PAYROLL TAX RATES
Indiana payroll tax rates
Unemployment tax, income tax withholding, minimum wage and paid leave in Indiana, each with its effective date and the agency page it comes from.
Unemployment insurance
| Item | Value | Effective | Source |
|---|---|---|---|
| Agency | Indiana Department of Workforce Development (DWD) (opens in a new tab) | Indiana DWD, Unemployment Insurance: Employers (opens in a new tab) | |
| Taxable wage base | $9,500 | Indiana DWD, Unemployment Insurance Employer Guide (PDF) (opens in a new tab) | |
| Wage base set each year | No | Indiana Code 22-4-4-2 (2026) (opens in a new tab) | |
| New employer rate | 2.5%2.5% until experience-rated (36 months of coverage and payroll in each of the three 12-month periods ending June 30); government 1.6%Surcharges included | Indiana DWD, New Employer Premium Rate (opens in a new tab) | |
| Employee contribution | None | Indiana DWD, Unemployment Insurance Employer Guide (PDF) (opens in a new tab) | |
| When an employer becomes liable | An employer once it pays $1 or more in wages in any calendar quarter, or owes wages to one or more individuals; farm ($20,000 a quarter or 10 workers in 20 weeks), domestic ($1,000 a quarter) and nonprofit (4 workers in 20 weeks) tests differ. | Indiana DWD, Unemployment Insurance Employer Guide (PDF) (opens in a new tab) | |
| Experience rate after | 36 months | Indiana DWD, New Employer Premium Rate (opens in a new tab) | |
| FUTA credit reduction | Not yet set | US DOL OUI, FUTA Credit Reductions (opens in a new tab) |
Checked on October 5, 2026.
Income tax withholding
| Item | Value | Effective | Source |
|---|---|---|---|
| Agency | Indiana Department of Revenue (DOR) (opens in a new tab) | Indiana DOR, Withholding Income Tax (opens in a new tab) | |
| Withholding rates | 2.95% flat2.9% flat from January 1, 2027 | Indiana DOR, Departmental Notice #1, effective Oct. 1, 2026 (PDF) (opens in a new tab) | |
| Supplemental wages | Same as regular wages | Indiana DOR, Departmental Notice #1, effective Oct. 1, 2026 (PDF) (opens in a new tab) | |
| Reciprocity | Kentucky: WH-47Michigan: WH-47Ohio: WH-47Pennsylvania: WH-47Wisconsin: WH-47 | Indiana DOR, Income Tax Information Bulletin #28 (December 2024, PDF) (opens in a new tab) | |
| Employee's withholding form | Form WH-4 | Indiana DOR, Withholding Tax Forms (opens in a new tab) | |
| Local income taxes | Yes | Indiana DOR, Departmental Notice #1, effective Oct. 1, 2026 (PDF) (opens in a new tab) |
Checked on October 5, 2026.
Minimum wage
| Item | Value | Effective | Source |
|---|---|---|---|
| Minimum wage | $7.25 | Indiana Department of Labor, Indiana Minimum Wage Law poster (PDF) (opens in a new tab) | |
| Tipped employees, cash wage | $2.13 | Indiana Department of Labor, Indiana Minimum Wage Law poster (PDF) (opens in a new tab) | |
| Rises with inflation | No | Indiana Code 22-2-2-4 (2026) (opens in a new tab) | |
| Local rates | Local minimum wages are prohibited (IC 22-2-2-10.5); no city or county rates. | Indiana Code 22-2-2-10.5 (2026) (opens in a new tab) |
Checked on October 5, 2026.
Paid family and medical leave
| Item | Value | Effective | Source |
|---|---|---|---|
| State program | None | Indiana Code Title 22 (2026) (opens in a new tab) |
Checked on October 5, 2026.
Workers' compensation
| Item | Value | Effective | Source |
|---|---|---|---|
| Required | From the first employee | Indiana Worker's Compensation Board, Compliance (opens in a new tab) | |
| State fund | None; private insurers | Indiana Worker's Compensation Board, Compliance (opens in a new tab) |
Checked on October 5, 2026.
What a paycheck costs the employer in Indiana
Employer taxes and contributions on one employee's pay in Indiana, per check and for the year, at the rates a new employer pays. State rates are the ones on this page; federal rates are the ones on the federal payroll tax rates page.
Pay$
Pay frequency
- Employer taxes and contributions per check
- $248.08
- First check of the year
- Cost per check
- $2,555.77
- Pay included, first check
- Cost per year
- $64,869.50
- Pay included
Later checks cost less once pay passes a wage base: the year's last check costs $2,484.23, pay included.
| Item | Rate | First check | Per year | Source |
|---|---|---|---|---|
| Social Security, employer share | 6.2% on the first $184,500 | $143.08 | $3,720.00 | IRS, Publication 15 (2026), Employer's Tax Guide (opens in a new tab) |
| Medicare, employer share | 1.45% of all pay | $33.46 | $870.00 | IRS, Publication 15 (2026), Employer's Tax Guide (opens in a new tab) |
| Federal unemployment (FUTA) | 0.6% on the first $7,000After the full 5.4% credit. Employers in a credit reduction state pay more. | $13.85None after check 4 | $42.00 | IRS, Publication 15 (2026), Employer's Tax Guide (opens in a new tab) |
| Indiana unemployment | 2.5% on the first $9,5002.5% until experience-rated (36 months of coverage and payroll in each of the three 12-month periods ending June 30); government 1.6% | $57.69None after check 5 | $237.50 | Indiana DWD, New Employer Premium Rate (opens in a new tab); Indiana DWD, Unemployment Insurance Employer Guide (PDF) (opens in a new tab) |
| Employer taxes and contributions | $248.08 | $4,869.50 | ||
| Pay | $2,307.69 | $60,000.00 | ||
| Pay plus employer costs | $2,555.77 | $64,869.50 |
Checked on October 5, 2026. Shows one employee's pay for a full calendar year, every check at the rates in force on October 13, 2026, with all pay subject to these taxes, the new employer rates and the full employer shares the law sets. An employer may choose to pay an employee's share too. Benefits and other costs are not included.
Common questions
A new employer pays 2.5% until experience-rated (36 months of coverage and payroll in each of the three 12-month periods ending June 30); government 1.6%. The tax applies to the first $9,500 of each employee's wages a year.
Yes: 2.95% flat. Supplemental wages: same as regular wages.
$7.25 an hour.
No. Indiana has no state paid family or medical leave program funded through payroll.
WORKLIO HCM
Payroll taxes calculated, deposited and filed in every state
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Rates in other states
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
Sources
The agency page or document behind each figure, as checked.
- Indiana DWD, Unemployment Insurance: Employers (opens in a new tab)
- Indiana DWD, Unemployment Insurance Employer Guide (PDF) (opens in a new tab)
- Indiana Code 22-4-4-2 (2026) (opens in a new tab)
- Indiana DWD, New Employer Premium Rate (opens in a new tab)
- US DOL OUI, FUTA Credit Reductions (opens in a new tab)
- Indiana DOR, Withholding Income Tax (opens in a new tab)
- Indiana DOR, Departmental Notice #1, effective Oct. 1, 2026 (PDF) (opens in a new tab)
- Indiana Code 6-3-2-1(b)(8) (2026) (opens in a new tab)
- Indiana DOR, Income Tax Information Bulletin #28 (December 2024, PDF) (opens in a new tab)
- Indiana DOR, Withholding Tax Forms (opens in a new tab)
- Indiana Department of Labor, Indiana Minimum Wage Law poster (PDF) (opens in a new tab)
- Indiana Code 22-2-2-4 (2026) (opens in a new tab)
- Indiana Code 22-2-2-10.5 (2026) (opens in a new tab)
- Indiana Code Title 22 (2026) (opens in a new tab)
- Indiana Worker's Compensation Board, Compliance (opens in a new tab)
- IRS, Publication 15 (2026), Employer's Tax Guide (opens in a new tab)
General information, not legal or tax advice. Rules change; confirm current requirements with the relevant agency or your advisor. You remain responsible for your employment taxes.