Hawaii Minimum Wage 2025: What Employers Need to Know

If you run a US small business with employees in Hawaii, staying updated on wage laws is essential to ensure payroll compliance and avoid penalties. As of January 1, 2025, Hawaii’s minimum wage remains at $14.00 per hour, continuing the stepped increase plan passed under House Bill 2510. While there’s no rate hike this year, the next jump is just around the corner.

Let’s break down what this means for employers in 2025 and how accounting services with payroll automation can help keep your business compliant.

Current Minimum Wage Rate in Hawaii

• $14.00/hour: This rate has been in effect since January 1, 2024.

• It is higher than the federal minimum wage of $7.25/hour, which means Hawaii employers must use the state rate.

• Applies to non-tipped employees working in any sector across the state.

Scheduled Wage Increases (Under House Bill 2510)

If you’re planning payroll budgets, take note of these upcoming increases:

• $16.00/hour – Effective January 1, 2026

• $18.00/hour – Effective January 1, 2028

These changes are part of Hawaii’s long-term plan to increase wages gradually and offer employees a livable income standard.

Tipped Employees and Tip Credits

• Employers may take a tip credit, but only if tips plus wages meet or exceed the standard minimum wage.

• The specific tip credit rate is based on a formula set by the Hawaii Department of Labor and Industrial Relations (DLIR).

• Businesses must ensure transparency in pay structure and accurate reporting to remain compliant.

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Payroll and Compliance Tips for 2025

Even without a rate change this year, employers should:

• Ensure payroll systems reflect the correct $14/hour rate

• Review employee classifications (e.g., tipped vs. non-tipped)

• Communicate clearly with employees about their wage structure

• Document all tips, hours, and wages in compliance with labor laws

• Stay informed of any updates from DLIR and IRS regulations for small businesses

Using accounting services with integrated payroll features and compliance tools can help streamline these tasks and reduce the risk of errors.

Why Minimum Wage Compliance Matters

Failure to comply with wage laws may result in:

• Back pay and fines

• Damaged employer reputation

• Potential legal disputes with employees

Payroll compliance is not just about paying on time—it’s about accurate classifications, proper deductions, and consistent documentation. Staying ahead of wage law changes is a smart move for every US small business.

Preparing for 2026 and Beyond

The next wage increase in Hawaii is less than a year away. Here’s how to prepare:

• Update your payroll forecast for 2026 and 2028 increases

• Review labor cost projections

• Consider whether your pricing, staffing, or service models need adjustments

Early planning ensures your business doesn’t absorb wage hikes all at once, and accounting support can assist with forecasting these costs.

Summary

Hawaii’s minimum wage for 2025 remains at $14.00/hour, giving businesses a window to prepare for the next increase in 2026. Employers should use this time to ensure payroll compliance, educate their teams, and align systems for smooth transitions. Leveraging accounting services that support payroll and wage law tracking can help US small businesses stay ahead of regulatory changes and keep operations running smoothly.

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