Indiana SUTA Tax Calculator
Figure basis: Official U.S. Department of Labor, Office of Unemployment InsuranceState Unemployment Tax Act (SUTA) tax is the state unemployment insurance tax that employers pay to fund unemployment benefits in Indiana. This calculator estimates your Indiana SUTA liability for the 2026 tax year. Enter the average annual wages per employee, your number of employees, and your assigned SUTA rate to see the taxable wages, tax per employee, and total tax. SUTA is charged only on the first $9,500 of each employee's wages (the 2026 Indiana taxable wage base); wages above that per employee are not taxed. Your rate is set by the state based on your business's unemployment claim history (your "experience rating"); a new employer pays 2.5%. SUTA is separate from the federal FUTA tax and, in most states, is paid entirely by the employer and never deducted from employee wages. All wage-base and rate figures are sourced from U.S. Department of Labor, Office of Unemployment Insurance and verified for 2026. Replace the default rate with the rate on your state tax-rate notice for an exact figure.
In Indiana, employers pay SUTA on the first $9,500 of each employee's wages for 2026, and a new employer pays 2.5%. For 5 employees earning $50,000 each at 2.5%, the estimated annual SUTA tax is $1,187.50 ($237.50 per employee).
How Indiana SUTA tax works
Indiana charges state unemployment tax on each employee's wages up to the taxable wage base of $9,500 for 2026. Once an employee has earned that much in the year, no further SUTA is due on that employee. Your rate is assigned by the state from your experience rating; a new employer pays 2.5%.
taxable wages per employee = min(annual wages, $9,500)
SUTA tax per employee = taxable wages per employee x rate / 100
total SUTA tax = SUTA tax per employee x number of employees
Worked example: 5 employees each earning $50,000 in Indiana at 2.5%. Each employee's taxable wages are capped at $9,500, so the tax per employee is $237.50 and the total is $1,187.50.
Indiana SUTA figures (2026)
| Figure | Value | Source |
|---|---|---|
| Taxable wage base | $9,500 | U.S. Department of Labor, Office of Unemployment Insurance |
| New employer rate | 2.5% | U.S. Department of Labor, Office of Unemployment Insurance |
| Experience rate range | 0.5% to 7.4% | U.S. Department of Labor, Office of Unemployment Insurance |
The experience-rate range shown is the base statutory range. Most states add mandatory assessments on top (for example a fund-building, solvency, or administrative surcharge), so an employer's effective rate can be higher than the range shown, and the new-employer rate may exclude those add-ons. Your exact assigned rate is on your annual state tax-rate notice.
Reading your Indiana rate notice
Indiana keeps one of the lower taxable wage bases in the country at $9,500, so the arithmetic that matters most is the per-employee ceiling. Every worker you pay stops generating SUTA once their year-to-date wages pass $9,500, which means a full-time employee earning $45,000 and a part-timer earning $12,000 cost you exactly the same state unemployment tax. At the flat new employer rate of 2.5%, that ceiling works out to a maximum of $237.50 per employee per year, no matter how large the salary behind it.
That flat rate is temporary. After a few years of filing, the Indiana Department of Workforce Development moves you onto an experience rate drawn from a schedule that currently runs from 0.5% to 7.4%. A clean claims record can drop your cost to as little as $47.50 per employee, while a history of layoffs can push it toward $703.00. The lever you control is the claims side: every former employee who draws benefits is charged against your account and feeds into next year's rate.
New Indiana employers should budget the 2.5% figure for the first full year, then read the annual Merit Rate notice closely. Replace the default rate in the calculator above with the exact percentage on that notice, including any schedule adjustment, to see your real liability rather than the new employer estimate.
Indiana SUTA tax: frequently asked questions
What is the Indiana unemployment (SUTA) taxable wage base for 2026?
For 2026, Indiana employers pay state unemployment tax on the first $9,500 of each employee's wages. Wages above $9,500 per employee are not subject to SUTA.
What is the Indiana new employer SUTA rate?
New employers in Indiana pay a SUTA rate of 2.5% until they have enough history to be experience-rated. On the $9,500 wage base that is up to $237.50 per employee per year.
How is Indiana SUTA tax calculated?
Multiply each employee's wages, capped at the $9,500 taxable wage base, by your assigned experience rate, then add up across employees. SUTA is primarily an employer-paid tax and is not deducted from employee pay.
Is the Indiana SUTA rate the same for every employer?
No. After the new-employer period, Indiana assigns each employer an experience rate based on its history of layoffs and claims, generally ranging from about 0.5% to 7.4% for experience-rated employers before any state add-on surcharges. The rate field above defaults to the new-employer rate; replace it with the rate on your state tax notice for an exact figure.
Official sources
- Indiana unemployment taxable wage base and rates (tax year 2026): U.S. Department of Labor, Office of Unemployment Insurance, as at Jul 15, 2026.
Reviewed by the CalculatorHub team, edited by James Graham, 15 July 2026. See our methodology. General information, not tax or legal advice.