Involuntary and Voluntary Pay Deductions: Indiana

Federal law and guidance on this subject should be reviewed together with this section.

Authors: Stuart R. Buttrick and Tareen Zafrullah, Faegre Drinker Biddle & Reath LLP

Summary

• An employer must begin withholding for child support no later than the first payday that occurs after 14 days following receipt of an income withholding order. Special rules apply to interstate income withholding orders. Child support cannot exceed a certain percentage of disposable earnings. Employers are permitted to withhold an administrative processing fee. Certain employers must remit withheld amounts by electronic funds transfer. See Child Support Withholding.
• Indiana limits the amount of disposable earnings that is subject to creditor garnishment. Employers are permitted to withhold an administrative processing fee. See Creditor Garnishment Withholding.
• Voluntary wage assignments are permitted in Indiana only in limited circumstances. To be valid, an assignment of wages must fall into one of the statutorily permitted categories. Employer consent is required. See Voluntary Wage Assignments.
• State and local tax authorities may impose tax levies against an employee's wages to collect unpaid taxes. Employers must withhold as required by a tax levy. Certain withholding limits apply. Employers may deduct an administrative processing fee. See Tax Levies.