StructureCost2026

LLC or S corp for a physical therapist in Hawaii (2026)

A physical therapist in Hawaii with $110,000 of profit pays $37,973 a year in tax and fees as a sole proprietor and $41,397 as an LLC taxed as an S corp, with a $77,000 salary. On these figures the S corp does not pay at any profit up to $500,000.

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

+$3,424 a year

more for an LLC taxed as an S corp than a sole proprietorship in Hawaii, at these numbers.

With these settings the switch does not pay at any profit from $10,000 to $500,000. Setting up costs $50 once in state filing fees. 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: $110,000 profit, single filer

ItemSole propLLC as S corpChange
Hawaii general excise tax (GET)tax.hawaii.gov, checked Oct 20, 2026$10,560$10,560$0
Self-employment taxirs.gov, 2026 rates$14,050$0−$14,050
Federal income taxirs.gov, 2026 rates$8,143$10,214+$2,071
State income tax, after the PTET creditfiles.hawaii.gov, checked Oct 20, 2026$5,220$3,864−$1,356
Annual Reportcca.hawaii.gov, checked Oct 20, 2026$0$15+$15
Payroll tax on your salaryirs.gov, 2026 rates$0$13,377+$13,377
State disability and paid leavelabor.hawaii.gov, checked Oct 20, 2026$0$385+$385
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$1,182+$1,182
Yearly cost$37,973$41,397+$3,424
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.

At three profit levels

ProfitSalary usedSole propLLCLLC as S corpC corp
$80,000$56,000$25,861$25,871$28,170$29,535
$110,000$77,000$37,973$37,983$41,397$43,870
$160,000$103,000$59,747$59,756$62,007$67,531

Salary is the BLS median for the job ($102,760), capped at 70% of profit. Revenue 2.4 times profit. Single filer.

What matters for physical therapists

What the switch takes in Hawaii

  1. File the Articles of Organization (Form LLC-1) with the state: $50 (fee).
  2. Get an EIN from the IRS (free, online) and open a business bank account in the new name.
  3. 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
  4. 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.
  5. 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.
  6. Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
  7. State upkeep each year: Annual Report, $15 a year, due End of the calendar quarter in which the company was registered.

Questions

Should a physical therapist in Hawaii form an S corp?

At $110,000 of profit, not on these figures: the S corp costs $3,424 a year more than staying a sole proprietor.

Is an LLC worth it for a physical therapist in Hawaii?

For tax, a single-member LLC changes nothing: $37,983 a year against $37,973, the difference being Hawaii's LLC fees. It separates business liability and is the base for an S corp election.

More

Other professions in Hawaii
Other states