Question 1

What is the Indiana SUTA rate for new employers in 2026?

Accepted Answer

New employers in Indiana pay 2.5% state unemployment tax on the first $9,500.00 of each employee's wages. 1.6% for government entities electing contributory status; construction new employers pay the lesser of 4.0% or the construction industry average. Established employers receive an annual rate notice based on their history.

Question 2

What is the Indiana unemployment tax wage base for 2026?

Accepted Answer

Indiana taxes the first $9,500.00 of each employee's wages for unemployment insurance. Fixed by statute. Wages above that amount are not subject to SUTA.

Question 3

How much does it cost to hire an employee in Indiana?

Accepted Answer

Using a typical scenario — a $60,000 salary, Indiana's new employer SUTA rate, office workers' comp, $500/month health insurance and a 3% retirement match — the total annual cost comes to about $72,819.50, or 1.21 times the salary. Use the calculator above with your own numbers.

Question 4

Does Indiana have paid family leave contributions?

Accepted Answer

No, Indiana does not currently run a state paid family and medical leave insurance program, so there is no mandatory PFML payroll contribution.

Question 5

Do employers in Indiana pay state income tax on employee wages?

Accepted Answer

Indiana has a state income tax on wages, but it is withheld from the employee's pay — it is not an employer cost. Employers are responsible for withholding and remitting it correctly.

Wages	$60,000.00
Social Security (6.2%)	$3,720.00
Medicare (1.45%)	$870.00
FUTA (federal unemployment)	$42.00
State unemployment (SUTA)	$237.50
Workers' comp	$150.00
Total annual cost	$65,019.50

New employer SUTA rate	2.5%1.6% for government entities electing contributory status; construction new employers pay the lesser of 4.0% or the construction industry average.
Experienced employer SUTA range	0.5% – 7.4%
SUTA taxable wage base	$9,500.00Fixed by statute.
Max SUTA per employee per year	$237.50
Paid family/medical leave program	No
State income tax on wages	Yes — employers withhold; not an employer cost
Source	Indiana unemployment insurance agencyVerified 2026-10-11

State	New employer rate	Wage base	Max SUTA per employee
Indiana	2.5%	$9,500.00	$237.50
Michigan	2.7%	$9,000.00	$243.00
Ohio	2.85%	$9,500.00	$270.75
Kentucky	2.7%	$12,000.00	$324.00
Illinois	3.35%	$14,250.00	$477.38

Indiana Employee Cost Calculator (2026)

Indiana employer payroll taxes at a glance

What it costs to hire in Indiana

What's different about hiring in Indiana

Compare neighboring states

Frequently asked questions

Sources & methodology

Employee cost calculators for other states

Related free tools