Local guides / Hawaii / Honolulu
Bartenders & Servers in Honolulu, HI: taxes and retirement for 2026
For bartenders, servers, baristas and other workers paid largely in tips in Honolulu, HI. Hawaii has a graduated state income tax for 2026: 1.4% to 11% (top rate starts at $325,000 for single filers). Here are the 2026 rules, a worked example and the official sources.
What's different in Honolulu
- Local income tax
- No city income tax in Honolulu.
- City and County of Honolulu (Oahu) County Surcharge on Hawaii General Excise Tax (GET)
- Business income on Oahu that is taxed at the state's 4% GET rate, which covers most services and retail sales, also carries a 0.5% county surcharge (4.5% total), reported on state Forms G-45/G-49. Businesses may pass the tax on to customers at up to 4.712%. The surcharge runs from Jan. 1, 2007 through Dec. 31, 2030 and does not apply to the 0.5% wholesale or 0.15% insurance-commission rates.
- Also worth knowing
- No city or county income tax. The GET and the county surcharge are collected by the Hawaii Department of Taxation, not by the city; the 4.712% maximum pass-on rate for Oahu runs through Dec. 31, 2030. No general city business license requirement was confirmed on an official city site. No local gig-worker or freelancer pay ordinances were found. Population: Census Bureau Vintage 2025 estimate for July 1, 2025 (https://www2.census.gov/programs-surveys/popest/datasets/2020-2025/cities/totals/sub-est2025.csv).
Hawaii rules for bartenders & servers
- State income tax (2026)
- Hawaii has a graduated state income tax for 2026: 1.4% to 11% (top rate starts at $325,000 for single filers). Rates are percentages. Act 46 (2024) widened the brackets for 2025, and the 2026 brackets are the same as 2025. Single filers: 1.4% up to $9,600, rising through 12 brackets in all to 11% on taxable income over $325,000. The single standard deduction rises to $8,000 in 2026, and the brackets widen again in 2027 and 2029.
- State estimated tax
- You generally must pay estimated tax if you expect to owe at least $500 after withholding and credits, and your withholding and credits will be less than the smaller of 60% of this year's tax or 100% of last year's tax. April 20, June 20 and September 20, 2026, and January 20, 2027 (the 20th, not the 15th). The current-year safe harbor is 60%, not the federal 90%. Form N-200V.
- Hawaii general excise tax (GET)
- GET applies to gross income from all business activities, including independent contractors and freelancers. The rate is 4% for most services and retail sales, 0.5% for wholesaling and manufacturing, and 0.15% for insurance commissions. Honolulu, Kauai, Hawaii and Maui counties each add a 0.5% surcharge on 4%-rate activity through 2030. A GET license costs a one-time $20, and periodic returns are due on the 20th of the month after each period.
- Minimum wage (2026)
- $16.00 an hour; tipped cash wage $14.75 an hour. $16.00 from January 1, 2026 through December 31, 2027, then $18.00 on January 1, 2028. Employers may pay tipped workers up to $1.25 below the minimum ($14.75) only if wages plus tips total at least $7.00 more than the minimum wage. The tip credit rises to $1.50 on January 1, 2028.
- ABC test for unemployment insurance (HRS 383-6)
- Services for wages are treated as employment unless the Department of Labor and Industrial Relations is shown that the worker is free from control or direction, the service is outside the usual course or places of the business, and the worker is customarily engaged in an independently established trade of the same nature.
- State retirement program
- Hawaiʻi Retirement Savings Program is launching. It is built around W-2 employers and does not cover 1099 contractors through the employer mandate.
Federal rules for 2026
No tax on tips (2025 to 2028)
Eligible workers in occupations that customarily receive tips can deduct up to $25,000 of qualified tips a year from federal taxable income, whether or not they itemize. The deduction shrinks for modified AGI over $150,000 ($300,000 joint). It is income tax only: Social Security and Medicare still apply to tips.
Tips must be reported
Employees must report cash tips of $20 or more in a month to their employer by the 10th of the next month. Tips you did not report go on Form 4137. Only reported tips count toward the deduction.
Overtime deduction
W-2 workers who are owed overtime under federal law can also deduct the overtime premium, up to $12,500 a year ($25,000 joint), with the same income phase-out.
Roth IRA
Without a workplace plan, a Roth IRA lets you save up to $7,500 in 2026 ($8,600 at 50 or older) and withdraw qualified money tax-free in retirement, subject to income limits.
A worked example
| Tips deduction | $15,000 |
|---|---|
| Federal income tax without the deduction | $3,220 |
| Federal income tax with it | $1,420 |
| Federal income tax saved | $1,800 |
Single filer, standard deduction, 2026 brackets. Payroll taxes on tips are unchanged. Computed from 2026 IRS limits (Notice 2025-67, Rev. Proc. 2025-32) and the SSA wage base.
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Questions
Is there a local income tax in Honolulu?
No city income tax applies in Honolulu. Hawaii has a graduated state income tax for 2026: 1.4% to 11% (top rate starts at $325,000 for single filers).
What local business taxes apply to self-employed bartenders & servers in Honolulu?
City and County of Honolulu (Oahu) County Surcharge on Hawaii General Excise Tax (GET): Business income on Oahu that is taxed at the state's 4% GET rate, which covers most services and retail sales, also carries a 0.5% county surcharge (4.5% total), reported on state Forms G-45/G-49. Businesses may pass the tax on to customers at up to 4.712%. The surcharge runs from Jan. 1, 2007 through Dec. 31, 2030 and does not apply to the 0.5% wholesale or 0.15% insurance-commission rates.
Do bartenders & servers in Hawaii pay state income tax?
Hawaii has a graduated state income tax for 2026: 1.4% to 11% (top rate starts at $325,000 for single filers). Rates are percentages. Act 46 (2024) widened the brackets for 2025, and the 2026 brackets are the same as 2025. Single filers: 1.4% up to $9,600, rising through 12 brackets in all to 11% on taxable income over $325,000. The single standard deduction rises to $8,000 in 2026, and the brackets widen again in 2027 and 2029.
When are Hawaii estimated tax payments due for 2026?
You generally must pay estimated tax if you expect to owe at least $500 after withholding and credits, and your withholding and credits will be less than the smaller of 60% of this year's tax or 100% of last year's tax. April 20, June 20 and September 20, 2026, and January 20, 2027 (the 20th, not the 15th). The current-year safe harbor is 60%, not the federal 90%. The state form is N-200V.
Are there other Hawaii taxes for self-employed bartenders & servers?
Hawaii general excise tax (GET): GET applies to gross income from all business activities, including independent contractors and freelancers. The rate is 4% for most services and retail sales, 0.5% for wholesaling and manufacturing, and 0.15% for insurance commissions. Honolulu, Kauai, Hawaii and Maui counties each add a 0.5% surcharge on 4%-rate activity through 2030. A GET license costs a one-time $20, and periodic returns are due on the 20th of the month after each period.
What is the tipped minimum wage in Hawaii in 2026?
Hawaii's 2026 minimum wage is $16.00 an hour. Employers may pay tipped workers a cash wage of $14.75 an hour as long as tips bring them to the full minimum. $16.00 from January 1, 2026 through December 31, 2027, then $18.00 on January 1, 2028. Employers may pay tipped workers up to $1.25 below the minimum ($14.75) only if wages plus tips total at least $7.00 more than the minimum wage. The tip credit rises to $1.50 on January 1, 2028.
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Sources
- files.hawaii.gov/tax/news/announce/ann24-03.pdf
- files.hawaii.gov/tax/forms/current/n11ins.pdf
- labor.hawaii.gov/wsd/files/2022/06/HWHL-1_MW-Poster_Rev_6-22.pdf
- tax.hawaii.gov/geninfo/get/
- data.capitol.hawaii.gov/hrscurrent/Vol07_Ch0346-0398/HRS0383/HRS_0383-0006.htm
- tax.hawaii.gov/geninfo/countysurcharge/
State and local facts researched from official sources and independently re-checked; last verified October 2026, next scheduled review 2027-01-02. Educational information for 2026, not tax, legal or investment advice. Rules change; check the official sources listed and a tax professional for your situation. Gigaverse AI, Inc. is a financial technology company, not a bank, and not itself a registered investment adviser or broker-dealer.