Cost of Living in Hawaii 2023

Average Income

In order to "be happy" in Hawaii in 2023, one study reports that you’ll need a whopping salary of just under $200,000. (Of course, every report is different and the standards of living vary according to each person and their measures of "happiness.") The Living Wage Calculator from the Massachusetts Institute of Technology (MIT) says that one adult in Honolulu needs to make $22.76 per hour for a living wage. If that is a couple (both working) with 2 children, each adult needs to make $30.32 per hour.

According to Payscale, the average salary in the island's capital, Honolulu, is $74,000, but the state has the second-highest income tax rates in the country, with its top bracket at 11 percent. According to the Bureau of Labor Statistics, the median U.S. salary, as of the 2nd quarter in 2023, is $57,200 ($1,100 weekly). In another analysis by Indeed.com in September 2023, the average salary in Hawaii for an office assistant is $38,472 while the average salary for a physician is $210,048. Most of this data is unadjusted and based on job posts and user verification.

But for many people, even with increasing inflation, Honolulu’s appealing qualities balance out the potentially lower wages and high cost of living.

Housing Costs

Renting in Hawaii is much more expensive than most places on the mainland – and it all depends on location. For example, a studio on Oahu can range from $1,000 to more than $1,600 per month and that’s not including utilities, which can be around $150 per month for one person. A one-bedroom apartment or home can range from about $1,500 to more than $2,000 per month and a two-bedroom apartment or a house will start at $1,800 per month. Looking at a luxurious, new one-bedroom condo? Expect to fork out at least $3,000 a month.

You can always opt to live outside of Honolulu’s center or even consider the other Hawaiian Islands – the Big Island’s Hilo is nearly 49 to 56 percent lower than Honolulu, plus offers a laidback and relaxing small-town vibe that may be appealing than the hustle and bustle of the city.

If you’re looking to buy, the median sales price of a single-family home on Oahu is $1,100,055 as of November 2023. The median sales price for a condo on Oahu is $516,179. Despite the high prices, increase of interest rates, and lack of inventory, Oahu continues to see demand in home and condo sales.

Alternatively, buying a piece of land and building your own home could be more affordable, but that depends on location and your general contractor. You can find the average costs associated with building your own home in Hawaii in this blog post.

Utilities

Hawaii’s residents pay the most when it comes to monthly energy bills in the nation. According to Payless Power's report on electricity rates by state, you can expect to pay an average of $393.87 per month for electricity. Electric bills will vary depending on the type of residence you live in, how many people you live with, how often you're at home, and if you use air conditioners (most do).

It's also worth mentioning that with the recent rise of oil prices due to the war between Ukraine and Russia, Hawaiian Electric, Hawaii's primary electricity provider for 5 of the Hawaiian islands, anticipates an additional 20% increase in rates for residents on Oahu and a 20% increase for residents on the Big Island of Hawaii and Maui.

Despite the high cost of energy, the sun shines in Hawaii at a rate of 8% more than other states, creating an opportunity for cost effective solar energy. Between 20% and 40% of homes on Oahu, Maui, and the Big Island of Hawaii have rooftop solar. In fact, Hawaii was the first state to set a deadline for generating 100% of its electricity from renewable sources by 2045.

Transportation

Let’s say you do choose to live outside of the busy Honolulu or downtown area – you’ll then need to consider the cost of owning and driving a vehicle. Gas prices as of February 2023 is about $4.80 per gallon in Honolulu. Taking the bus or, in Oahu, TheBus, may be a more affordable method of transportation, at $80.00 a month for unlimited rides, although it may not be an appealing daily commute of choice.

If you work in downtown Honolulu or Waikiki, you’ll most likely need to rent a parking spot in the case your company doesn’t provide one. Parking ranges typically from $150 to $300 per month. Those who live in a condo may also need to rent a stall, although it depends on association rules.

If you live in Kapolei or on the Ewa side of Oahu, you might be able to take the Honolulu Rail Transit to work. However, there have been many delays with its construction; read more here.

Groceries and Dining Out

Food is delicious in paradise, especially with an abundance of tropical fruits, vegetables and locally grown coffee. But Hawaii is the most expensive place to buy groceries in the nation, especially because products are shipped from the mainland. According to a 2023 survey by Council for Community & Economic Research (C2ER), Hawaii’s cost of groceries ranked last in the United States with a score of 132.7, while comparatively Alaska ranked at 129.9, Washingon D.C. at 105.9, New York at 104.7 and California at 112.8.

For example, a gallon of whole milk on Oahu can be $9 – the cheapest at Costco or Sam's Club for around $5 a gallon. Broccoli is at $3.79 a pound, bulk carrots at $3.49 a pound. And yes, while buying local is encouraged, the cost of Hawaii grown mangos are at about $6.99 a pound. Four rolls of toilet paper will be about $6.

Eating out will add up quickly. The average cost of breakfast in Hawaii is $9 to $15, lunch at about $12 to $18 and dinner will cost $15 to $30 (or more). There’s a huge price range though, so many people will buy a plate lunch (white rice, mac salad, and meat entrée like loco moco or teriyaki beef) and save it for lunch and dinner, or split the entire plate in half with a friend.

Taxes and Insurance

Income tax rates range from 1.4 percent to 11 percent.

Ready for some good news? Honolulu’s residential property tax rate is 0.35 percent, one of the lowest rates in the nation.

For retirees, Hawaii can be fairly appealing as the state exempts Social Security retirement benefits and public pension income from state taxes. It fully taxes income from private pensions and retirement savings accounts.

For employers or entrepreneurs in Hawaii who are looking to pay for their own health insurance, according to a study updated by MoneyGeek.com in February 2023, you can expect to pay an average of $446 per month or $5,353 annually. Those costs are on the lower end of the spectrum compared to the rest of the nation, but it's also important to note that year-after-year, Hawaii's health care system is one of the best in the nation. Hawaii received top scores for access and affordability, prevention and treatment, and other performance indicators. Typically, health insurance in Hawaii is provided through four main companies: Kaiser Foundation Health Plan Inc., Hawaii Medical Service Association (HMSA), UHA Health Insurance, or Hawaii Medical Assurance Association (HMAA).

Education

Hawaii's public school system is the nation's only statewide system governed by one Superintendent and the Hawaii Board of Education. In other words, there's only one public school district for all of Hawaii's islands. Because of this unique governance structure, criticized for its "one size fits all" approach, parents often seek out private schools that fit the individual needs of their children. And that comes at a cost.

Below is a table showing Hawaii's ten largest private schools and their tuition costs:

An example of a budget for a family of 4 living in a Single Family Home:

• Mortgage - $3,200 per month
• Groceries - $1,000 to $1,200 per month
• Electricity - $350 per month
• Transportation - $580 per month
• Dining out - $500 to $800 per month
• Property Taxes - $2,350 per year

The numbers above are based on the following conditions:

• You have 1 Wall AC Unit that you use sparingly.
• You have 2 gas cars.
• Shop at Costco, Sam's Club, Foodland, and/or Safeway.
• You dine out once to twice a week at a reasonably priced restaurant.
• You live relatively close to where you work.

Ways to Save

• Shop at Costco or Sam's Club for bulk discounts. If you or your family is in the military, shop at NEX. Smaller items like condiments or produce can be purchased from Foodland, Safeway, Don Quixote, or Times.
• Costco offers the cheapest gas in Hawaii.
• Electric vehicles (EVs) have become popular in Hawaii. Incentives are provided for EV owners including HOV Lane use. Most modern EV's can travel around the island without having to charge.
• Solar Panels - Hawaiian Electric Company offers several programs to customers to save big on electricity.
• Consider location when choosing the neighborhood you live in. It can make the difference between paying more for A/C.
• Earn points and receive discounts with local programs. For example, consider applying for a The Hawaiian Airlines® World Elite Mastercard and/or signing up for Foodland's Maika‘i Member program.
• Facebook marketplace has great deals when it comes to used furniture, electronics, and household accessories.
• Grow your own fruit, vegetables, and herbs.

So, why the high cost?

The high cost of living in Hawaii has many reasons, but the short answer is the fact that we’re surrounded by water. Nearly everything we consume has to be shipped here or flown. Hawaii is also a desirable place foreign investors to buy property, which continues to drive up housing costs. Another big factor: utility bills such as electricity is sky high, thanks to the warm climate. Like with many things in life, there is certainly a trade-off.

Is it worth it? Here are a few reasons why it is...

• You have family and friends here.
• You have a remote job and can work from anywhere.
• You're retired and like to golf.
• You love beaches and the outdoors.
• You want to raise a family in a small community.
• You have an understanding and respect for Hawaii's culture.
• You want to invest and live in a home that appreciates over time.
• You love the weather. And sushi.
• You get bored easily and need to live somewhere that has a lot to offer.

Cost of Living in Hawaii vs. Other Cities

Compare the cost of living between Honolulu, Hawaii's capital, to other cities across the United States. Download the Table (the data was compiled from Sperling's Best Places or bestplaces.net.)

Takeaways

While the calculations in the download above provide a rough estimate of living in these locations, we can come to a few conclusions:

• The cost of food is high in Hawaii compared to other locations.
• Some places, like California and New York, have higher expenses in the area of transportation. Parking fees are exorbitant in New York if you own a car, but this could be eliminated by using their great public transportation system.
• In Honolulu, you do not have to pay extra for garbage or recycling services, unlike most places.
• It is more expensive to live in some locations, like Seattle, Manhattan, San Francisco, and San Diego than in Honolulu; however, all of these locations also have a higher average income.

While the cost of living in Hawaii may be daunting at first, it requires a bit of soul searching and close look at your lifestyle. If you’re used to a certain standard of living, you may need to make a few sacrifices when moving to Hawaii. But, it may not seem like a sacrifice to nix that luxury car or to eat out less, especially if living near the ocean, enjoying a warm climate and healthy island environment are important to you. It’s all about balancing your values and discovering what works for you and your family.