Resources

Facts & Figures
Federal FAQ
States FAQ
Indiana FAQ
Links

Automated Payroll Service, LLC 300 Main Street, Suite 100 Lafayette, IN 47901 Phone:  (765)-463-4300 Fax:  (765)-463-0588 Contact Us Click here for Directions

Username Password Company   Employer Login Employee Login Support System Capabilities

Indiana - Frequently Asked Questions

• Are there rules about when I must pay my employees?
  
  Yes.  In Indiana, an employer must pay its employees at least bi-weekly (every two weeks) or semi-monthly (twice a month) if the employees request to be paid that often.  Otherwise, you may pay at any mutually agreed upon frequency.  Regardless of pay frequency, employees must be paid within 10 days of the end of the pay period.  If the paydate falls on a weekend or holiday, Indiana requires that you pay by the last banking day before the weekend or holiday.  There is no requirement in Indiana that you pay a terminated employee immediately.  He may be paid on the next regular paydate.
   
• Besides withholding taxes, what deductions can I make from my employees’ paychecks?
  
  Indiana limits the types of deductions, which you can make and requires that any of these deductions be requested in writing by the employee.  You may make deductions for the following:

1. Insurance
2. Charitable contributions (United way, etc.)
3. Savings bonds
4. Stock in the employer’s company
5. Union dues
6. Repayment of a loan made to the employee
7. Merchandise sales made to the employee
8. Benefit contributions (401(k), cafeteria plans, etc.)
9. Payments to credit unions
10. Direct deposits
11. Life insurance
12. Overpayments made to the employee (after two weeks’ notice of your intent to make the deduction.)
13. Judgment owed by the employee

• Which county’s tax should be withheld from my employees’ checks?
  
  An employee should be paying tax to the county where he/she lives on January 1 of that year.  If the county where he/she lives does not have a county tax, and the county where the work is performed does, he/she should be paying tax (at the lower, non-resident rate) to the work county.  This does not change if the employee moves from one county to another during the year and will not change his/her withholding during the year.  The employee must complete a new form WH-4 indicating his/her new county of residence by January 1st of the new year.  Forward a copy of the form to us and we will change his/her withholding for the next year.
   
• How is unemployment tax calculated?
  
  Indiana State unemployment tax (SUI) can vary from .1% to 5.5%.  It also is calculated on the first $7,000.00 paid to an employee in a calendar year.  Thus, your annual unemployment tax expense can be increased substantially if you experience high turnover of your staff.  New employers generally are assigned a rate of 2.7%.  After the first three years, your rate depends on your experience (unemployment claims filed, timeliness of payment, etc.).  Toward the end of each year, you should receive a notice of your Indiana SUI rate for the next year.  Please forward this notice to us so that we can make any necessary changes at the first of the year.
   
• How are my employees’ bonus and commission checks taxed?
  
  Bonuses and commissions are considered supplemental pay and are subject to supplemental withholding.  state governs the rate at which supplemental earnings are taxed. Indiana requires a flat 3.4% and the appropriate county’s flat rate be used.
   
• What are the benefits of Pre-tax deductions from my employees’ paychecks?
  
  The following chart summarizes the taxability of the deductions in Indiana: 

Making these deductions on a pre-tax basis results in more take-home pay for the employees, and in the case of cafeteria plan deductions, also results in a savings in the employer’s share of FICA and Medicare taxes and unemployment taxes. 

• Which governmental forms do I need to forward to APS?
  
  If you are not on our tax service, the only tax forms you need to send us are the WH-1’s (for Indiana state and local withholding payments) & the 8109’s (for federal tax deposits).  It is very important that you send these forms to us as you receive them.  These are controlled forms and no substitutes are allowed.  We cannot guarantee that substitute forms will be accepted by the taxing agencies and there may be additional fees imposed if we do not have your preprinted forms.  You do not need to send us the other forms you receive during the year.  Our payroll software produces the other forms we need.
  
  Additionally, any rate changes/notices that you receive should be forwarded to APS to ensure that you maintain compliance with the appropriate taxing authority.
   
• What is the current minimum wage?
  
  Indiana’s current minimum wage is $5.85 per hour.