StructureCost2026

LLC vs S corp in Hawaii: which costs less (2026)

At $100,000 profit in Hawaii, a single-member LLC costs $31,380 a year in tax and fees and an LLC taxed as an S corp costs $27,712. An LLC taxed as an S corp starts to cost less from about $55,000 of profit.

More settings revenue, salary, filing status, payroll costs, PTET

$3,668 a year

saved by switching from a single-member LLC to an LLC taxed as an S corp in Hawaii, at these numbers.

Switching from a single-member LLC to an LLC taxed as an S corp starts to pay at about $55,000 of profit, with the same settings. As an LLC taxed as an S corp this uses the state's pass-through entity tax election, which lowers the cost here.

Hawaii, 2026: $100,000 profit, single filer

ItemLLCLLC as S corpChange
Annual Reportcca.hawaii.gov, checked Oct 20, 2026$15$15$0
Hawaii general excise tax (GET)tax.hawaii.gov, checked Oct 20, 2026$6,000$6,000$0
Self-employment taxirs.gov, 2026 rates$13,280$0−$13,280
Federal income taxirs.gov, 2026 rates$7,251$7,677+$426
State income tax, after the PTET creditfiles.hawaii.gov, checked Oct 20, 2026$4,834$563−$4,271
Payroll tax on your salaryirs.gov, 2026 rates$0$7,126+$7,126
State disability and paid leavelabor.hawaii.gov, checked Oct 20, 2026$0$200+$200
Payroll service and tax return (estimate)$0$1,800+$1,800
Hawaii pass-through entity tax, paid by the company (elected)files.hawaii.gov, checked Oct 20, 2026$0$4,331+$4,331
Yearly cost$31,380$27,712−$3,668
What these figures count
  • State income tax, and state taxes on the business itself: franchise, LLC, S corp, gross receipts and excise taxes.
  • Social Security and Medicare on both sides of an owner salary, federal unemployment tax and the state's new-employer rate.
  • The 20% qualified business income deduction with its income limits and the professional-service rule.
  • Yearly report fees, and a cost you can change for payroll and the business tax return.

Many S corp calculators leave out state taxes and the QBI deduction, which can make the election look better than it is.

Yearly cost at each profit level

ProfitLLCLLC as S corpDifference
$30,000$7,039$9,119+$2,080
$50,000$13,627$14,269+$642
$75,000$22,144$19,558−$2,586
$100,000$31,380$27,712−$3,668
$150,000$52,029$46,175−$5,854
$200,000$73,221$65,072−$8,149
$300,000$117,317$104,311−$13,006

Federal and Hawaii tax and fees, single filer, revenue 1.5 times profit, default salary for S and C corps. "Difference" is LLC taxed as an S corp minus Single-member LLC.

What the switch takes in Hawaii

  1. Check the business can elect: no more than 100 shareholders, all of them US citizens or residents (no nonresident alien owners), and one class of stock. IRS
  2. File IRS Form 2553 to elect S corp tax treatment, within 2 months and 15 days of the start of the tax year it should apply to. See how the S corp election works.
  3. Register with Hawaii as an employer and run payroll for your own salary: federal Forms 941 each quarter, Form 940 and a W-2 each year. New employers pay Hawaii unemployment tax at 2.4% on the first $64,500 of wages. labor.hawaii.gov See what payroll costs.
  4. Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
  5. State upkeep each year: Annual Report, $15 a year, due End of the calendar quarter in which the company was registered.

What changes between the two

A plain LLC pays self-employment tax of 15.3% on 92.35% of all profit, up to the Social Security wage base of $184,500. Taxed as an S corp, the business pays you a salary, and only the salary carries Social Security and Medicare tax. The rest comes out as a distribution.

The election adds costs: a payroll service, a separate business tax return (Form 1120-S), federal and Hawaii unemployment tax on the salary. The calculator counts $1,800 a year for payroll and the return. The IRS expects a reasonable salary for the work, so it cannot be set near zero.

Questions

At what profit does an S corp election pay in Hawaii?

About $55,000 a year, on the default salary (40% of profit, at least $30,000 where profit allows) and $1,800 of yearly payroll and return costs. Change the salary in the calculator to see how the point moves.

How much does it save at $100,000 in Hawaii?

$3,668 a year: Single-member LLC $31,380, LLC taxed as an S corp $27,712.

Does Hawaii recognise the S corp election?

Yes. No separate state form is needed.

More for Hawaii

Common cases in Hawaii

Other states