Indiana Minimum Wage: Rates and Rules for Employers
Indiana’s minimum wage is $7.25 per hour, effective July 24, 2009. Tip credit, the $4.25 training wage, poster rules and local rates for employers.
Indiana Minimum Wage
The state rate matches the federal $7.25 and no city sets its own, but Indiana still has a wage law of its own, with a training wage and a required poster attached to it
The first Indiana payroll I helped set up came with a question I could not answer in the first five minutes: is the Indiana rate the federal rate, or does Indiana just not have a rate? Those sound like the same thing. They are not, and the difference shows up in a poster on your wall.
Indiana does have its own minimum wage law. It sets the same number the federal law does, so the payroll math never diverges, but the state law brings its own poster, its own training wage and its own penalties. Employers who treat Indiana as a no-wage-law state skip the state poster and pick up an avoidable finding.
This page covers one thing: what an Indiana employer pays per hour and what moves that number. Everything else, from county income tax to final paychecks, lives in the Indiana HR compliance guide.
The Current Indiana Minimum Wage
The minimum wage in Indiana is $7.25 per hour, and it took effect on July 24, 2009. That is both the state rate and the federal rate, because the Indiana Minimum Wage Law sets the same figure the Fair Labor Standards Act does.
The Indiana Department of Labor states it plainly on the Indiana Minimum Wage Law poster: the rate is $7.25 per hour, and both the federal and the Indiana state minimum wage increased from $6.55 per hour to $7.25 per hour effective July 24, 2009. Seventeen years later that is still the number.
The US Department of Labor lists Indiana among the states whose rate equals the federal floor in its state minimum wage laws table. Indiana is not in the group of states with no wage statute at all, which is a distinction that only matters when you get to the poster and the coverage questions further down.
| Rate | Amount per hour | In effect since | Source |
|---|---|---|---|
| Indiana state minimum wage | $7.25 | July 24, 2009 | Indiana Minimum Wage Law, per the Indiana Department of Labor poster |
| Previous Indiana rate | $6.55 | Replaced on July 24, 2009 | Indiana Department of Labor poster |
| Federal minimum wage | $7.25 | July 24, 2009 | Fair Labor Standards Act section 6(a)(1) |
| Tipped employee cash wage | $2.13 | Current rate published by the state | Indiana Department of Labor poster |
| Maximum tip credit | $5.12 | Current | Arithmetic: $7.25 minus the $2.13 cash wage |
| Training wage, under 20, first 90 consecutive calendar days | $4.25 | Current rate published by the state | Indiana Department of Labor poster |
| City or county rate | None anywhere in Indiana | Not applicable | No Indiana locality publishes a rate |
Is Another Increase Scheduled?
No increase is scheduled in Indiana. The Indiana Department of Labor publishes one rate, $7.25, with no future step attached to it, and that rate has not changed since July 24, 2009.
Indiana runs no annual inflation adjustment. There is no January step, no consumer price index formula and no notice arriving each autumn to tell you the number moved, which is the opposite of how payroll works in a growing number of states. The rate changes only if the Indiana General Assembly amends the state wage law or Congress raises the federal floor.
If you employ people across state lines, the calendar looks very different one state over. Our tracker of scheduled minimum wage increases covers what is already on the books elsewhere, which is worth a look before you standardize a starting rate across a multi-state team.
Tipped Employees and the Tip Credit
A tip credit is allowed in Indiana. You may pay a direct cash wage as low as $2.13 per hour and count tips toward the rest, provided the employee actually reaches $7.25 for the hours worked.
The Indiana Department of Labor puts the rule in two sentences on the state poster: employers must generally pay tipped employees at least $2.13 per hour if the employer claims a tip credit, and if the employee's tips combined with the hourly wage do not equal the minimum wage, the employer must make up the difference. With a $7.25 floor and a $2.13 cash wage, the maximum tip credit works out to $5.12 per hour.
The top-up is the obligation that gets missed. It is not a courtesy and it is not discretionary, and it is measured against the hours the employee actually worked rather than against a monthly average. The mechanics, including tip pooling and the notice you owe the employee, are worked through in our guide to minimum wage for tipped employees.
City and County Rates in Indiana
There are no city or county minimum wage rates in Indiana. Every Indiana employer works from the same $7.25 figure, and the Indiana Department of Labor publishes one statewide rate rather than a local schedule.
If you have been searching for an Indianapolis rate or a Bloomington rate and coming up empty, that is because there is not one, not because you missed it. For a multi-site employer this removes a real category of work: no ordinance lookup, no split-rate payroll setup, no separate poster for a single location.
| Jurisdiction | Local minimum wage | What the employer pays |
|---|---|---|
| Indianapolis and Marion County | None | $7.25 statewide rate |
| Fort Wayne, Allen County | None | $7.25 statewide rate |
| Evansville, South Bend, Hammond | None | $7.25 statewide rate |
| Bloomington, Carmel, Fishers, Lafayette | None | $7.25 statewide rate |
| All other Indiana cities, towns and counties | None | $7.25 statewide rate |
One caveat is worth carrying. Public contracts can set their own wage terms, and those terms ride on the contract rather than on the wage law, so a city or county job can come with a rate written into the paperwork. Read the contract before you price the labor on it.
Industry Carve-Outs
Indiana has no industry-specific minimum wage. There is no fast food council rate, no healthcare minimum, no separate agricultural state rate and no hospitality schedule, so a warehouse, a clinic, a farm and a diner all work from the same $7.25 figure.
What does vary is which employees are covered at all. Both the Indiana wage law and the federal law carry exemptions, and the federal ones are the ones most Indiana employers will actually hit, because most Indiana employers are covered by the federal law. The state poster points to Indiana Code 22-2-2-3 for the state overtime exceptions.
| Industry | Indiana rate | What applies instead |
|---|---|---|
| Fast food and quick service | No Indiana industry rate | $7.25 for every covered employee |
| Healthcare, home care and residential care | No Indiana industry rate | $7.25, subject to the federal exemptions that apply to the role |
| Agriculture | No Indiana industry rate | $7.25, subject to the federal small farm exemption |
| Restaurants and bars with tipped staff | No separate Indiana rate | $2.13 cash wage plus up to $5.12 in tips, topped up to $7.25 |
| Seasonal and recreational work | No Indiana industry rate | $7.25, subject to the federal seasonal exemptions |
Exempt status under the white collar rules is a different question from the wage floor and is decided role by role, not department by department. If you are not certain a salaried position is genuinely exempt, work through exempt versus non-exempt classification before you set the salary, because fixing it afterwards means back pay.
The Indiana Training Wage
Indiana employers may pay $4.25 per hour to employees under 20 years of age for the first 90 consecutive calendar days after the employee is initially employed. The Indiana Department of Labor calls this the training wage and publishes it on the state minimum wage poster.
Two limits catch employers out, and both are on the face of the rule. The 90 days are consecutive calendar days rather than days worked, so the clock keeps running through school terms, slow seasons and unpaid gaps. And the rate is tied to age, so it ends the day the employee turns 20 even if the 90 days are not up.
Whichever limit arrives first ends the training wage, and the employee moves to $7.25 from that point. Diary the date at hire rather than trusting yourself to notice it later. A training wage that runs three weeks too long is a wage claim with a very simple arithmetic answer, and the Indiana Department of Labor takes those claims through an online form.
The Poster Requirement
Indiana employers post the Indiana Minimum Wage Law poster, and the Indiana Department of Labor lists it as required for any business covered by that law. The poster itself states that Indiana law requires it to be displayed in a conspicuous place in the area where employees are employed.
This is the piece employers coming from a no-wage-law state miss. Because the Indiana rate is identical to the federal rate, it is easy to assume the federal notice covers everything. It does not. The state poster is a separate document, published free by the Indiana Department of Labor Wage and Hour Division, and it carries the training wage and tipped wage language the federal notice does not.
Employers covered by the Fair Labor Standards Act also post the federal minimum wage notice, available free from the Wage and Hour Division poster page. Most Indiana employers are covered by both laws, so in practice both notices go up on the same wall. Neither one needs to be bought from a vendor.
Which Law Actually Covers Your Employees
Most Indiana employees are covered by the federal law, and the Indiana law picks up part of the remainder. The Indiana Department of Labor puts it this way on the state poster: most Indiana employers and employees are covered by the minimum wage and overtime provisions of the federal Fair Labor Standards Act, and those not covered under federal law may still be covered by the Indiana Minimum Wage Law.
That second clause is why Indiana having its own statute matters even though the number is identical. In a state with no wage law, an employee outside federal coverage has no wage floor at all. In Indiana there is a second law that may still reach them, which changes the answer for a small employer who assumed being under the federal revenue threshold ended the conversation.
The state law brings a few obligations beyond the rate itself. Every employer subject to it must give each employee a statement of hours worked, wages paid and deductions made. The law also prohibits pay discrimination on the basis of sex, and it carries both civil and criminal penalties for violations, which is unusual among state wage statutes.
For how federal coverage is determined, and for the national rate picture, start with our FLSA overview and the federal minimum wage guide. Neither question is Indiana-specific, and this page does not restate them.
What to Do When a Rate Rises
When the Indiana or federal rate moves, the work is short, specific and easy to leave half done. Indiana has no wage-change notice statute forcing a deadline on any of it, so nothing external will prompt you.
FirstHR keeps pay rates, offer letters and signed acknowledgements in one employee record, so a rate change updates in one place instead of five spreadsheets. FirstHR is an onboarding and HR platform, not a payroll provider, so the wage calculation itself still happens in your payroll system.
Frequently Asked Questions
What is the minimum wage in Indiana?
$7.25 per hour, in effect since July 24, 2009. Indiana has its own wage statute, the Indiana Minimum Wage Law, which sets the same figure as the federal law. The Indiana Department of Labor poster records that both rates moved from $6.55 to $7.25 on that date.
Is the Indiana minimum wage going up?
No increase is scheduled. The state publishes one rate with no future step, and Indiana has no annual inflation adjustment. The number moves only if the Indiana General Assembly amends the state law or Congress raises the federal floor.
What do I have to pay tipped employees in Indiana?
At least $2.13 per hour in cash wages where you claim a tip credit, with tips covering the rest of $7.25. That makes the maximum tip credit $5.12. If tips plus the cash wage fall short of the minimum, the Indiana Department of Labor requires the employer to make up the difference.
Can a city or county in Indiana set a higher minimum wage?
No Indiana city or county has one today. Indianapolis, Fort Wayne, Evansville, South Bend and Bloomington all run on the statewide $7.25 figure, and the state publishes a single rate rather than a local schedule. Public contracts can still carry their own wage terms, so read the contract on a public job.
Can I pay a teenager less than $7.25 in Indiana?
Yes. Indiana employers may pay a $4.25 training wage to employees under 20 for the first 90 consecutive calendar days after they are initially employed. The days are calendar days rather than days worked, and the rate ends at the employee's twentieth birthday if that comes first.
Which minimum wage poster do Indiana employers display?
The Indiana Minimum Wage Law poster, required for any business covered by that law and displayed in a conspicuous place where employees are employed. Employers covered by the federal law post the federal notice as well. Both are free downloads from the two labor departments.
Overtime is the companion question to the wage floor, and Indiana sets its own rule at one and a half times the regular rate over 40 hours in a work week with a list of statutory exceptions. For the calculation itself, start with our overtime pay guide, then return to the Indiana compliance hub for the rest of the state picture.