Indiana payroll setup for your first hire

Indiana takes state income tax and county tax from paychecks. Those accounts sit with DOR, not DWD.

Indiana takes state income tax from paychecks. It also takes county tax. This is not Texas, Florida, Washington, or Tennessee. Those states do not take state income tax from paychecks. A federal Employee’s Withholding Certificate (Form W-4) is not the Indiana certificate.

DOR is the Indiana Department of Revenue, the income-tax office. DOR’s withholding page says you collect state and county taxes from employees’ wages. Register a new withholding account on INBiz, Indiana’s business-registration portal. If the shop already has a DOR file, add the withholding tax type in INTIME. INTIME is the Indiana Taxpayer Information Management Engine, DOR’s e-services portal at intime.dor.in.gov. A DWD unemployment login is not a DOR withholding number. A payroll login is not either account.

DOR’s business FAQ says that if you must withhold federal taxes, you must also withhold Indiana state and county taxes. Employees complete the Employee’s Withholding Exemption and County Status Certificate (Form WH-4). That form names the county of residence and the county of principal employment as of January 1. County rates sit in Departmental Notice #1, which lists Indiana’s 92 counties. Keep the signed WH-4. Do not send it to DOR unless DOR asks.

File the periodic withholding return (Form WH-1) and the Annual Withholding Reconciliation Form (Form WH-3). DOR’s FAQ says all businesses must file and pay withholding electronically. Paper filing needs an approved Business Exemption Application (Form BT-EX). If you once registered to file withholding, you still file WH-1 and WH-3 even when no tax is due. Late WH-1 returns draw a penalty of up to 20%, and a $5 minimum. Late WH-3s draw $10 per withholding document. INBiz can start the DOR file. It does not open the DWD unemployment account.

When you owe unemployment: $1 in covered wages

DWD collects state unemployment tax. That tax is often called SUTA, state unemployment tax, or SUI, state unemployment insurance. DWD’s Employer Self Service FAQ is the regular-shop test. If you have paid $1 or more to a worker performing covered services in Indiana, register to obtain a State Unemployment Tax Account (SUTA) number. DWD’s Employer Guide restates that $1 test for a regular business under IC 22-4-7-1. Agricultural, 501(c)(3) nonprofit, and domestic shops use other tests. This scorecard is the regular-business path.

This is not California’s $100-in-a-quarter test. There is no 15-day California clock on the DWD page. Do not copy that clock onto Indiana. This is not Tennessee’s $1,500-in-a-quarter or 20-week test. Do not copy that test onto Indiana. Massachusetts uses 13 weeks. Do not copy a 13-week clock onto Indiana. Indiana does take state paycheck withholding. Do not treat Indiana like a no-withholding state.

The FAQ names the taxable wage base as the first $9,500 of subject wages a worker earns from that employer in the calendar year. Subject wages are gross wages less excluded wages. Confirm that base on the live DWD FAQ and the Employer Guide. DWD does not register a shop in anticipation of liability. Do not open the unemployment file before you have paid a covered worker in Indiana.

Register unemployment on Employer Self Service. Electronic wage filing is mandatory unless DWD grants a waiver.

Every liable shop completes an online registration so DWD can assign a SUTA number. Employer Self Service, also called ESS or Uplink, is that door. The FAQ says a new shop that has paid $1 or more registers via ESS. You will need the federal Employer Identification Number, called FEIN, the legal name, the NAICS code, and the mailing address. NAICS is the North American Industry Classification System. You also need the Indiana work location, the date the first payroll was paid, and the Social Security number, employer identification number, or individual taxpayer identification number of the responsible party. Click New User. Use a valid email. There is no 15-day California clock on that page. File when the facts show you have paid $1.

If DWD finds you liable, it assigns a SUTA number. Hold that number. Use it on reports and payments. Do not substitute a federal EIN. After the account exists, file the quarterly wage and employment report in Employer Self Service. The FAQ sets those due dates as April 30, July 31, October 31, and January 31. Electronic filing and payment are mandatory unless DWD has granted an electronic-reporting waiver. The Employer Guide cites 646 IAC 5-2-2 for that waiver. A quarterly wage report is not the new-hire report.

DWD’s new-employer premium-rate page says most new employers keep 2.5% for the first four calendar years. Construction, government, and successor shops use other rates. Rates are set as of June 30 for the next calendar year. Use the rate on your DWD notice, not a number from a software page. Paper shops that cannot use ESS may file State Form 2837, the SUTA Account Number Application and Disclosure Statement. The live start is ESS.

New hire is a 20-day Indiana New Hire Reporting Center report. Employer Self Service does not take it.

The new-hire report is a list of who you just hired. It is not a box on the DWD wage report. DWD’s new-hire page requires an electronic report within 20 days of the hire or rehire date. File with the Indiana New Hire Reporting Center at www.in-newhire.com. The page cites IC 22-4-10-8 and 42 U.S.C. § 653a. A quarterly ESS wage report does not satisfy that clock. This is not Massachusetts’s 14-day Department of Revenue report.

DWD’s page names extra data elements. Those include the employee’s current job title, the primary Standard Occupational Classification code, called SOC, starting compensation, the rate of pay, date of birth, and medical-insurance eligibility. Failure to report can draw $25 per unreported employee, or up to $500 if the failure was part of a conspiracy between the employer and the employee. The payroll service can send the file. The clock still sits on you.

Workplace injury insurance is due when the first employee starts. The Board does not sell the policy.

This is a first-hire policy for ordinary shops. It is not Florida’s four-employee wait. It is not Tennessee’s five-employee wait. It is not the three-employee test used in Georgia, North Carolina, or Virginia. It is not Texas optional coverage. It is not Washington’s exclusive state fund. It is not Ohio’s Bureau of Workers’ Compensation monopoly. Indiana calls this worker’s compensation.

The Worker’s Compensation Board of Indiana compliance page prints IC 22-3-5-1. Every employer under IC 22-3-2 through IC 22-3-6, except those exempted by IC 22-3-2-5, must insure that liability with an authorized carrier, or qualify as self-insured with the Board. The statute page lists a $500 initial self-insurance fee and a $250 renewal fee. Ordinary first-hire shops buy a private policy. WCB is the Worker’s Compensation Board of Indiana, the office for that coverage. WCB does not sell that policy. The Board’s employer page points shops to the Indiana Compensation Rating Bureau for carrier information. A payroll login is not a policy.

Patriot’s registration article says you can sign up through a private provider or a state-operated fund. That state-fund line is what the software page says. The Board’s ordinary path is an authorized private carrier or self-insurance with the Board. Do not treat Indiana like Washington or Ohio on that point.

How Gusto and Patriot describe Indiana

Confirm the live withholding number on INTIME. Confirm the unemployment account and rate on Employer Self Service and on the DWD rate notice. Confirm workplace injury insurance with a licensed carrier or on the Worker’s Compensation Board of Indiana employer pages.

Gusto’s Indiana help article says Middesk (Gusto’s business-verification company) may register state income-tax withholding and state unemployment insurance (SUI). It names DOR for withholding and DWD for unemployment tax. It tells you INBiz can start the DOR file. It then sends unemployment registration to DWD. Confirm the live SUTA number on Employer Self Service. Confirm the 10-digit Taxpayer ID and the 3-digit location code on INTIME. The same article says most shops become liable for Indiana unemployment tax after paying one Indiana employee at least $1.00. It names Form WH-4 for state and county withholding. It lists Form WH-1 and Form WH-3 among Indiana files. Confirm the live numbers on INTIME and Employer Self Service. Confirm the rate on the DWD notice. Read Gusto’s Indiana article. See Gusto on the directory.

Patriot’s tax table says Full Service files Indiana Unemployment Insurance (SUI or SUTA) on the quarterly SUTA report. It files Indiana income-tax withholding on Form WH-1 and the annual Form WH-3. It puts county tax on that same WH-1. Patriot’s registration article puts a “Register With Indiana Department of Revenue” header over an Access Indiana account. That header is agency-confused. DOR’s live start for a new shop is INBiz. An existing shop adds withholding in INTIME. The article then tells you to open unemployment on the Employer Self-Service tool, Uplink. It does not claim Patriot opens those accounts. The same article prints a 2.5% new-employer SUTA rate for 2026. DWD also prints 2.5% on its new-employer premium-rate page. Use the rate on your DWD notice, not a number from a software page. The article also says workplace injury insurance can come from a private provider or a state-operated fund. The Board’s ordinary path is not a Washington-style state fund. Read Patriot’s article and Patriot’s registration article. See Patriot on the directory.

What still sits on the employer

• Decide that the $1 covered-wage test has been met. Agricultural, 501(c)(3), domestic, and successor shops use other tests.
• Complete INBiz or INTIME so DOR can open state and county withholding. Complete Employer Self Service so DWD can open unemployment.
• Hold the DWD SUTA number. Do not substitute a federal EIN for that number.
• Enter the premium rate from the DWD notice, not a marketing figure. DWD prints 2.5% as the current new-employer rate for most shops. Confirm the live notice.
• File the quarterly wage and employment report in Employer Self Service after liability begins. Electronic filing is mandatory unless DWD grants a waiver.
• Register withholding on INBiz or INTIME. Collect Form W-4 and Form WH-4. A federal W-4 is not the Indiana certificate. File Form WH-1 and Form WH-3 electronically.
• File the Indiana new-hire report with the Indiana New Hire Reporting Center within 20 days of hire or rehire. A quarterly ESS wage report does not satisfy that clock.
• Buy workplace injury insurance when the first employee starts. The Worker’s Compensation Board of Indiana does not sell that policy. Payroll software does not issue that policy.
• Do not copy another state’s clock onto Indiana. Indiana does not use California’s $100-quarter test. Indiana does not use Tennessee’s $1,500-quarter or 20-week unemployment test. Indiana does not skip state paycheck withholding the way Texas, Florida, Washington, or Tennessee do. Indiana does not use Florida’s four-employee workplace-injury wait. Indiana does not use Tennessee’s five-employee wait. Indiana does not use the three-employee wait used in Georgia, North Carolina, or Virginia. Indiana does not use Washington’s exclusive state fund. Indiana does not use Ohio’s Bureau of Workers’ Compensation monopoly.

Also forming a company in Indiana? Process Score compares registered agents there.