Nanny Taxes in Indiana

Minimum Wage

Household employees must be paid at least the highest of the federal, state, or applicable local minimum wage rates. Indiana’s state minimum wage of $7.25/hour, which is the same as the federal rate, applies.

Overtime Pay Rules

Household employees in Indiana are required to be paid at least time and a half for hours worked over 40 in a seven-day workweek. Overtime pay is not required for live-in employees.

State Unemployment Tax & Rate

In Indiana, the new employer SUI (state unemployment insurance) rate is 2.50 percent on the first $9,500 of wages for each employee. Employers with previous employees may be subject to a different rate. This is an employer-only tax.

Workers’ Compensation Insurance

Household employers in Indiana are not required to have workers’ compensation coverage for any full- or part-time employees. However, you can choose a voluntary policy to protect both you and your employee. Get a quote on workers’ compensation insurance.

Disability Benefits Insurance

The state has no disability benefits rules related to nanny tax and payroll.

Domestic Workers’ Bill of Rights

The state has no domestic workers’ bill of rights.

Paid Leave Laws

The state has no paid leave regulations related to household employment.

Other State Regulations

Leave Law for Child Educational Activities

Employees can take unpaid leave for school conferences. The law took effect July 1, 2025, and expires on July 1, 2029.

Employees are eligible to take unpaid job-protected leave once per calendar year for each of the following types of school meetings for their biological child, adopted child, foster child or stepchild:

• Attendance conferences
• Case conference committee meetings to develop an individualized education plan (IEP) for a student with a disability.

Termination & Final Pay

Household employers in Indiana must pay terminated workers – and those who voluntarily quit – their final wages at the time of separation or no later than their next regularly scheduled payday. Unless a nanny contract or work agreement states otherwise, “wages” due after termination include accrued, but

Helpful Links for Nanny Taxes in Indiana

• Indiana Department of Labor
• Indiana Department of Financial Institutions

Federal Regulations

All household employers need to follow certain federal regulations, including:

Fair Labor Standards Act (FLSA) Classification Guidelines

• Household workers are considered employees and not independent contractors. Learn more about misclassifying employees as independent contractors.
• Household workers are also non-exempt employees, meaning they receive at least time-and-a-half for hours worked over 40 per workweek. Learn more about overtime pay.

FICA Taxes

Social Security and Medicare taxes are commonly referred to as FICA taxes.

If you pay cash wages of $3,000 or more to any household employee in 2026 (or paid a domestic worker $2,800 or more in 2025), you must withhold and pay FICA taxes. FICA taxes are 15.3 percent of cash wages.

As an employer, you pay 7.65 percent (6.2 percent for Social Security and 1.45 percent for Medicare).

Your employee's share is also 7.65 percent, which you may withhold from their wages or pay yourself.

You don't withhold or owe FICA taxes on wages you pay to your spouse, child under the age of 21, parent, or any employee under 18 at any time during the calendar year.

Federal Unemployment Tax (FUTA)

If you pay a household employee total cash wages of $1,000 or more in any calendar quarter, you'll owe federal unemployment tax. This is an employer-only tax. FUTA is 6% of cash wages on the first $7,000 of wages paid to an employee.

Mileage Reimbursement

If your employee uses their own car in the course of their work, you can reimburse them for mileage. For 2026, the IRS has set the optional standard mileage rate at 72.5 cents per mile driven. Paying mileage is not mandatory in most states, and you can reimburse your employee at a different rate. However, if mileage costs cause your employee to fall below the minimum wage, you must reimburse them for mileage.

Remitting Taxes Quarterly

Household employers can remit taxes, including FICA, employee income, and federal unemployment, quarterly using Form 1040-ES. If a household employer does not remit their taxes quarterly, the entire amount will be due when they file their personal tax return. This could cause an underpayment penalty.

Year-End Requirements

By January 31, household employers must provide Form W-2 to their employees and submit Form W-3 and Copy A of Form W-2 to the Social Security Administration. Then, a household employer must file Schedule H with their personal tax return. Learn more: How to File Schedule H