Indiana Payroll, Unique Aspects of Indiana Payroll Law and Practice
Indiana Payroll has some unique aspects and conditions. Some of the details and laws are set forth in this article, including information regarding: tax withholding and reporting; tax and unemployment insurance reports; wage and hour laws; and child support withholding.
The Indiana State Agency that oversees the collection and reporting of state income taxes deducted from payroll checks is:
revenue Department
Compliance Division
North Central Indiana Government
Indianapolis, IN 46204-2253
(317) 233-4018
http://www.ai.org/dor
Indiana requires that you use the Indiana form “WH-4, Employee Withholding Exemption and County Status Certificate” instead of a federal form W-4 for Indiana state income tax withholding.
Not all states allow wage reductions made under Section 125 or 401(k) cafeteria plans to be treated in the same manner as the IRS code allows. In Indiana, cafeteria plans: are not taxed for income tax purposes; not taxable for unemployment insurance purposes. 401(k) plan deferrals are: not subject to income tax; taxable for unemployment purposes.
In Indiana, supplemental wages are taxed at a flat rate of 3.4%.
You can file your Indiana State W-2 forms by magnetic media if you wish.
The Indiana State Unemployment Insurance Agency is:
Department of Workforce Development
Indiana Center of Government S.
10 N. Senator Ave., Room 331
Indianapolis, IN 46204-2277
(317) 232-6702
http://www.state.in.us/workcomp/index.html
Indiana’s taxable wage base for unemployment purposes is wages up to $7,000.00.
Indiana has optional quarterly wage reporting on magnetic media.
Unemployment records must be kept in Indiana for a minimum period of five years. This information generally includes: name; Social Security number; hire, retirement and termination dates; salaries per period; payroll periods and pay dates; date and circumstances of termination.
The Indiana State Agency charged with enforcing state wage and hour laws is:
work Department
Wage and Hour Division
402 West Washington St., room W195
Indianapolis, IN 46204
(317) 232-2673
http://www.state.in.us/labor/
The minimum wage in Indiana is $5.15 per hour.
The general provision in Indiana regarding overtime pay at an employer not covered by the FLSA is one and one-half times the regular rate after a 40-hour week.
Indiana’s new hire reporting requirements are that every employer must report every new hire and rehire. The employer must report the elements required by the federal government of:
- Name of the employee
- employee address
- Employee Social Security Number
- Name of the employee
- employee address
- Federal Employer Identification Number (EIN) of the employer
This information must be reported within 20 days of hiring or rehiring.
The information can be submitted as a W-4 or equivalent by mail, fax, or electronically.
There is a $500 fine for a late report in Indiana.
You can contact Indiana’s New Hire Reporting Agency by calling 866-879-0198 or 317-612-3028 or on the web at http://www.in-newitze.com.
Indiana does not allow mandatory direct deposit
Indiana requires the following information on an employee’s pay stub:
Indiana requires that the employee be paid bi-weekly or semi-weekly; less frequently for FLSA-exempt employees.
Indiana requires that the lapse of time between the end of the pay period and the payment of wages to the employee shall not exceed ten days.
Indiana payroll law requires that involuntarily terminated employees be paid their final pay by the next regular payday and that voluntarily terminated employees be paid their final pay by the next regular payday.
The deceased employee’s wages must be paid when they are normally due to the surviving spouse; if none, other distribute after affidavit of entitlement; Inheritance not greater than $25,000.
Rollback laws in Indiana require that unclaimed wages be paid to the state after one year.
In addition, Indiana requires the employer to keep a record of wages abandoned and turned over to the state for a period of 10 years.
Indiana payroll law requires that no more than $3.02 may be used as a tip credit.
In Indiana, payroll laws covering mandatory breaks or meal breaks state that children under the age of 16 must have 30 minutes during the 3rd to 5th hour of a shift of at least 6 hours.
There is no provision in Indiana law regarding the retention of wage and hour records, so it is probably prudent to follow the FLSA guidelines.
The Indiana agency charged with enforcing child support laws and orders is:
Child Support Office
402 W. Washington St., Room W360
Indianapolis, IN 46204
(317) 233-5437
http://www.in.gov/dcs/support/index.html
Indiana has the following provisions for child support deductions:
- When to start retention? 14 business days after the withholding order is sent to the employer.
- When to send the payment? payday
- When to send a termination notice? Within 10 days of termination.
- Maximum administrative fee? $2 per payment.
- Withholding limits? Federal Rules under CCPA.
Please note that this article is not updated for changes that can and will occur from time to time.