Hawaiʻi minimum wage is $16 now and $18 on January 1, 2028

Act 114 (2022) set the floor at $16.00 on January 1, 2026 and $18.00 on January 1, 2028, with a tip credit of $1.25 now and $1.50 in 2028.

Hawaiʻi's minimum wage is $16.00 an hour today and rises to $18.00 on January 1, 2028, the last step in Act 114 (2022), now Hawaiʻi Revised Statutes section 387-2. Tipped staff may be paid $1.25 under the floor now and $1.50 under it in 2028, but only when wages plus tips reach $7.00 above the floor.

The schedule, step by step

Act 114 rewrote the wage table in HRS 387-2. The statute reads: "$12.00 per hour beginning October 1, 2022; $14.00 per hour beginning January 1, 2024; $16.00 per hour beginning January 1, 2026; and $18.00 per hour beginning January 1, 2028."

• October 1, 2022: $12.00
• January 1, 2024: $14.00
• January 1, 2026: $16.00 (in force now)
• January 1, 2028: $18.00

There is no step in 2027, nothing after 2028, and no automatic inflation adjustment. A new act would be needed to change it. Recheck HRS 387-2 each December for any change.

The tip credit rule

HRS 387-2(b) lets an employer count part of a tipped employee's tips toward the minimum wage. The allowed credit is "$1.25 per hour beginning January 1, 2024; and $1.50 per hour beginning January 1, 2028." The condition is strict: "the combined amount the employee receives from the employee's employer and in tips is at least $7.00 more than the applicable minimum wage."

Worked out for 2026: floor $16.00, credit $1.25, so the lowest cash wage is $14.75. The employee must receive at least $16.00 plus $7.00, which is $23.00 an hour in cash wage plus tips. If a slow lunch shift leaves a server at $22.00 combined, you owe the full $16.00 for those hours.

Worked out for 2028: floor $18.00, credit $1.50, cash wage $16.50, and the combined test rises to $25.00 an hour.

What it means for a restaurant or shop

The payroll effect is wider than the floor. Three things move together.

• The floor. Every hour at $16.00 costs $18.00 in 2028. That is a 12.5 percent increase on those hours ($2.00 divided by $16.00).
• Compression. A cook at $18.50 today will be $0.50 above the 2028 floor. Expect to lift the people just above the floor to keep the gap.
• The load on top. Payroll taxes and benefits are charged as a percentage of wages, so they rise with the wage.

Overtime still applies. HRS 387-3 requires "one and one-half times the regular rate" for hours over forty in a workweek, so in 2028 an overtime hour at the floor is $27.00.

How to plan prices and hours

Use the free calculator at hawaiiintelligence.com/tools/wage. It runs in your browser and stores nothing. The formula:

• Payroll increase = hours near minimum times (new floor minus today's wage, when positive) plus compression hours times the bump, all multiplied by (1 plus payroll load).
• Margin after the step = (revenue times margin today minus payroll increase) divided by revenue.
• Price increase that restores the margin = payroll increase divided by (revenue times (1 minus margin today)), assuming volume holds.

A round-number example. A café with 700 hours a month at $16.00, a 12 percent payroll load, and no compression: 700 times $2.00 equals $1,400, times 1.12 equals $1,568 more per month in 2028. On $60,000 of monthly revenue at a 10 percent margin, that is $6,000 of profit today and $4,432 after the step. Restoring the margin takes a 2.9 percent price increase ($1,568 divided by $54,000).

Then decide where the money comes from. Pick a mix.

• Prices: move the items with the steady demand first, in small steps, before January 2028.
• Hours: cut the hours that do not produce sales. Compare your busiest and slowest hours by revenue per labor hour.
• Menu and mix: fewer items, faster prep, fewer labor hours per dollar of sales.
• Tips: if you take the credit, check the $7.00 test every pay period and keep the record.

Start with the numbers. The free ten-second reading at hawaiiintelligence.com/reading shows how your business looks from public records, and Five systems every Hawaiʻi business runs on covers the back office that keeps payroll and pricing on one page.

Records, posting, and penalties

HRS 387-6 requires a "contemporaneous, true, and accurate record" of each employee's name, address, occupation, hours worked each day and each workweek, pay rates, gross wages, deductions, and net wages, and a legible pay statement each pay period. Employers must also "post and keep posted" the notices the director prescribes.

Act 115 (2025) amended HRS 387-12. A civil violation now carries a "penalty of not less than $500 or $100 for each violation, whichever is greater." Willful cases can be prosecuted as a misdemeanor with a "fine of not less than $500 nor more than $5,000." Paying the floor on time, with a clean record, is cheaper than any of it.

Questions owners ask

Does the minimum wage go up in 2027? No. The statute steps on January 1, 2026 and January 1, 2028 and nothing between. Any change after 2028 needs a new act. Check HRS 387-2 each December.

Can I pay a server $14.75 an hour in 2026? Only if that server's cash wage plus tips comes to at least $23.00 an hour. If it does not, you owe the full $16.00 for those hours. The test is written into HRS 387-2(b), and HRS 387-6 requires a contemporaneous, true, and accurate record of pay rates and wages.

Does the tip credit apply to cooks or dishwashers? The statute applies the credit to a "tipped employee." HRS 387-1 defines that as an employee in an occupation where the employee "customarily and regularly receives more than $20 a month in tips." Back-of-house staff who do not customarily receive tips do not fit that description. If you run a tip pool, get it reviewed before relying on the credit for anyone not serving guests.

When should I raise prices? Before the step, not after. The 2028 increase is public and dated, so the cost is known now. Small increases spread over 2026 and 2027 are easier to absorb than one jump in January 2028.

Sources

• Hawaiʻi Revised Statutes 387-2, minimum wage and tip credit: supports every rate, date, tip credit amount, and the $7.00 rule. capitol.hawaii.gov HRS 387-2. Fetched September 14, 2026.
• Hawaiʻi Revised Statutes 387-1, definitions: supports the tipped employee definition. capitol.hawaii.gov HRS 387-1. Fetched September 14, 2026.
• HB2510 CD1, enacted as Act 114 (2022): supports the schedule, tip credit steps, and the $7.00 rule as passed. capitol.hawaii.gov HB2510 CD1. Fetched September 14, 2026.
• Hawaiʻi Revised Statutes 387-3, overtime: supports the forty-hour, one and one-half times rule. capitol.hawaii.gov HRS 387-3. Fetched September 14, 2026.
• Hawaiʻi Revised Statutes 387-6, records and posting: supports the recordkeeping, pay statement, and posting duties. capitol.hawaii.gov HRS 387-6. Fetched September 14, 2026.
• Hawaiʻi Revised Statutes 387-12, penalties, as amended by Act 115 (2025): supports the $500 or $100 per violation civil penalty and the misdemeanor fine range. capitol.hawaii.gov HRS 387-12. Fetched September 14, 2026.
• Hawaii Intelligence wage calculator: supports the formula quoted above. hawaiiintelligence.com/tools/wage. Read September 14, 2026.

Information, not legal, tax, insurance, or financial advice.