Taxes in Honolulu
Honolulu and Hawaii's real, current 2026 tax picture runs genuinely, honestly MIXED -- a genuinely high top income tax rate paired with a genuinely low property tax rate, a gross-receipts-based General Excise Tax that functions differently from a conventional sales tax, and full exemptions for Social Security and employer-funded pension income.
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Learn moreA Genuinely High Top Income Tax Rate, With a Further Increase Already Scheduled
Hawaii applies a real, current 12-bracket graduated individual income tax for 2026, running from 1.4% up to a top marginal rate of 11% (applying to single-filer taxable income above $200,000, or $400,000 married filing jointly) -- among the highest top marginal rates in the country. Act 46 (2024)'s 2026 standard deduction is $4,400 single / $8,800 joint, with further scheduled bracket and deduction increases through tax year 2031. Act 24 (2023) creates a separate, real, future 13% top bracket beginning tax year 2027 -- not yet in effect for 2026.
Hawaii's GET Is Legally and Functionally Not a Sales Tax
Hawaii's General Excise Tax (GET) taxes business gross receipts rather than consumer purchases, and businesses are legally permitted (not required) to pass it through to customers. The statewide base GET rate is 4.0% for 2026; the City and County of Honolulu levies an additional 0.5% county surcharge (in effect through December 31, 2030), for a combined 4.5% rate on most Oahu retail-level transactions. Because of the gross-up effect, businesses passing the full tax through may charge up to approximately 4.712% to fully recover it without over-collecting.
Property Tax Runs Genuinely Low-Rate, With a Real Dollar Caveat
As detailed on the property-taxes topic page, Honolulu County's effective property tax rate (~0.28%) is genuinely the lowest in the nation, though the real median dollar bill (~$2,553/year) is not correspondingly low given extreme home values.
Full Social Security and Employer-Pension Exemptions, With a Real Limitation
Hawaii does not tax Social Security income at all, regardless of amount or total income level, and fully exempts EMPLOYER-FUNDED pension income (federal, state, local government, military, or private employer) from state income tax. This record discloses a real, precise limitation directly: the EMPLOYEE-CONTRIBUTED portion of any retirement plan, along with distributions from traditional 401(k) plans and traditional IRAs, remains fully taxable at Hawaii's regular income tax rates.
Key takeaways
- Hawaii's 2026 top marginal income tax rate is 11% (applying above a relatively modest $200,000 single-filer threshold), among the highest in the nation, with a further 13% bracket arriving in 2027.
- Hawaii's GET (4.5% combined on Oahu) is legally and functionally not a sales tax -- it taxes business gross receipts, with a real gross-up/pass-on effect pushing the rate a business may charge to approximately 4.712%.
- Property tax runs genuinely low-rate (~0.28% effective, the nation's lowest), though the real dollar bill (~$2,553/year median) is not correspondingly low.
- Social Security income and employer-funded pension income are fully exempt from Hawaii state income tax, though employee-contributed retirement income (including traditional 401(k)/IRA distributions) remains fully taxable.
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