Indiana minimum wage 2026: $7.25 an hour and the paycheck it pays

$7.25 an hour. Indiana does not set a rate above the federal Fair Labor Standards Act floor, which has been $7.25 since July 24, 2009 — the longest stretch without an increase since the federal minimum wage began in 1938. 20 of the 50 states and DC sit at $7.25; the other 31 pay more. Any increase here would have to come from Congress or from a change to Indiana law.

At $7.25 and 40 hours a week, gross pay is $290 a week, $1,257 a month and $15,080 a year. A single filer with no other deductions takes home about $260 a week, $520 every two weeks, $1,126 a month or $13,511 a year. Social Security takes $935 a year and Medicare $219. Indiana income tax takes $415, so the overall rate is 10.4%.

Before. A minimum wage is a floor on gross pay — the figure your employer must pay for each hour worked, calculated before any withholding. Payroll taxes come out afterwards, so what lands in your account is always less than $7.25 an hour. In Indiana the gap on a full 40-hour week is $30, taking $290 gross down to about $260 net.

$2.13 an hour in direct cash wages, with tips making up the rest of the $7.25 minimum. The tip credit an employer may claim is $5.12 an hour. If tips plus the cash wage do not reach $7.25 for the hours worked, the employer has to pay the difference. A tipped employee under federal law is someone who customarily and regularly receives more than $30 a month in tips. Tips are taxable wages reported through payroll, and for 2026 up to $25,000 of qualified tips is deductible on your federal return.

Where a city, county or region carries a higher rate, that rate governs for work done there. A wage floor can be raised above the state figure but never lowered below it. No Indiana city currently runs above the statewide $7.25, so that one figure applies across the state. Whatever the wage floor, the payroll tax on it works the same way everywhere in Indiana.

Indiana is one of 20 jurisdictions at the federal $7.25. The highest rate in the country is the District of Columbia at $18.40, followed by Washington at $17.13 and New York City at $17.00. The practical effect is that the statutory floor binds mainly in tipped work and some rural service jobs here, because market wages sit well above it almost everywhere. That is why the more useful question is usually what $15 or $20 an hour takes home.

Start with your pay stub: multiply the hours worked by $7.25 and compare it with gross pay for the period, before deductions. Unpaid minimum wage is a wage claim, filed with the Indiana labor office under state law or with the U.S. Department of Labor Wage and Hour Division under the Fair Labor Standards Act, which carries its own filing window. Deductions that push effective pay below the minimum — uniforms, tools, till shortages — are generally not allowed. Employers must display the federal minimum wage poster in the workplace.