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Indiana Payroll Tax and Labor Laws

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Did you know that Indiana residents, including full-time, part-time, temporary or seasonal workers, are subject to withholding on all income earned, no matter where the service was performed?

Indiana Wage and Hour Laws

Employees covered by Indiana's minimum wage law must be paid $7.25*** an hour.

All employees are covered except for:

  • employees working on commission;
  • individuals under 16 years of age;
  • independent contractors;
  • student nurses, hospital interns, and residents;
  • students working for their schools;
  • certain agricultural workers;
  • individuals not employed for more than four weeks in any four consecutive three-month periods; and
  • individuals subject to the Motor Carrier Act.

Indiana Payroll for Employers

Employers covered by Indiana's wage payment law must pay wages at least semimonthly or biweekly if requested. Payments must be made not more than 10 days following the close of a pay period.

Indiana Unemployment:

Taxable Wage Base ($000s):                        9,500

New Employer Rate (% Taxable Wages)    2.5

Employee Tax Rate (% Taxable Wages)     None

Indiana Income Tax Withholding

Indiana requires employers to withhold income tax from employees' compensation and remit withheld amounts to the Department of Revenue.

Employers are required to withhold from wages regardless of the number of employees or the place wage payments are made.

Reciprocal agreements with Kentucky, Michigan, Ohio, Pennsylvania and Wisconsin provide that Indiana employers need not withhold Indiana tax from wages paid to employees who reside in these states, but employers are urged to withhold the appropriate tax applicable to the employees' state of legal residence.

Indiana Benefits

Indiana Voting Rights:

Employer Right to Schedule Voting Hours         No

Pay Deduction for Voting Time Leave                 No

Indiana does not have a voting time leave law.

Indiana State Tax Resources

SurePayroll, Inc. and its subsidiaries assume no liability and make no warranties on or for the information contained on these state payroll pages. The information presented is intended for reference only and is neither tax nor legal advice. Consult a professional tax, legal or other advisor to verify this information and determine if and/or how it may apply to your particular situation.

This website contains articles posted for informational and educational value. SurePayroll is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, SurePayroll. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. If you require legal or accounting advice or need other professional assistance, you should always consult your licensed attorney, accountant or other tax professional to discuss your particular facts, circumstances and business needs.
***Special rules apply to minimum wage standards for this state. Please refer to state laws.
Accurate as of December 2020