Hawaii Tax Calculator
Hawaii Income Tax
Hawaii has the most graduated income tax system in the nation with 12 separate brackets. Rates start at just 1.4% on the first $2,400 of taxable income and climb to 11% on income over $200,000. The 11% top rate is the second highest in the nation, behind only California's 13.3%. The large number of narrow brackets means the effective rate increases very gradually, which creates a smooth progression but also makes the system quite complex.
Hawaii's standard deduction is $2,200 for single filers and $4,400 for married filing jointly, which is substantially lower than the federal standard deduction. The state also provides a personal exemption of $1,144 per person. These lower thresholds mean that Hawaii starts taxing income earlier than most states. Hawaii conforms to many federal tax provisions but has its own unique adjustments.
For high earners, Hawaii's combined federal and state tax burden can be among the highest in the nation. A single filer earning $300,000 would face a marginal rate of 11% on state income plus up to 35% federal, before FICA. The effective state rate at that income level would be approximately 8.5%, significantly higher than most other states.
| Taxable Income (Single) | Rate |
|---|---|
| $0 – $2,400 | 1.4% |
| $2,401 – $4,800 | 3.2% |
| $4,801 – $9,600 | 5.5% |
| $9,601 – $14,400 | 6.4% |
| $14,401 – $19,200 | 6.8% |
| $19,201 – $24,000 | 7.2% |
| $24,001 – $36,000 | 7.6% |
| $36,001 – $48,000 | 7.9% |
| $48,001 – $150,000 | 8.25% |
| $150,001 – $175,000 | 9.0% |
| $175,001 – $200,000 | 10.0% |
| Over $200,000 | 11.0% |
Hawaii General Excise Tax (GET)
Hawaii does not have a traditional sales tax. Instead, it levies a General Excise Tax (GET) at a base rate of 4.0%, with an additional 0.5% county surcharge on Oahu (Honolulu), bringing the effective rate on Oahu to 4.5%. While 4.0% may seem low compared to sales taxes in other states, the GET is fundamentally different and significantly broader in scope.
The GET is imposed on the gross income of businesses for the privilege of doing business in Hawaii, not on the consumer's purchase. This means it applies to virtually all business transactions, including services, wholesale sales, and even business-to-business transactions. Because the tax is levied at each stage of the supply chain (without the input tax credits that a VAT system provides), it creates "tax pyramiding" where the effective tax burden on final goods can be significantly higher than the stated 4% rate. Economists estimate the embedded GET can add 13-15% to the final cost of some goods.
Businesses are allowed to pass the GET on to consumers, and most do, by adding a visible surcharge (typically 4.712% to account for the tax on the tax itself, since the pass-through amount is also taxable). Groceries, medical services, rent, and most necessities are all subject to the GET, unlike most states where these items are exempt from sales tax.
Hawaii Property Tax
Hawaii has the lowest effective property tax rate in the United States at approximately 0.27%. This remarkably low rate exists because Hawaii has the highest median home values in the nation (over $800,000), so even small tax rates generate substantial revenue. Hawaii's property tax is administered by the four counties (Honolulu, Hawaii, Maui, and Kauai), each setting its own rates.
Hawaii uses a tiered property tax system that taxes different property types at different rates. Owner-occupied residential properties receive the lowest rates. Investment properties, vacation rentals, and commercial properties are taxed at significantly higher rates. The homestead exemption for owner-occupied homes is generous: Honolulu provides a $100,000 exemption from assessed value, with higher exemptions for residents aged 65 and older (up to $160,000). This system is designed to protect local homeowners from the impact of high property values driven by mainland and international investment.
Hawaii's Unique Tax Landscape
Hawaii's tax structure reflects its unique geographic and economic situation. As an island state, nearly everything must be imported, contributing to a cost of living approximately 90% above the national average. The broad-based GET provides stable revenue but adds to consumer costs. The high income tax rates fund extensive social services. Despite these high taxes, Hawaii consistently ranks among the top states for quality of life, health outcomes, and life expectancy. The state's tourism-driven economy means that a significant portion of GET revenue comes from visitors, effectively exporting some of the tax burden.
Hawaii vs. Other States
- California — California's top income tax rate (13.3%) exceeds Hawaii's 11%, but California's rate only applies above $1M. For most high earners ($200K-$500K), Hawaii's rate is actually higher. California has higher sales tax (8.68%) but higher property tax (0.71%). Hawaii's GET is broader in scope despite the lower visible rate.
- Washington — Washington has no income tax, a dramatic advantage over Hawaii's 11% top rate. Washington's sales tax (10.25% avg) is higher in rate but narrower in scope than Hawaii's GET. Property tax is higher at 0.84%. Washington is far more tax-friendly for high earners.
- Oregon — Oregon has graduated income tax up to 9.9%, lower than Hawaii's 11%. Oregon has no sales tax, a major advantage. Property tax is 0.87%. Oregon is more tax-friendly overall despite its high income tax.
- Texas — Texas has no income tax, no GET equivalent, and relies heavily on 8.20% sales tax and 1.60% property tax. For high earners, Texas offers dramatic savings over Hawaii's 11% income tax.