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Indiana has a flat 3.05% state income tax and all 92 counties have their own county income tax (0.5–3.38%). Rippling automatically applies the correct county rate by employee residence and handles all IN DOR and DWD filings.
Indiana is a major Midwestern manufacturing, logistics, and growing technology state, with Indianapolis as the primary business hub and Bloomington, Fort Wayne, and South Bend as growing secondary markets. Indiana payroll is defined by a flat 3.05% state income tax (one of the lowest in the Midwest) and county income tax across all 92 counties (rates ranging from 0.5% to 3.38%), withheld based on the employee’s county of residence. Indiana is a right-to-work state with no state-mandated paid family leave.
Rippling’s Indiana payroll module provides:
| Contribution | Rate | Notes |
|---|---|---|
| FUTA | 6.0% (net 0.6%) | After SUTA credit; first $7,000 |
| IN SUI (DWD) | New employer 2.5% | On first $9,500 of wages (2024) |
| Social Security | 6.2% | Up to $168,600 (2024) |
| Medicare | 1.45% | No wage base limit |
| Workers’ Compensation | Varies by risk class | Mandatory for most employers |
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| Contribution | Rate | Notes |
|---|---|---|
| Federal Income Tax | Graduated 10–37% | Per W-4 |
| Social Security | 6.2% | Up to $168,600 (2024) |
| Medicare | 1.45% + 0.9% surtax | Surtax above $200K single |
| Indiana State Income Tax | 3.05% flat | Reduced from 3.23% effective January 2024 |
| Indiana County Income Tax (CAGIT) | 0.5%–3.38% | All 92 counties; based on employee county of residence |
| Indiana Income | IN Rate |
|---|---|
| All income | 3.05% flat |
Plus county income tax (CAGIT) based on employee home county (0.5–3.38%). Total combined state+county typically 3.5–6%. IN withholding remitted to IN DOR. Annual WH-3 reconciliation.
Final Pay: Indiana requires final pay on the next regularly scheduled payday. No immediate payment requirement. Accrued vacation payout governed by employer written policy — Indiana courts generally enforce written forfeiture policies.
All 92 Indiana counties levy a County Adjusted Gross Income Tax (CAGIT) ranging from 0.5% to 3.38%. Employers withhold the CAGIT at the rate of the employee’s county of residence (not work location). CAGIT is remitted to IN DOR along with state income tax on the same filing. Rippling determines the correct county rate from the employee’s home address at onboarding.
Indiana’s flat income tax rate is 3.05% for 2024 (reduced from 3.23%). Further reductions are planned: 3.0% (2025), 2.95% (2026), 2.9% (2027). Indiana is progressively reducing its flat rate to compete with Tennessee and other no/low-income-tax states. Rippling updates the rate annually.
Indiana requires workers’ comp coverage for most employers with employees. Coverage through private insurers or the Indiana Compensation Rating Bureau. The Indiana Workers’ Compensation Board administers claims. Rates vary by occupation risk classification.
Indiana’s minimum wage is $7.25/hour — matching the federal minimum. Indiana has not enacted a state minimum above the federal floor and has preempted local minimum wage ordinances.
