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Hawaii · tax year 2026

Does Hawaii tax tips and overtime?

Tips are covered here, overtime is not.

Hawaii is one of only two states that take one of these deductions and refuse the other. Act 35 of 2026 adopted the federal tips deduction but expressly declined the overtime one, so tips cut your Hawaii tax and overtime does not. Hawaii then taxes what is left after an $8,000 standard deduction and a $1,144 exemption per person, at rates from 1.4% to 11%.

What it means on a real paycheck

Take a single filer earning $50,000 a year, $8,000 of it in tips. Against the same person with no tips to declare, the federal deduction is worth $960.

In Hawaii it is worth $563 more, because the state follows the federal deduction. Together that is $1,523.

How Hawaii works out the tax

Hawaii charges graduated rates from 1.4% up to 11%, across 12 bands, after a standard deduction of $8,000 single or $16,000 filing jointly and an exemption of $1,144 a person. It begins from your federal adjusted gross income and applies its own reliefs from there.

Your own numbers

Your gross pay before any taxes or deductions.

Married filing separately cannot claim these deductions at all, so it is not offered here.

Traditional, pre-tax. Lowers income tax but not Social Security or Medicare.

Pre-tax cafeteria-plan premiums. These lower income tax and FICA.

Take-home pay per paycheck (26 per year)

$1,888

$49,089 a year after taxes and deductions.

Hawaii is one of only two states that take one of these deductions and refuse the other. Act 35 of 2026 adopted the federal tips deduction but expressly declined the overtime one, so tips cut your Hawaii tax and overtime does not. Hawaii then taxes what is left after an $8,000 standard deduction and a $1,144 exemption per person, at rates from 1.4% to 11%. See what that costs you →

Where the money goes each year

Gross salary$62,000
Federal income taxTop rate applied: 12%−$5,260
Social Security−$3,844
Medicare−$899
State income tax (HI)Graduated brackets on $52,856 of state taxable income−$2,908
Take-home pay$49,089

Per paycheck

Gross$2,385
Taxes withheld−$497
Net$1,888

Estimate for tax year 2026 assuming the standard deduction, no dependents or credits, and even pay across the year. Your employer withholds using your Form W-4, so an individual paycheck can differ. Effective total tax rate: 20.82%. Not tax advice.

Where these figures come from

Hawaii’s rates and reliefs here were taken from Hawaii’s own publication and last checked on 2026-08-05. A state appears in this calculator only once its figures have been read off that state’s own paperwork and covered by tests — never estimated, and never copied from another site.

Figures on this page are for tax year 2026 and were last checked against the primary sources on 2026-07-31. See our sources. This is an estimate, not tax advice.

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