Hawaii Household Employer Guide 2026
Your household employee — a nanny, caregiver, housekeeper, or anyone who works in your Hawaii home — is a W-2 employee. Hawaii is a high-compliance household-payroll state: workers' comp, Temporary Disability Insurance, state income-tax withholding, unemployment filings, and Prepaid Health Care Act coverage for many 20+ hour/week employees.
Start Payroll Free →When the rules apply
Hawaii household employers mainly need to watch federal payroll thresholds, Hawaii's first-dollar UI/TDI rules, state withholding, and the PHCA health-coverage threshold.
How Nest Payroll handles this
Each pay period, you pay your employee the net amount directly — through Venmo, Cash App, Zelle, your banking app, or by check. Nest generates the pay stub and calculates federal payroll taxes, Hawaii withholding, UI, and TDI deductions.
Federal taxes — quarterly EFTPS payments
At the end of each federal quarter, Nest debits your bank account for federal taxes owed and remits them to the IRS via EFTPS. At year-end, Schedule H on your Form 1040 reconciles those household payroll taxes.
Hawaii state taxes — UC-B6, HW-14, and TDI
Nest supports Hawaii unemployment reporting on Form UC-B6, Hawaii withholding on Form HW-14 when applicable, and TDI tracking on each pay stub. PHCA health coverage is purchased separately through a state-approved carrier.
Set up payroll in 5 minutes.
Nest handles Hawaii payroll calculations, paystubs, UC-B6 unemployment filings, HW-14 withholding support, TDI tracking, and year-end Schedule H. PHCA health coverage is purchased separately through a Hawaii-approved carrier.
Start Payroll Free →Setup checklist (before they start)
Hawaii Workers' Compensation Insurance — required
Hawaii requires workers' compensation insurance for employers with one or more employees, including household employers. There is no broad household-employer exemption.
Hawaii Temporary Disability Insurance (TDI)
Hawaii requires Temporary Disability Insurance coverage for employers with one or more employees. TDI provides partial wage replacement when an employee cannot work due to a non-work-related illness or injury.
Employers may withhold up to 0.5% of weekly wages from employees, capped at $7.50/week in 2026. The employer pays any remaining TDI premium. Coverage is purchased through a licensed Hawaii TDI carrier.
Hawaii Prepaid Health Care Act (PHCA)
Hawaii's PHCA generally requires employer health coverage when an employee works 20 or more hours per week for four consecutive weeks and earns at least 20 times the state minimum hourly wage per week. For 2026, that weekly earnings threshold is $320/week.
Form I-9 (Employment Eligibility)
Have your employee complete the Form I-9 at hire to verify they're authorized to work in the United States. You don't submit this anywhere — keep it filed in case of audit.
Federal W-4 + Form HW-4
The federal W-4 determines federal income tax withholding if you and your employee agree to withhold it. Hawaii uses Form HW-4 for state withholding.
Hawaii New Hire Reporting
Hawaii requires all employers to report newly hired and rehired employees to the Hawaii Child Support Enforcement Agency within 20 days of the hire date.
You'll provide your employee's name, address, SSN, hire date, and your contact information.
Required Employment Posters
Hawaii requires several employment posters in the workplace. For a household, "the workplace" is your home — but you should still keep a binder with the required notices and confirm with your employee that they've reviewed them. Required posters include:
- Hawaii Minimum Wage and Overtime poster (HI DLIR)
- Hawaii TDI notice (HI DLIR Disability Compensation Division)
- Hawaii Prepaid Health Care Act notice
- Hawaii Workers' Compensation notice
- Hawaii Family Leave notice (if you have 100+ employees, otherwise optional)
- Federal "EEO is the Law" + FLSA Min Wage posters
Written Work Agreement
Hawaii does not require a written work agreement for household employment, but having one in writing protects everyone. A good agreement covers: pay rate, hours, schedule, duties, paid time off, holiday pay, sick leave accrual, mileage reimbursement policy, termination process, and confidentiality. Use Nest's free Nanny Contract Template to get started.
Pay & compensation
Minimum Wage — $16.00/hr (Jan 1, 2026, scheduled $18 on Jan 1, 2028)
Hawaii's minimum wage is $16.00 per hour as of January 1, 2026, up from $14.00 in 2024–2025 (under the staircase set by Act 114, SLH 2022, codified at HRS § 387-2). The wage will rise again to $18.00 on January 1, 2028.
Overtime — 1.5× regular pay over 40hr/week
| Worker type | Overtime rule | Source |
|---|---|---|
| Live-out (works at your home but doesn't reside there) | 1.5× regular rate over 40 hours per week | FLSA + HRS § 387-3 |
| Live-in (resides at your home) | Exempt from FLSA overtime; no Hawaii state rule extending overtime to live-in domestic workers | 29 USC § 213(b)(21) |
"No Tax on Overtime" Deduction (2025–2028)
The federal overtime deduction may let household employees deduct the premium portion of qualifying overtime pay on their personal tax return. This is a federal income-tax rule; it does not change how you calculate overtime, FICA, Hawaii withholding, TDI, PHCA, or payroll records.
Pay Frequency
Household employees are usually treated as non-exempt hourly workers under FLSA rules — even when you've agreed to pay a "salary," federal FLSA treats it as a wage covering a fixed number of hours per week, with overtime owed on hours past 40.
Under HRS § 388-2, Hawaii employers must pay wages at least twice per month, with no more than 7 days between the end of a pay period and payment. Most household payroll arrangements pay weekly or biweekly to keep cash flow predictable for both sides.
Mileage Reimbursement
Hawaii does not require employers to reimburse mileage at the IRS standard rate, but if you ask your employee to use their personal vehicle for work-related driving (e.g., kid pickups, errands), you should reimburse them. The 2026 IRS standard mileage rate is 70 cents/mile for business use. Reimbursement at the IRS rate is non-taxable income for the employee.
Paystub Requirements
Under HRS § 388-7, Hawaii employers must provide an itemized wage statement with each paycheck showing: hours worked, gross wages, all deductions (federal income tax, FICA, HI state income tax if opted in, HI TDI, PHCA premium share, SUI), net pay, and pay period dates. Keep payroll records for at least 6 years.
Time off & leave
Paid Sick Leave
Hawaii does not have a statewide paid sick leave law for private-sector household employees. Hawaii TDI (above) covers temporary disability, including non-work-related illness/injury and pregnancy-related conditions, with partial wage replacement.
Hawaii Family Leave Law (HFLL)
The Hawaii Family Leave Law (HRS § 398) provides up to 4 weeks of unpaid, job-protected family leave per year for employees who have worked at least 6 consecutive months. HFLL applies to employers with 100 or more employees — meaning typical households are exempt. Federal FMLA also typically does not apply to households (which rarely meet the 50-employee threshold).
Vacation & PTO
Hawaii does not require paid vacation. If you offer it, your written policy should clearly explain accrual, carryover, and payout at separation. If the policy is silent, unused vacation may be treated as payable wages.
Upon departure
Hawaii final pay timing depends on how the relationship ends. For involuntary termination, final wages are generally due at discharge or by the next working day. For voluntary resignation, final wages are generally due on the next regular payday, or at quitting if the employee gave at least one pay period's notice. Pay out unused vacation only if your written policy provides for payout.
Year-end forms
Your responsibilities
- Hand the W-2 to your household employee by January 31 — Nest produces this; you deliver it
- Attach Schedule H to your Form 1040 by April 15 — Nest produces a signature-ready version
- Remember Hawaii's individual income tax filing deadline is generally April 20, not April 15
What Nest handles for you
- Quarterly federal tax payments to the IRS via EFTPS
- W-3 + Copy A of W-2 filed with the Social Security Administration
- Quarterly Form UC-B6 unemployment filings through the Hawaii DLIR portal
- Quarterly Form HW-14 withholding filings when Hawaii withholding applies
- Annual HW-2 / HW-30 reporting when Hawaii withholding applies
Tax breaks for household employers
Three federal tax provisions can offset the cost of household employment:
- Child and Dependent Care Tax Credit (CDCTC) — Up to 35% of $3,000 (one qualifying child) or $6,000 (two or more) in care expenses on Form 2441 with Form 1040.
- Dependent Care FSA (DCFSA) — If your employer offers one, you can set aside up to $5,000 per year (single or married filing jointly) of pre-tax salary to pay for care. The OBBBA increased this to $7,500 starting 2026.
- Hawaii state credit — Hawaii offers a state child and dependent care credit on Form N-11 / N-15 mirroring a portion of the federal CDCTC.
Resources & free tools
The information on this page is general in nature and not tax, legal, or financial advice. Hawaii rules change. Verify current rates and rules with the Hawaii Department of Taxation, Hawaii DLIR, and Hawaii Disability Compensation Division, or consult a tax advisor.