The Hawaii minimum wage is $16 per hour as of 2026, but two additional increases are on the horizon. With Hawaii’s exceptionally high cost of living, the Hawaii state minimum wage is scheduled to increase to $18 in 2028 and more in the years to come.
What you’ll learn
What you’ll learn
Key takeaways
- Hawaii’s current minimum wage is $16 per hour, and it is scheduled to increase to $18 per hour on January 1, 2028, to combat the unusually high cost of living in the Aloha State
- The minimum wage in Hawaii is significantly higher than the federal minimum wage rate of $7.25 per hour
- Tipped employees can be paid as low as $14.75 per hour as long as their tips bring their pay up to at least $16 per hour
- Automated payroll software makes it easy to incorporate ongoing changes to Hawaii’s minimum wage, so your business is always in compliance and ahead of the game
This comprehensive guide to minimum wage in HI for local businesses will cover tipped employees, the planned minimum wage increases, labor standards, potential fines and penalties for noncompliance, and the importance of tracking federal and state payroll updates to maintain compliance for your Hawaii business.
Current minimum wage in Hawaii (and how it compares nationally)
To support Hawaii residents who have the highest average cost of living across the entire US, HI rates have increased from 2018 to 2028 as follows:
| Minimum wage per hour | Date effective |
| $10.10 | January 1, 2018 |
| $12 | October 1, 2022 |
| $14 | January 1, 2024 |
| $16 | January 1, 2026 |
| $18 | January 1, 2028 |
These recent state minimum wage rates are significantly higher than the federal minimum wage of $7.25 per hour. Presently, 34 state minimum wages, including Hawaii, exceed the federal requirement.
Due to the notably high cost of living in Hawaii, a living wage in the state for a single individual is $31.01 per hour, more than double the current minimum wage per hour. That figure increases to more than $46 per hour for a working couple with three kids and more than $66 per hour for a family of four with one working adult.
Is $40 an hour a good wage in Hawaii?
Depending on individual and family circumstances, it might be enough to cover expenses in the Aloha State. Factors include household size, as well as food, housing, and transportation expenses.
Scheduled increases beyond 2028 (and the push for a living wage)
While Hawaii’s statewide minimum wage is set to cap at $18 per hour in 2028, some local efforts are gaining traction to close the gap between that rate and the actual cost of living. For example, the Public First Law Center recently proposed a Honolulu Charter amendment requiring the City Council to set a new local living wage every five years.
Because state and federal laws allow cities to establish their own wage standards, Honolulu employers should monitor these legislative updates closely. If adopted, you may need to adjust your payroll to meet a new, higher baseline specifically for the City and County of Honolulu.
Tipped wage rules and exceptions in Hawaii
There are some exceptions to the state’s rules on hourly minimum wage, particularly when it comes to your tipped employees:
Your business can pay tipped employees as little as $14.75 per hour provided that employees’ tips and the $14.75 rate add up to $16 per hour or more.
Before this takes place, you must let team members know about the lower pay rate and the tip credit. It’s a good idea to communicate wage changes early and often. Managers, supervisors, and employers can’t participate in tip pools. However, workers can voluntarily pool their tips with non-tipped employees if they are paid the full minimum wage rate without a tip credit.
In addition, there are a few exceptions to the state’s minimum wage. Executives and professional employees who make $4,000 per month or more are exempt from minimum wage laws, and full-time students may be paid less than minimum wage if your business receives a supporting certificate from the US Department of Labor.
Employer compliance responsibilities
As a business owner, manager, or operator in the state of Hawaii, you have certain compliance responsibilities that you must meet:
- Pay the current minimum wage per hour on each date that the rate increases. This will require some pre-planning and budgeting.
- Keep accurate records of all employee wages and hours as required by the Fair Labor Standards Act (FLSA). Employees must receive payroll statements on payday that clearly indicate these hours and wages.
- Stay on top of any minimum wage updates and other changes to local labor laws.
- Comply with overtime rules for non-exempt employees who work more than 40 hours in a given work week.
- Perform regular payroll audits to make sure your business remains in compliance.
Automated payroll software makes it easy to update team member wages and to pay every employee on time, every time. OnPay also offers a Hawaii hourly paycheck calculator to help your payroll team stay accurate.
Penalties for noncompliance
Failing to meet Hawaii’s minimum wage rules can include potential fines, legal action, and more, such as:
- A fine of $500 to $5,000
- Back pay for all underpaid wages
- Legal action and payment of your employee’s legal fees
- Prison
In other words, it pays to stay compliant.
Payroll that all businesses can count on
“OnPay is an easy-to-use online platform to manage your payroll and HR information, and is especially great for small businesses. Their staff always answers questions quickly through their online chat feature, and their tools offer the flexibility to do payroll the way I need to. I can literally do payroll anytime, anywhere. As a small business owner who has another full-time job, this is absolutely invaluable.”
— Cheryl Van Sciver, Balanced Planet Yoga, LLC
How payroll software helps manage wage changes
While ongoing rate changes can be complicated if your business still handles payroll manually, automated payroll software can help simplify the entire process. Automated payroll software can help your Hawaii business manage ongoing changes with the following:
- Automate wage updates to eliminate any confusion or errors related to payroll and the state minimum wage.
- Incorporate compliance updates so you don’t have to worry about potential fines or penalties.
- Provide customized and built-in reporting on payroll and other HR processes to support your business as the state minimum wage continues to rise.
- Integrate paychecks and other payroll processes with HR software for better communication.
- Maintain a clear record of all minimum wage changes and payments made to each employee.
Automated payroll software such as OnPay can keep your business in sync, in compliance, and in order.
Staying ahead of Hawaii’s wage changes
When your business stays ahead of Hawaii’s wage changes, you can properly budget for wage increases while also preparing your payroll and HR teams for what’s to come, and remaining in compliance with labor laws, no matter how often the state’s minimum wage rate changes.
OnPay can help. Our award-winning payroll makes it easier to run and grow your business and accurately pay your team in record time. We also offer support with HR administration, onboarding, insurance, retirement planning, and other benefits for your Hawaii business.
Get started with OnPay today to save time, eliminate manual payroll errors, get payroll right, and increase your compliance with Hawaii’s wage rules and regulations.
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Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.