Self-Employment Tax in Hawaii (2026)

Q: What is the self-employment tax rate in Hawaii?

The self-employment tax rate is 15.3% of net earnings from self-employment: 12.4% for Social Security up to the annual wage base plus 2.9% for Medicare with no cap. It is a federal tax, so the rate is the same in Hawaii as in every other state.

Q: Does Hawaii have its own self-employment tax?

No. Self-employment tax is entirely federal, paid to the IRS on Schedule SE. Hawaii instead taxes your net business income through its progressive state income tax and taxes your gross business income through the General Excise Tax, which are separate obligations.

Q: How do I pay self-employment tax if I live in Hawaii?

You figure it on Schedule SE with your Form 1040 and pay it through quarterly estimated payments using Form 1040-ES, because no employer withholds it. You should also make Hawaii estimated income tax payments to the Department of Taxation.

Q: Is the General Excise Tax the same as self-employment tax?

No. The General Excise Tax (GET) is a Hawaii tax on the gross income of your business, generally 4% (4.5% on Oahu with the county surcharge). Self-employment tax is a federal Social Security and Medicare tax on your net earnings. They are calculated separately.

Q: Can I deduct half of my self-employment tax?

Yes. You deduct the employer-equivalent half of your self-employment tax as an adjustment to income on your federal return, which lowers your income tax but not the self-employment tax itself. This deduction is provided under Internal Revenue Code section 164(f).

Q: Do I owe self-employment tax on a Hawaii LLC?

If your single-member LLC is a disregarded entity or your multi-member LLC is a partnership, active members generally owe self-employment tax on their share of net earnings. Electing S corporation status can change how earnings are split between wages and distributions.

Fact-checked by the LegalGlass editorial team against primary sources · Published Aug 6, 2026 · Last updated Aug 6, 2026

Self-employment tax in Hawaii is 15.3% of your net earnings - 12.4% for Social Security up to the annual wage base plus 2.9% for Medicare with no cap. It is a federal tax figured on Schedule SE and paid quarterly with Form 1040-ES. Hawaii adds its own progressive income tax and a General Excise Tax on your gross business income.

Quick Answer

SE tax rate: 15.3% of net earnings from self-employment
Breakdown: 12.4% Social Security (up to wage base) + 2.9% Medicare (no cap)
High earners: Extra 0.9% Additional Medicare Tax above IRS thresholds
Federal form: Schedule SE with Form 1040; pay via Form 1040-ES
Hawaii income tax: Progressive state income tax on net earnings (Dept. of Taxation)
Hawaii GET: General Excise Tax on gross income, generally 4% (4.5% on Oahu)

What Self-Employment Tax Is

Self-employment (SE) tax is the Social Security and Medicare tax paid by people who work for themselves. When you are an employee, you and your employer each pay half of these taxes through payroll. When you are self-employed, you pay both halves yourself - that combined amount is the SE tax. The rate is 15.3% of your net earnings from self-employment, set by Internal Revenue Code section 1401. It is a purely federal tax collected by the IRS, so it is identical whether you operate in Honolulu, Hilo, or anywhere on the mainland.

SE tax is separate from income tax. It funds your future Social Security and Medicare benefits and is calculated on the profit of your business, not on your gross receipts. If you run a sole proprietorship, a single-member LLC, or are an active partner in a partnership, you generally owe it. For the national explanation, see our self-employment tax guide and the SE tax calculator; this page focuses on how it interacts with Hawaii's state taxes.

Who Owes SE Tax in Hawaii

You generally must pay SE tax and file Schedule SE if your net earnings from self-employment were $400 or more for the year (a lower threshold applies to church employees). This covers freelancers, gig workers, independent contractors, sole proprietors, single-member LLC owners taxed as disregarded entities, and general partners. It does not apply to wages you earn as an employee, where Social Security and Medicare are already withheld.

The business structure matters. A disregarded single-member LLC and a partnership pass earnings through to owners who pay SE tax on their active share. A corporation - including an LLC that has made an S corporation election - pays owners a wage subject to payroll tax, and remaining profit distributed to shareholders is generally not subject to SE tax. That distinction is a common reason higher-earning Hawaii owners consider an S election, though it requires paying a reasonable salary and running payroll. See business tax for the trade-offs.

How the 15.3% Breaks Down

The 15.3% has two parts. The Social Security portion is 12.4% and applies only up to an annual wage base limit (a cap the Social Security Administration adjusts each year); earnings above that cap are not subject to the Social Security portion. The Medicare portion is 2.9% and has no cap, so it applies to all net earnings. Higher earners also pay an Additional Medicare Tax of 0.9% on wages and self-employment income above IRS thresholds ($200,000 single, $250,000 married filing jointly).

Two adjustments make the effective burden a bit lower than a flat 15.3% of profit. First, you multiply your net profit by 92.35% before applying the rate, which approximates the employer-side deduction employees receive. Second, you deduct one-half of your SE tax as an adjustment to income under Internal Revenue Code section 164(f), lowering your income tax (not the SE tax itself). Both are built into Schedule SE.

A simple illustration shows the mechanics. Suppose a Honolulu freelancer nets $50,000 of profit. Schedule SE first multiplies that by 92.35% to reach about $46,175 of taxable self-employment earnings. Applying the 15.3% rate produces roughly $7,065 of SE tax, and the freelancer then deducts about half of that - near $3,533 - as an adjustment to income on the federal return. Because the profit is below the Social Security wage base, the full 12.4% applies; a much higher earner would stop paying the Social Security portion once earnings cross the cap while still paying the 2.9% Medicare portion on everything. This SE tax sits on top of, and is computed independently from, both federal income tax and Hawaii income tax.

Schedule SE, Estimated Payments, and Deadlines

You report SE tax on Schedule SE, filed with your Form 1040. Your net business profit typically comes from Schedule C (sole proprietors and single-member LLCs) or Schedule K-1 (partners). Because no employer withholds tax from self-employment income, you usually must pay as you go through quarterly estimated taxes using Form 1040-ES. These payments cover both income tax and SE tax, and the IRS can charge an underpayment penalty if you pay too little during the year.

Federal estimated payments are generally due in four installments - in April, June, September, and January of the following year. In parallel, you make Hawaii estimated income tax payments to the Department of Taxation on its own schedule. Set aside cash from each payment you receive so the quarterly bills do not surprise you; many self-employed people reserve roughly a quarter to a third of profit for combined federal SE tax, federal income tax, and Hawaii taxes.

Hawaii State Income Tax on the Same Income

SE tax is only the federal Social Security and Medicare piece. Your business profit is also subject to Hawaii's individual income tax, which is progressive - rates rise across multiple brackets administered by the Hawaii Department of Taxation under Chapter 235 of the Hawaii Revised Statutes. Because a disregarded LLC or a sole proprietorship passes profit onto your personal return, that profit is taxed at Hawaii's individual rates on your state return, on top of federal income tax and SE tax.

This is why the full tax picture for a Hawaii self-employed person has three federal-and-state layers on the same dollar of profit: federal income tax, federal SE tax, and Hawaii income tax. Planning for all three - not just the SE tax - is essential to avoid a large balance due. If you are choosing a structure, review how to form an LLC in Hawaii and Hawaii registered agent requirements as part of the same planning.

Hawaii General Excise Tax (GET): The Extra Layer

Hawaii does not have a conventional sales tax. Instead it imposes the General Excise Tax (GET) on the gross income of virtually every business activity in the state, under Chapter 237 of the Hawaii Revised Statutes. The general GET rate is 4%, and on Oahu a county surcharge brings the effective rate to 4.5%. Unlike a sales tax, GET is legally a tax on the business, though businesses commonly pass it on to customers. It applies to gross receipts, so it is owed even in a year with little or no net profit.

The key point for the self-employed: GET is completely separate from SE tax and from income tax. SE tax is federal and based on net earnings; GET is a Hawaii tax based on gross income. Most self-employed people in Hawaii must register for a GET license with the Department of Taxation, file periodic GET returns, and pay GET in addition to their federal SE tax and Hawaii income tax. Factor the GET into your pricing, and confirm your county surcharge and filing frequency with the Department of Taxation. For related steps, see business licenses and how to get an EIN.

Practically, a new self-employed Hawaii resident should budget for GET from day one. You obtain a GET license, receive a Hawaii Tax Identification Number, and then file GET returns on a monthly, quarterly, or semiannual basis depending on your expected liability, plus an annual reconciliation return. Because GET is levied on gross receipts rather than profit, a low-margin business can owe meaningful GET even when SE tax and income tax are modest - another reason to track all three taxes separately. Keeping clean books that split gross receipts, business expenses, and net profit makes every one of these filings easier, and it feeds directly into the Schedule SE and estimated-payment math discussed above.

Frequently Asked Questions

What is the self-employment tax rate in Hawaii?

15.3% of net earnings from self-employment: 12.4% for Social Security up to the annual wage base plus 2.9% for Medicare with no cap. It is a federal tax, so the rate is the same in Hawaii as everywhere else.

Does Hawaii have its own self-employment tax?

No. SE tax is entirely federal, paid to the IRS on Schedule SE. Hawaii instead taxes net business income through its progressive income tax and gross business income through the General Excise Tax - both separate from SE tax.

How do I pay self-employment tax if I live in Hawaii?

Figure it on Schedule SE with Form 1040 and pay through quarterly estimated payments using Form 1040-ES, since no employer withholds it. Also make Hawaii estimated income tax payments to the Department of Taxation.

Is the General Excise Tax the same as self-employment tax?

No. GET is a Hawaii tax on your business's gross income, generally 4% (4.5% on Oahu). SE tax is a federal Social Security and Medicare tax on your net earnings. They are calculated and paid separately.

Can I deduct half of my self-employment tax?

Yes. You deduct the employer-equivalent half of your SE tax as an adjustment to income, which lowers your income tax but not the SE tax itself. This deduction comes from Internal Revenue Code section 164(f).

Do I owe self-employment tax on a Hawaii LLC?

If your single-member LLC is disregarded or your multi-member LLC is a partnership, active members generally owe SE tax on their share of net earnings. Electing S corporation status can change how earnings split between wages and distributions.

More Hawaii and tax guides

Form An Llc In Hawaii Hawaii Registered Agent Business Tax Self-Employment Tax S-Corp vs LLC Get An EIN Business Licenses DBA Dissolve An LLC Glossary

Sources

IRS - Self-Employment Tax (15.3% rate, components).
IRS - About Schedule SE (Form 1040) (figuring SE tax; 92.35% factor).
IRS - Estimated Taxes (quarterly payments; $400 threshold).
IRS - About Form 1040-ES (estimated tax vouchers).
IRS - Tax Topic 554, Self-Employment Tax.
IRS - Additional Medicare Tax (0.9% thresholds).
IRS - About Schedule C (Form 1040) (business profit or loss).
Social Security Administration - Contribution and Benefit Base (annual Social Security wage base).
Legal Information Institute - 26 U.S. Code 1401 (self-employment tax rate).
Legal Information Institute - 26 U.S. Code 1402 (net earnings from self-employment).
Legal Information Institute - 26 U.S. Code 164 (deduction for one-half of SE tax, subsection (f)).
Hawaii Department of Taxation - General Excise Tax (GET) (4% rate; tax on gross income).
Hawaii Department of Taxation - County Surcharge on GET (Oahu 0.5% surcharge).
Hawaii State Legislature - Hawaii Revised Statutes Chapter 237 (General Excise Tax).
Justia - Hawaii Revised Statutes Chapter 235 (Income Tax Law).

LegalGlass provides general information for educational purposes and is not a law firm or a substitute for advice from a licensed attorney or tax professional. Laws, rates, and thresholds change; verify current requirements with the IRS and the Hawaii Department of Taxation before acting.