Payroll Indiana, unique aspects of Indiana payroll law and practice

Indiana payroll has some unique aspects and conditions. Some of the details and laws are set out in this article, including information on: tax withholding and reporting; unemployment insurance taxes and reporting; wage and hour laws; and child support withholding.

The Indiana State Agency, which oversees the collection and reporting of state income taxes deducted from paychecks, is:

revenue department

compliance department

Indiana government. mid north

Indianapolis, IN 46204-2253

(317) 233-4018

http://www.ai.org/dor

Indiana requires that you use the Indiana WH-4, Employee’s Withholding Exemption and County Status Certificate form instead of a Federal W-4 Form for Indiana State Income Tax Withholding.

Not all states allow pay cuts under Section 125 of the Cafeteria Plans or 401(k) to be treated in the same manner as the IRS Code allows. In Indiana, cafeteria plans are: not taxable for calculating income tax; not taxable for unemployment insurance purposes. 401(k) plan deferrals are: not subject to income tax; taxable for unemployment purposes.

In Indiana, extra wages are taxed at a flat rate of 3.4%.

You may submit your Indiana State W-2s on magnetic media if you wish.

The Indiana State Unemployment Insurance Agency is:

Personnel Development Department

Indiana S Government Center

10 N. Senate Ave., Rm. 331

Indianapolis, IN 46204-2277

(317) 232-6702

http://www.state.in.us/workcomp/index.html

The Indiana state 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 retained in Indiana for at least five years. This information generally includes: name; social security number; dates of employment, reinstatement and termination; wages by period; payroll periods and payment dates; Date and Circumstances of Termination.

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The Indiana State Agency charged with enforcing state wage and hour laws is:

work department

Wage and hour sharing

402 West Washington St., Rm. W195

Indianapolis, IN 46204

(317) 232-2673

http://www.state.in.us/labor/

The minimum wage in Indiana is $5.15 an hour.

The general rule in Indiana for overtime pay from a non-FLSA employer after the 40-hour week is one and a half times the regular rate.

Indiana’s new hire reporting requirement requires every employer to report all new hires and rehires. The employer must report the federally required elements of:

  • Name of the employee
  • address of the employee
  • Employee’s social security number
  • Name of employer
  • Employer’s Address
  • Employer’s Federal Employer Identification Number (EIN).

This information must be reported within 20 days of hiring or reinstatement.

Information may be submitted as W-4 or equivalent by mail, facsimile or electronically.

There is a $500 late reporting penalty in Indiana.

The Indiana New Hire Registration Office can be reached at 866-879-0198 or 317-612-3028 or on the web at http://www.in-newhire.com.

Indiana does not allow mandatory direct deposit

Indiana requires the following information on an employee’s payslip:

  • straight hours and overtime pay
  • working hours
  • itemized deductions
  • Indiana requires the employee to be paid semimonthly or biweekly; less common for FLSA-exempt employees.

    Indiana requires that the waiting period between the end of the pay period and the payment of wages to the employee does not exceed ten days.

    Indiana’s payroll law requires involuntarily terminated employees to be paid their last salary by the next regular payday and voluntarily terminated employees to be paid their last salary by the next regular payday.

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    The deceased worker’s wages must be paid if normally due to the surviving spouse; if not, other sales partner after affidavit; Discount no more than $25,000.

    Escheat laws in Indiana require unclaimed wages to be remitted to the state after one year.

    Indiana also requires the employer to keep records of wages forfeited and remitted to the state for a 10-year period.

    Per Indiana payroll law, no more than $3.02 may be used as a tip credit.

    In Indiana, wage laws for mandatory rest or meal breaks only provide that minors under the age of 16 must have 30 minutes during the 3rd to 5th hour of a minimum 6-hour shift.

    Indiana law has no provision for keeping wage and hour records, so it’s probably wise to follow FLSA guidelines.

    The Indiana agency charged with enforcing child support orders and laws 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 withholding? 14 working days after sending the withholding order to the employer.
    • When should the payment be sent? payday
    • When to send notice of termination? Within 10 days of termination.
    • Maximum management fee? $2 per payment.
    • retention limits? Federal rules under CCPA.

    Please note that this article is not updated for changes that may and will occur from time to time.

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