal overtime regulations set forth by the FLSA. If an employee works more than 40 hours in an average seven-day workweek, the employee is to receive an overtime rate of 1.5 times the employee's regular hourly rate.
Hawaii does not require employers to give specific meal or rest breaks to adult employees; however, employers that choose to offer such breaks must adhere to the specific guidelines set forth by the FLSA, regarding payment and length.
For compliance with Hawaii labor laws, employers must visibly display the Hawaii minimum wage in a conspicuous location that all employees have access to in the workplace. An all-in-one Hawaii Labor Law Poster will cover all the required state and federal labor law postings.
Note that each time the minimum wage is updated, the labor law poster must be replaced in the workplace. A labor law poster subscription service will automatically provide updated mandatory notices that need to be posted for employees as additional changes take place in Hawaii.
Under Chapter 387, Section 12 of Hawaii's Wage and Hour Law, employers violating the state's wage and hour laws can be subject to the following penalties required by the Hawaii DLIR:
Businesses struggling to maintain minimum wage compliance or manage payroll may want to consider outsourcing payroll to a Hawaii payroll services company. Areas for additional knowledge and learning include the basics of payroll and what to know about modern payroll software.
To learn more about how Employer Pass is helping countless businesses maintain minimum wage compliance, contact us today or use the find a provider tool.