The minimum wage in Indiana is $7.25 an hour as of October 2026, the same as the federal rate. Indiana's own law covers employers of 2 or more employees, so even a small business outside federal coverage still has to pay $7.25 once it has a second worker.
This page draws on the Indiana Department of Labor's explanation of the state minimum wage law, the State of Indiana's wage FAQ and the U.S. Department of Labor's state, tipped and payday tables, all read in October 2026. The rate is simple. The parts owners get wrong are the youth rate, the tipped wage and a pay stub rule most people don't know Indiana has.
Indiana rates at a glance
| Worker | Hourly rate (as of October 2026) |
|---|---|
| Most employees | $7.25 |
| Tipped employees, minimum cash wage | $2.13 |
| Maximum tip credit | $5.12 |
| Under 20, first 90 consecutive calendar days | $4.25 |
The Indiana Department of Labor says employers may pay $4.25 an hour to employees under 20 for their first 90 consecutive calendar days after they're first hired. After that window, or once the worker turns 20, the full $7.25 applies.
Two laws, one rate
Indiana runs two systems side by side. If your business is covered by the federal Fair Labor Standards Act, the federal law sets your minimum wage and overtime. If it isn't, the Indiana Minimum Wage Law steps in. The State of Indiana's FAQ is clear that employers not subject to the federal law, which in practice means small businesses, still owe the state minimum wage and overtime after 40 hours a week.
The U.S. Department of Labor's state table adds the threshold: Indiana's law applies to employers of 2 or more employees. A sole trader with a single helper sits outside the state law, but should still check whether the federal law reaches them through interstate work.
The pay statement Indiana requires
Here's the detail most guides skip. The Indiana Department of Labor's explanation says every employer subject to the Indiana Minimum Wage Law must give each employee a statement of the hours they worked, the wages paid and a list of the deductions made. If you pay a small team in cash or by bank transfer with no pay stub, that's a gap to close.
- Record the hours each employee worked in the pay period.
- Show the gross wages paid for those hours.
- List every deduction, such as tax withholding or an agreed repayment.
- Hand the statement over with each payment and keep a copy.
Tipped pay in Indiana
Indiana follows the federal tipped figures. An employer claiming a tip credit must pay at least $2.13 an hour in cash, and if tips plus that cash wage don't reach $7.25, the employer must make up the difference. A tipped employee is someone who receives more than $30 a month in tips. If you pool tips across the team, my tip pooling guide explains the limits.
Overtime and paydays
Overtime is time and a half after 40 hours in a workweek under both the federal law and Indiana's law. The state explanation notes there are many exceptions, listed in Indiana Code 22-2-2-3. On pay timing, the U.S. Department of Labor's payday table lists Indiana under bi-weekly and semi-monthly, so a monthly payroll for hourly staff isn't the safe choice.
How Indiana's rate got here
| Date | Indiana rate | Note |
|---|---|---|
| 2000 to 2007 | $5.15 | Employers of 2 or more |
| July 24, 2008 | $6.55 | State FAQ |
| July 24, 2009 | $7.25 | State FAQ |
| As of October 2026 | $7.25 | No change since 2009 |
Indiana and the states around it
| State | Basic minimum wage (as of October 2026) |
|---|---|
| Indiana | $7.25 |
| Illinois | $15.00 |
| Michigan | $13.73 |
| Ohio | $11.00 (larger employers) |
| Kentucky | $7.25 |
Indiana and Kentucky pay the federal floor, while Illinois, Michigan and Ohio all pay more. If you hire across the state line into Chicago's suburbs, my Illinois minimum wage guide shows how big the gap is.
Does the federal law reach your business?
The State of Indiana's FAQ explains when the federal Fair Labor Standards Act applies. An enterprise is covered if it has employees engaged in interstate commerce, or in producing goods for interstate commerce, and has annual gross sales of more than $500,000. Schools, hospitals, health care facilities and public agencies are covered whatever their sales. Individual workers can also be covered through their own interstate work even when the business is smaller.
If you're covered, federal rules set your minimum wage and overtime. If you're not, the Indiana Minimum Wage Law does, and the Indiana Department of Labor's Wage and Hour Division enforces it. The state explanation also notes that Indiana's law prohibits pay discrimination on the basis of sex, and that breaking the law can bring both civil and criminal penalties.
If you can't tell whether you're covered, pay the $7.25 and the federal overtime rules. Both laws use the same rate, so the only real risk is in the youth and tipped exceptions.
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My verdict
Indiana's $7.25 is easy to remember, and the youth rate is a narrow exception that ends after 90 days. The rule that catches small businesses is the pay statement: hours, wages and deductions on every payment. Get that habit in place and you've covered the part of Indiana law most owners never hear about. For the wider picture, see my federal minimum wage guide.
Frequently asked questions
What is the minimum wage in Indiana?
It's $7.25 an hour as of October 2026, the same as the federal rate.
Who does Indiana's minimum wage law cover?
The state law applies to employers of 2 or more employees that aren't already covered by the federal Fair Labor Standards Act.
Can Indiana employers pay teenagers less?
Yes, $4.25 an hour for employees under 20 during their first 90 consecutive calendar days with the employer.
What is the tipped minimum wage in Indiana?
It's $2.13 an hour in cash, as long as tips bring the total to at least $7.25.
Do Indiana employers have to give pay stubs?
Yes. Employers under the state law must give each employee a statement of hours worked, wages paid and deductions made.
When did Indiana's minimum wage last change?
It rose to $7.25 an hour on July 24, 2009 and hasn't changed since.
Is Indiana's minimum wage the same as Illinois?
No. Indiana pays $7.25 while Illinois pays $15.00 an hour as of October 2026.
How often must Indiana employers pay?
The U.S. Department of Labor's payday table lists Indiana under bi-weekly and semi-monthly paydays.
