Nanny Taxes in Hawaii

Household employers need to comply with tax, wage, and labor laws that affect nannies, in-home senior caregivers, and other household employees. While federal laws cover employers in all states, there are also state- and city-specific regulations that employers must follow. Here’s what you need to know about nanny taxes in Hawaii.

Hawaii Minimum Wage

Household employees must be paid at least the highest of the federal, state, or applicable local minimum wage rates. Hawaii’s state minimum wage of $14/hour applies. This rate will increase to $16/hour on January 1, 2026; and then to $18/hour on January 1, 2028.

Overtime

Household employees in Hawaii, including live-in employees, are required to be paid at least time and a half for hours worked over 40 in a seven-day workweek.

Domestic Worker Protections

Hawaii’s Domestic Worker Protection law requires household employers to provide their employees with specific wage and employer information on their pay stubs including rates of pay and total hours, as well as listing the employer name and address on the pay stub. Employers must also maintain accurate and timely wage recordkeeping. The law also establishes basic rights and protections for household employees. They must be paid at least minimum wage and overtime for hours worked over 40 in a week. Overtime also applies to live-in employees.

The Domestic Worker Protection law also makes it illegal for a household employer, even if they have just one employee, to discriminate against a household employee in compensation or in terms, conditions, or privileges of employment because of race, sex, including gender identity or expression, sexual orientation, age, religion, color, ancestry, disability, or marital status. Prohibited discrimination includes sexual harassment in the form of pressure to engage in unwelcome sexual activity; sexual assault; verbal harassment or abuse that is racial or sexual in nature and creates a hostile work environment; and unequal pay based on race, ancestry, or other prohibited bases.

Learn more about Hawaii’s domestic worker protection laws.

Hawaii State Unemployment Tax & Rate

In Hawaii, the new employer SUI (state unemployment insurance) rate is 3.0 percent on the first $59,100 of wages for each employee. Employers with previous employees may be subject to a different rate of up to 5.8 percent. This is an employer-only tax. Household employers in Hawaii also pay an Employment & Training Assessment of 0.01 percent.

Workers’ Compensation Insurance

Household employers in Hawaii are required to have workers’ compensation coverage for any employee working solely for personal, family, or household purposes whose wages are $225 or more during a calendar quarter and during each completed calendar quarter of the preceding 12-month period. Get a quote on workers’ compensation insurance.

Hawaii Prepaid Health Care Law

Under the Prepaid Health Care Act, Hawaii employers are required to provide health care coverage for eligible employees to ensure protection against the high cost of medical and hospital care for nonwork-related illnesses or injuries. Health insurance must be provided for employees who work 20 or more hours per week after four consecutive weeks of employment. The worker also must earn a monthly wage of 86.67 times the minimum wage for eligibility.

Employers may obtain health coverage by purchasing an approved healthcare plan from a healthcare contractor or a Hawaii-licensed insurance carrier.

Learn more about the Hawaii Prepaid Health Care Law.

Helpful Links for Nanny Taxes in Hawaii

Hawaii Department of Labor and Industrial Relations

Hawaii Department of Taxation

Federal Regulations

All household employers need to follow certain federal regulations including:

Fair Labor Standards Act (FLSA) Classification Guidelines

• Household workers are considered employees and not independent contractors. Learn more about misclassifying employees as independent contractors.
• Household workers are also non-exempt employees, which means they receive overtime pay of at least time-and-a-half for hours worked over 40 per workweek. Learn more about overtime pay.

FICA Taxes

Social Security and Medicare taxes are commonly referred to as FICA taxes. If you pay cash wages of $2,700 or more to any household employee in 2024 (or will pay a domestic worker $2,800 or more in 2025), you must withhold and pay FICA taxes. FICA taxes are 15.3 percent of cash wages. As an employer, you pay 7.65 percent (6.2 percent for Social Security and 1.45 percent for Medicare). Your employee's share is also 7.65 percent, which you can withhold from their wages or choose to pay yourself. You don't withhold or owe FICA taxes on wages you pay to your spouse, child under the age of 21, parent, or any employee under 18 at any time during the calendar year.

Federal Unemployment Tax (FUTA)

If you pay a household employee total cash wages of $1,000 or more in any calendar quarter, you'll owe federal unemployment tax. This is an employer-only tax. FUTA is six percent of cash wages on the first $7,000 you pay an employee.

Mileage Reimbursement

If your employee uses their own car in the course of their work, you can reimburse them for mileage. For 2024, the IRS has set the optional standard mileage rate at 67 cents per mile driven. This rate increases to 70 cents per mile on January 1, 2025. Paying mileage is not mandatory or you can reimburse your employee at a different rate. However, if the cost of mileage causes your employee to fall below minimum wage, then you need to reimburse them for mileage.

GTM Can Help with Nanny Taxes in Hawaii

Call (800) 929-9213 for a free, no-obligation consultation with a household employment expert. We’ll answer all your questions and show you how to comply with wage, tax, and labor laws as a household employer. Or, if you’re ready to have GTM Payroll Services handle it all for you, get started with our nanny payroll and tax service.