CLIENT LOGIN | Member Services OR EMPLOYEE LOGIN | Self Service

Hawaii Fact Sheet Household Tax Compliance Tips



Payroll tax compliance for your new employee does not need to be terrifying, time consuming or expensive. HomeWork Solutions is a nationally recognized “household payroll” service company, providing household employers nationwide with trusted and time saving payroll and payroll tax solutions.




You become a household employer when you hire an individual to perform duties and provide services under your direction in your private home. Generally, these workers are your employees, not independent contractors. Failure to properly classify the worker and make the appropriate employment tax filings and payments is considered tax fraud by the IRS.



You are responsible for federal employment taxes when you pay household workers as little as $1,000 in a calendar quarter or when you pay any individual employee age 18 or over $2,700 in a calendar year.

You have both Federal and State tax filing responsibilities. Federal employment taxes are reconciled with the household employer’s annual Federal Income tax return. Your state may require quarterly unemployment tax filings, as well as reports and remittance of state income taxes withheld, if applicable. Employee wages are reported to the Social Security Administration. Your employee is due a W-2 form in January.

Social Security and Medicare Taxes

The household employer is responsible for the payment of all Social Security and Medicare taxes to the IRS. You may choose to either collect your employee’s taxes via payroll deductions or fund these taxes yourself.

Unemployment Taxes

You will make contributions to the IRS and Hawaii to fund unemployment and worker re-training programs.

Income Taxes

Federal and state income taxes are ultimately the responsibility of the household employee; however, best practice is to deduct these taxes from your full time employee’s wages to help them avoid owing large sums when they file their annual income tax returns.


Verification of Work Eligibility

All U.S. employers are required to verify a candidate’s employment eligibility using Form I-9.

Fair Labor Standards Act (FLSA) Compliance

Maintain accurate and contemporaneous records including time tracking, gross pay calculations, and detailed records of all deductions from the employee paycheck.

Pay no less than minimum wage on an hourly rate basis.

Health Insurance

Household employers in Hawaii are usually required to provide health insurance to their employees. Families who employ someone to work 20 or more hours per week, for 4 continuous weeks or more are required to set up employer provided health insurance for their employee and pay at least 50% of the premium cost.  The employee’s contribution must not exceed 50% of the premium cost, and may not exceed more than 1.5% of the employee’s gross income.  Coverage can be waived by the employee, but only if they already have health insurance by other means. Additional resources can be found on the state of Hawaii Department of Labor and Industrial Relations website.


Minimum Wage

Household employees in Hawaii are covered by both the FLSA and Hawaii Domestic Workers Bill of Rights and are non-exempt, hourly employees, paid at no less than the minimum wage.

Minimum wage in Hawaii is $14.00/hr.

Overtime Pay

All household workers are entitled to overtime calculated at 1.5 times the hourly rate for hours worked over 40 in a 7 day week. Overtime or premium pay is not required for hours worked in excess of 8 per day or on weekends or holidays.

Paid Time Off

In Hawaii, paid vacation and sick leave is not required by law. Voting leave is required for up to two hours, if the employee does not have two hours from when the polls open to the start of work or from the end of work to when the polls close.

Mileage Reimbursement

The federal government establishes and updates a maximum rate for non-taxable mileage reimbursement each year.  The current rate is $0.67 per mile.

Payroll Frequency

Hawaii allows you to pay your household worker daily, weekly, bi-weekly, or semi-monthly, but does not permit monthly pay cycles. Pay upon separation is due immediately.

Payroll Documentation

You are required to provide your Hawaii household employee a pay rate notice at time of hire that specifies both the hourly and overtime rates of pay.

You are also required to provide your employee a pay stub every pay period that includes hours worked, hourly pay rate, overtime hours, straight-time compensation, overtime compensation, other compensation, gross and net compensation, itemization of all payroll tax deductions, and the date and pay period covered.

Employment Contract Requirements

Hawaii does not require a written employment agreement. However, a free sample work agreement can be found here.

Workers’ Compensation Insurance

Hawaii requires household employers to obtain Workers’ Compensation Insurance if their payroll is $225 a quarter or more. HWS ALWAYS recommends obtaining a Workers Compensation Insurance policy for the protection it provides in the event of a work-related injury sustained by your employee. A policy can usually be obtained easily and cost effectively by contacting your Homeowner’s or Renter’s Insurance provider. HWS can help you obtain this insurance through our insurance partner (just give us a call).

State Unemployment Insurance

Hawaii requires a new employer state unemployment insurance tax of 3.0% for the first $59,100 wages paid to each employee. This may vary if you have previous employees.

Frequency of Tax Filings

Hawaii requires quarterly tax filing for unemployment insurance and quarterly and annual tax filing for income withholding tax. HWS recommends filing quarterly.

Domestic Workers Bill of Rights

Hawaii has a Domestic Workers Bill of Rights which includes requirements for minimum wage and overtime pay.


HWS knows that most families want to pay their household employees legally and ensure that the employee receives workers compensation and unemployment insurance protections. You also want to establish a principled relationship with your employee who is caring for and interacting with precious family members. Getting the relationship started on the right footing, including complying with legal and tax formalities, helps set the tone for the relationship.