Honolulu General Excise Tax Pass-On Rate: A Checkout Guide for Merchants
Learn the Honolulu general excise tax pass-on rate, why 4.712% is the ceiling, and how to set up GET correctly on your POS systems and receipts.
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Key takeaways
- Businesses on Oahu owe 4.5% general excise tax (4% state plus a 0.5% Honolulu county surcharge) on most gross receipts.
- Passing the tax on to customers is optional, but if you show it separately, the most you can charge is 4.712%.
- GET is owed on gross receipts whether or not you pass it on, and your card processing fees don't reduce that base.
- Set your chosen rate in your POS, label it clearly as GET on receipts and run a test transaction before going live.
If you run a shop, restaurant or salon in Honolulu, the tax line on your receipts doesn't work like sales tax on the mainland. This guide explains the Honolulu general excise tax pass-on rate. It covers what Oahu businesses owe, why the most you can visibly charge customers is 4.712% rather than 4.5%, and how to set up that rate correctly on your POS systems and receipts.
Hawaii has no traditional sales tax. Instead, businesses pay a general excise tax (GET) on their gross receipts. How you show that tax at checkout and how you configure your POS both affect your margins and your compliance.
This article is general information, not tax or legal advice. Confirm current rates and how they apply to your business with the Hawaii Department of Taxation or a qualified tax professional.
The GET Rate on Oahu: 4.5%
Hawaii's GET rate for most retail sales and services is 4%. The City and County of Honolulu adds a 0.5% county surcharge. According to the state Department of Taxation, the surcharge has been in place since 2007 and currently runs through December 31, 2030.
On Oahu, that makes the combined rate 4.5% for transactions taxed at the 4% rate.
Many new owners miss one point: GET is a tax on the business, not technically on the customer. You owe it on your gross receipts whether or not you pass it on. Adding GET to the receipt is a pricing choice. It doesn't change who is responsible for paying the tax.
Why the Honolulu General Excise Tax Pass-On Rate Is 4.712%, Not 4.5%
Many Honolulu businesses pass GET on to customers as a separate line on the receipt. The tax, however, is calculated on your total gross receipts, and that total includes the tax you collected.
The Department of Taxation explains the math. If you add 4.5% on top of a price, the amount you collect is itself taxable, so you come up short. The rate that exactly covers the tax is:
4.5% ÷ 95.5% = 4.712%
| What you add at checkout | What it means |
|---|---|
| Nothing | You absorb the full 4.5% out of your prices |
| 4.5% | You cover most of the tax, but not the tax on the tax |
| Up to 4.712% | You fully cover GET on Oahu |
| More than 4.712% | Not allowed: you can't visibly pass on more than the tax actually due |
Consumer protection rules don't let you visibly charge more than the actual GET owed, so 4.712% is the ceiling on Oahu.
An Illustrative Example: A $100 Sale
The numbers below are illustrative and rounded to the cent. They apply the 4.5% Oahu rate to a single sale.
| Add 4.5% | Add 4.712% | |
|---|---|---|
| Item price | $100.00 | $100.00 |
| GET added to receipt | $4.50 | $4.71 |
| Total gross receipts | $104.50 | $104.71 |
| GET owed (4.5% of gross receipts) | $4.70 | $4.71 |
| Shortfall you absorb | About $0.20 | None |
Twenty cents looks minor on one sale. Across every transaction in a year, though, the gap between 4.5% and 4.712% comes straight out of your margin.
Should You Pass on GET or Absorb It?
There's no single right answer. Passing on GET is optional, and businesses decide differently depending on how they price and what customers expect. Common approaches:
- Absorb it into your prices. Customers pay the shelf and menu prices, and the tax comes out of your revenue. Checkout stays simple, but your listed prices need to account for the 4.5%.
- Pass on the full 4.712%. The tax shows as a separate line, and GET doesn't eat into your prices.
- Pass on 4.5%. Some businesses prefer the more familiar-looking number. As the example above shows, you still absorb the tax on the tax.
Whichever approach you choose, apply it consistently and label it accurately. If you're unsure which fits your business, talk it through with your tax advisor before you change your receipts.
Setting up GET on Your POS Systems and Receipts
Once you've picked a rate, configure it carefully so every transaction calculates the same way.
- Set the tax rate in your POS or terminal to the rate you've chosen (for example, 4.712%).
- Label it clearly as GET on receipts so customers understand the line item.
- Check your item settings. Some receipts may be taxed at different rates. If you sell a mix of goods and services, confirm your setup with a tax professional.
- Keep tips separate from taxable sales in your reporting, and ask your tax advisor how tips should be treated for your business.
- Run a test transaction and review the printed or emailed receipt before you go live.
Most smart terminals and modern POS systems let you set custom tax rates and receipt labels. If you run several registers or devices, check whether a tax change applies to all of them or has to be made on each one, then test every device. If you're still choosing a system, our buyer's checklist for the best POS system for small business can help.
A Quick Pre-Launch Checklist
- Tax rate matches the rate you chose
- Receipt label reads as GET, not "sales tax"
- Items taxed at other rates are mapped correctly
- Tips report separately from taxable sales
- Every register or device shows the same rate
- Test receipt reviewed and saved for your records
GET, Taxes and Card Processing Costs
Because GET is charged on gross receipts, your card processing fees don't reduce the amount you owe. The tax is calculated on what you take in, not on what lands in your bank account after fees.
To protect margin, look to the processing side: your pricing model and cost programs such as dual pricing. To compare your options, see our guide to interchange-plus vs. flat-rate vs. tiered pricing and our breakdown of cash discount vs. dual pricing vs. surcharging.
Keep GET and any card-cost program clearly separate on your receipts. They're different charges with different rules. Combining them on one line makes both harder for customers to understand and harder for you to report. For a look at how surcharge rules can vary by state, see our guide to Florida credit card surcharge law.
Businesses With Locations on Neighbor Islands
Each of Hawaii's counties (Kauai, Hawaii, Maui and Honolulu) currently levies its own GET surcharge. If you have locations on more than one island, confirm the current rate and pass-on rate for each county with the Department of Taxation, and configure each location's POS separately.
Don't assume the Oahu pass-on rate applies everywhere. A multi-island business can end up with different rates on different devices, so the pre-launch checklist above is worth running at every location.
Next Steps for Honolulu Merchants
Getting GET right comes down to three things:
- Knowing the 4.5% rate you owe on Oahu
- Deciding whether to absorb it or pass on up to 4.712%
- Setting that rate consistently on your equipment and receipts
Review your setup with a tax professional, then run a test sale before any change goes live.
Looking at new POS systems or terminals? MannyPay works with restaurants and bars, retailers and service businesses. Request a free quote, and a MannyPay specialist will respond within one business day.
Sources
This article is for general educational purposes and is not legal, tax or financial advice. Card network rules and state laws change; confirm current requirements for your business.
