Indiana Minimum Wage 2026: $7.25 per Hour, Tipped Wage $2.13
Indiana minimum wage is $7.25 per hour, equal to the federal rate, for employers with two or more employees. Tipped cash wage is $2.13, a $4.25 training wage applies to workers under 20, and no increase is scheduled.
The Indiana minimum wage is $7.25 per hour, the same as the federal minimum wage, and it has been at that level since July 24, 2009. The Indiana Minimum Wage Law covers employers with two or more employees that are not already covered by the federal Fair Labor Standards Act. Tipped employees may be paid a cash wage of $2.13 per hour as long as tips bring them to $7.25, and employers may pay workers under 20 a $4.25 training wage for their first 90 days. Indiana does not index its rate and no increase is scheduled.
- Indiana pays $7.25 per hour, matching the federal rate, with no change since 2009
- The state law covers employers with two or more employees; the federal law covers most of them anyway
- Tipped cash wage is $2.13 with a $5.12 tip credit
- Workers under 20 may be paid $4.25 for their first 90 consecutive days
- Indiana bars cities and counties from setting a higher local minimum wage
Current Indiana Minimum Wage
The Indiana Department of Labor enforces the Indiana Minimum Wage Law (Indiana Code 22-2-2) for employers that are not covered by the federal FLSA. The state rate is $7.25 per hour, and the department's minimum wage poster has carried that figure since the 2009 federal increase. The US Department of Labor's July 1, 2026 table lists Indiana at $7.25 with coverage starting at two or more employees.
In practice the federal law covers the vast majority of Indiana employers, because it reaches any business with $500,000 or more in annual sales and any employee engaged in interstate commerce, including handling goods that crossed state lines. The state law fills the gap for small local businesses that fall outside federal coverage, which is why the two-employee threshold matters more for coverage than for the rate itself.
Indiana's law also allows a training wage of $4.25 per hour for employees under 20 during their first 90 consecutive calendar days of employment, mirroring the federal youth wage. After 90 days, or when the employee turns 20, the full rate applies.
Indiana Minimum Wage vs Federal Minimum Wage
| Rate | Amount | Effective |
|---|---|---|
| Indiana minimum wage | $7.25 per hour | July 24, 2009 |
| Federal minimum wage | $7.25 per hour | July 24, 2009 |
| Indiana and federal tipped cash wage | $2.13 per hour | Unchanged since 1991 |
| Training wage (under 20, first 90 days) | $4.25 per hour | Both state and federal |
Because the rates match, Indiana employers apply one figure. The difference is which agency enforces it: the Indiana Department of Labor for state-only employers, and the federal Wage and Hour Division for FLSA-covered employers. Indiana's neighbors are split; see our minimum wage by state guide, which shows Illinois at $15.00, Michigan at $13.73, Ohio at $11.00, and Kentucky at $7.25.
Tipped Minimum Wage in Indiana
Indiana follows the federal tip credit structure. The US Department of Labor's tipped wage table lists Indiana at a $2.13 cash wage with a maximum tip credit of $5.12. If cash wages plus tips do not average $7.25 per hour over the workweek, the employer must pay the difference. Employers must tell tipped employees about the tip credit before using it, and tips belong to the employee apart from valid tip pools among staff who customarily receive tips.
Indiana Minimum Wage Increase Schedule
Indiana has tracked the federal rate through every recent change.
| Effective date | Rate |
|---|---|
| July 24, 2007 | $5.85 |
| July 24, 2008 | $6.55 |
| July 24, 2009 | $7.25 |
| 2010 through 2026 | $7.25, no change |
No increase is scheduled and Indiana does not index its rate to inflation. Bills to raise the state minimum wage are introduced in most sessions of the General Assembly but have not advanced. An increase would require either state legislation or a federal increase, which Indiana law would follow.
Local Minimum Wages in Indiana
Indiana Code 22-2-2-10.5 prohibits local governments from establishing a minimum wage that exceeds the state rate. Indianapolis, Fort Wayne, Evansville and every other city and county follow $7.25, so employers can apply one rate statewide.
Who Is Covered and Who Is Exempt
The state law covers employers with two or more employees that are not covered by the federal act, and it exempts categories similar to federal law: bona fide executive, administrative and professional employees, outside sales staff, some agricultural and seasonal workers, certain students, and family members employed in a family business. For FLSA-covered employers, the federal exemptions apply. Our guide to exempt vs non-exempt employees explains the salary and duties tests, and our Indiana labor law guide covers overtime, breaks and leave rules for the state.
Overtime and the Minimum Wage
Indiana requires time and a half after 40 hours in a workweek for non-exempt employees, matching federal law, with no daily overtime rule. A minimum wage worker who works 45 hours earns 40 hours at $7.25 ($290.00) plus 5 overtime hours at $10.875 ($54.38), for $344.38 gross. Use our overtime calculator for any rate, and see our guide to overtime pay laws by state.
What a Minimum Wage Worker Earns in Indiana
| Period | Hours | Gross pay at $7.25 |
|---|---|---|
| Weekly | 40 | $290.00 |
| Biweekly | 80 | $580.00 |
| Monthly (average) | 173.33 | $1,256.64 |
| Annual | 2,080 | $15,080.00 |
These are gross wages before taxes and deductions; see our explainer on gross pay and the salary to hourly calculator.
Employer Compliance Checklist
- Pay at least $7.25 per hour to every non-exempt employee
- Limit the $4.25 training wage to workers under 20 and to their first 90 consecutive days
- Pay tipped staff at least $2.13 in cash wages, provide the tip credit notice, and make up any weekly shortfall
- Apply overtime after 40 hours in a workweek
- Post the Indiana minimum wage poster and the federal FLSA poster
- Keep accurate time records for hourly staff; a time card calculator or automatic time tracking makes overtime and tip credit reconciliation simple
Reviewed September 2026
Rates come from the Indiana Department of Labor's wage and hour resources and the US Department of Labor state and tipped minimum wage tables as of July 1, 2026. The training wage and coverage details are summarized from Indiana Code 22-2-2; confirm them with the department before relying on an exemption.
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How Indiana Compares With Neighboring States
Indiana is the only one of its immediate neighbors besides Kentucky that still pays the federal rate.
| State | Minimum wage (July 1, 2026) | Notes |
|---|---|---|
| Indiana | $7.25 | Employers with 2 or more employees |
| Illinois | $15.00 | Employers with 4 or more employees; Chicago and Cook County higher |
| Michigan | $13.73 | Rises to $15.00 on January 1, 2027 |
| Ohio | $11.00 | Employers with $405,000 or more in receipts; indexed |
| Kentucky | $7.25 | Federal rate |
Employers in the Chicago suburbs, Louisville metro and Cincinnati area routinely staff across these lines, and the gap between Indiana and Illinois is the largest between any two neighboring states in the Midwest.
Common Minimum Wage Mistakes in Indiana
- Paying $4.25 to a worker under 20 beyond the 90-day training window
- Paying tipped staff less than $2.13 or failing to make up a weekly shortfall to $7.25
- Applying Illinois or Michigan rates to Indiana employees, or vice versa, for remote staff
- Assuming a city rate exists; Indiana preempts local minimum wages
- Treating a salaried employee as exempt without meeting the duties test
Minimum Wage for Minors in Indiana
Indiana does not set a separate minimum wage for minors. Employees aged 14 to 17 are entitled to the same $7.25 as adults, and the only lower figure available is the $4.25 training wage, which depends on age under 20 and the 90-day window rather than minor status. What does differ for minors is hours: Indiana's child labor law, enforced by the Indiana Department of Labor's Youth Employment division, limits daily and weekly hours and late-night work for 14 and 15 year olds and, in narrower ways, for 16 and 17 year olds, and it requires employers of minors to register through the state's youth employment system. Employers that hire students for summer or after-school shifts should pair the $7.25 rate with a schedule that respects those hour limits, and keep time records that show start and end times for every shift so the hour caps can be verified.
Frequently Asked Questions
What is the minimum wage in Indiana in 2026?
$7.25 per hour, the same as the federal minimum wage.
Is Indiana raising its minimum wage in 2027?
No increase is scheduled. Indiana does not index its rate, and recent bills to raise it have not passed.
What is the tipped minimum wage in Indiana?
$2.13 per hour in cash wages, with tips making up the remaining $5.12 to reach $7.25.
Does Indiana have a training wage?
Yes. Employers may pay workers under 20 a rate of $4.25 per hour for their first 90 consecutive days of employment.
Can Indianapolis set its own minimum wage?
No. Indiana law prohibits local governments from setting a minimum wage higher than the state rate.
Which employers does the Indiana Minimum Wage Law cover?
Employers with two or more employees that are not covered by the federal Fair Labor Standards Act. Most employers are covered by the federal law at the same rate.
When does overtime start in Indiana?
After 40 hours in a workweek, at 1.5 times the regular rate. There is no daily overtime rule.
How much does a full-time minimum wage worker earn in Indiana per year?
$15,080 before taxes, based on 2,080 hours at $7.25 per hour.