Key figures
Hawaii advisory
2026, with sources
- Research credit
- Certified by DBEDTRequires DBEDT certification; claimed with Form N-346.
Health care is part of payroll
Under the Prepaid Health Care Act, a Hawaii employer must offer health coverage to employees who work at least 20 hours a week and earn at least 86.67 times the Hawaii minimum hourly wage a month — $1,386.72 at the 2026 minimum — after four consecutive weeks. The employer pays at least half the premium, and the employee’s share can’t exceed 1.5% of monthly wages.
For a startup this means a group health plan from the first eligible Hawaii employee, not when headcount justifies it. Budget it as payroll cost; a Hawaii hire costs more than the salary plus taxes suggests.
Where founders get Hawaii wrong
Hawaii’s rules look familiar but differ at the details, and most are about cost rather than rate.
- Treating GET like sales tax: it is the company’s tax on gross income, owed whether or not it is passed on.
- Expensing R&D for Hawaii after 2025: §174A doesn’t apply there.
- Missing Prepaid Health Care and TDI for a first remote hire.
- Filing on the 15th: Hawaii’s deadlines fall on the 20th.
The federal baseline
This page covers what Hawaii adds. The federal rules underneath it apply here too.
Common questions
What is the biggest Hawaii-specific cost of hiring?
The Prepaid Health Care Act. Hawaii is the only state that requires employers to provide health insurance: employees working 20 or more hours a week who earn at least 86.67 times the minimum wage a month must be covered after four consecutive weeks, with the employer paying at least half the premium.
Does Hawaii have an R&D credit?
Hawaii has a tax credit for research activities, but it runs through a certification by DBEDT and a claim on Form N-346, with conditions set in statute. Check DBEDT’s current program rules — eligibility, caps and the certification deadline — before counting on it in a runway model.
Founder guides on this
- R&D taxThe R&D tax credit and Section 174A for startupsEngineering salaries can earn a federal R&D credit against payroll tax, and Section 174A lets you deduct US research again. What qualifies, what to track.
- RunwayBurn rate and runway: how to calculate them correctlyGross burn, net burn and months of runway, done the way an investor checks them: from cash, averaged, and with the hires you’ve already committed to.
- PeopleContractor or employee? Classification for startupsContractor or employee depends on control, not the contract. The IRS test, state rules, 1099s, payroll registration and the cost of getting it wrong.
More of the Hawaii guide
- AccountingAccounting and state tax in HawaiiCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in HawaiiSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesPayables and contractors in HawaiiPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in HawaiiWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in HawaiiRegistering to do business, annual reports, franchise tax and the filing calendar
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.