Indiana minimum wage and tip laws (2026)

Indiana does not set its own minimum wage above the federal rate, so the federal minimum of $7.25 an hour applies.

Minimum wage

$7.25

For a 40-hour week

$290.00

Source: 29 U.S.C. 206(a)(1) Read the rule

Employers in Indiana can pay tipped workers a cash wage as low as $2.13 an hour and count up to $5.12 an hour of tips toward the $7.25 minimum. That is called a tip credit. Your cash wage plus the tips you keep must reach at least $7.25 for every hour in each workweek. If they do not, your employer has to make up the difference.

Tips can count toward the wage

Yes

Tipped cash wage

$2.13

Maximum tip credit

$5.12

Employer must tell you first

Yes

Source: 29 U.S.C. 203(m)(2)(A); 29 CFR 531.59 Read the rule

• Hours past 40 in a workweek are paid at 1.5 times your regular rate.

Overtime rate at minimum wage

$10.875

Overtime cash rate with a tip credit

$5.755

For tipped workers, overtime is figured on the full minimum wage, not the cash wage. At $7.25, that is $10.875 an hour, so with the full tip credit the overtime cash rate cannot be less than $5.755.

Source: 29 U.S.C. 207(a)(1); 29 CFR 778.107; Fact Sheet #15 (overtime for tipped employees is computed on the full minimum wage, not the cash wage) Read the rule

Indiana does not require meal or rest breaks for adult workers, and neither does federal law. If your employer does give short breaks of 5 to 20 minutes, federal law says those minutes are paid.

Source: 29 CFR 785.18 and 785.19 (federal law does not require breaks; short breaks that are given must be paid) Read the rule

Taxes and deductions you agreed to, like health insurance, are normal. These are the ones that cause trouble in restaurants and bars, and what Indiana allows:

Required uniforms

Only if pay stays above minimum

Register or cash shortages

Not allowed

Broken dishes or equipment

Not allowed

Card processing fee on card tips

Only if pay stays above minimum

Customers who walk out

Not allowed

"Only if pay stays above minimum" means the deduction cannot take your pay for the week below minimum wage. For a worker paid a tipped cash wage, that usually leaves no room for a uniform, shortage, breakage or walkout deduction. A card fee works differently: only the fee on the card tip itself, taken from that tip.

Source: Indiana Wage Assignment statute, IC 22-2-6-2 (deductions only under a signed, revocable written assignment for the listed purposes; IDOL: an employer may not fine an employee and deduct the fine from pay); IC 22-2-6-2(b) and IC 22-2-6-4 (uniform and equipment deductions allowed with written assignment, capped at the lesser of $2,500 per year or 5% of weekly disposable earnings and never below minimum wage) Read the rule

Managers and owners can share in the pool

No

Kitchen staff can share when a tip credit is taken

No

Kitchen staff can share when no tip credit is taken

Yes

In most states, an employer can require tipped staff to pool tips with others who serve customers, like bussers, runners and bartenders. Managers, supervisors and owners can never take a share. Under federal law, cooks and dishwashers can share only when the employer takes no tip credit, and some states do not allow it at all. The answers above show the rule in Indiana.

Source: 29 U.S.C. 203(m)(2)(B); 29 CFR 531.54 Read the rule

Under federal law, a mandatory service charge, like an automatic 20% on large parties, is not a tip. It belongs to the business unless it is paid out, and when it is paid to you it counts as wages. It cannot be used to cover the tip credit, and it should not be reported as tips on your stub. Some states give the charge to the staff when customers were not clearly told it is not a tip, so if a charge was presented as a gratuity, it is worth asking where it went.

Source: 29 CFR 531.55 (a compulsory service charge is not a tip) Read the rule

Indiana does not require paid sick leave statewide. Some employers offer it anyway, and in a few places a city or county law requires it.

Source: No federal paid sick leave requirement for private employers.

Some parts of Indiana law depend on things a pay stub does not show. A TruWage result for Indiana can be off if any of these apply to you:

• If money was taken from your pay for a uniform without a written wage assignment you signed, it is unlawful in Indiana even if it left you above minimum wage, which is all this check tests.

Start with your manager or payroll and show them the numbers. Many mistakes get fixed that way. If it is not fixed, you can file a wage claim. It is free and you do not need a lawyer.

Agency

Indiana Department of Labor, Wage and Hour Division

Phone

(317) 232-2655

Takes wage claims between $30 and $6,000 (larger claims go to a private attorney). Workers who were involuntarily separated must file with IDOL before suing. Minimum wage and overtime for FLSA-covered employers are enforced by the federal Wage and Hour Division, Indianapolis District Office (317) 226-6801.

How to file a wage claim