Indiana Payroll Rules

Frequency of Payments

You must pay your hourly employees at least twice per month. You must pay all your employees within 10 days of the end of their pay period.

Manner of Payments

You may pay your employees by cash, check, or direct deposit.

If the employee can choose the financial institution with which the wages are deposited, you can require the employee to receive their paychecks via direct deposit.

Payment Upon Separation

If you discharge an employee for any reason, you must pay the employee by the next regular payday.

If the employee quits or resigns voluntarily, you must pay the employee by the next regular payday.

If the employee quits or resigns voluntarily and you do not have their address, then you must pay them

• within 10 business days after the employee has demanded their paycheck, or
• when you learn where the paycheck can be sent or forwarded.

If the employee is suspended or resigns due to a labor dispute (like a strike), you must pay the employee by the next regular payday.

Deductions

You can deduct amounts from an employee’s paycheck if

• the employee consents in writing,
• the employee personally signs the written consent form,
• the employee can revoke consent at any time with written notice, and
• you agree to it in writing.

The employee must give you a copy of their consent within 10 days of the deduction’s implementation.

An employee can only give written consent to the following deductions:

• premiums on an insurance policy;
• contributions to a charitable organization;
• purchase price of bonds, securities or stock of your company;
• labor union dues;
• purchase price of merchandise sold by you to them;
• payments on a loan made to the employee by you;
• contributions to a hospital service or medical expense plan; and
• payment to the employee’s direct deposit account.

If you overpaid an employee, you may deduct the overpayment from the employee’s paycheck. However, you must give the employee two (2) weeks’ notice before deducting the overpayment.

You cannot deduct the following from an employee’s paycheck:

• cash shortages;
• breakage, damage, or loss of the employer’s property;
• required uniforms;
• required tools; or
• other necessary items.

You cannot deduct amounts from an employee’s paycheck that are more than

• 25% of the employee’s disposable earnings for that week, or
• the amount by which the employee’s disposable earnings for the week exceed 30 times the federal minimum wage rate.

Uniforms & Other Required Equipment or Tools

Indiana does not have any laws about whether you can require an employee to purchase a uniform or equipment necessary for them to do their job. However, you cannot deduct the cost from their paycheck.

Pre-Hire Medical, Physical, & Drug Tests

Indiana does not have any laws about whether you can require employees to pay for pre-hire exams.

Notice of Wage Reduction

There are no laws dictating whether you have to notify an employee about the wage reduction.

Paystubs

For each employee, you must provide a paystub for each pay period. The paystub must include:

• hours worked,
• wages paid, and
• deductions made.

Recordkeeping

Indiana does not have any specific payroll recordkeeping laws.

Notices

Indiana does not require you to post payroll-related notices.