Indianapolis
Marion County's local income tax rate is 2.02% (county code 49) in the Indiana Department of Revenue's Departmental Notice #1, with rates effective October 1, 2026. Employers withhold county tax based on each employee's Indiana county of residence on January 1, so a crew member who lived in another Indiana county that day is withheld at that county's rate. Indiana generally doesn't tax services, and residential and commercial cleaning are inferred to fall outside sales tax under that general rule, since no Department of Revenue source names house or janitorial cleaning.
In Indianapolis, the local income tax withheld from payroll is a county tax, and it follows each employee's county of residence on January 1. This page covers the 2.02% rate and who it applies to, Indiana's sales tax position on cleaning, the state wage, and what it means for your books. State payroll registration and the employee test are on my Indiana page.
Departmental Notice #1 (R47 / 10-26) lists Marion County, code 49, at 0.0202, or 2.02%, with rates effective October 1, 2026. Employers withhold county tax based on the employee's Indiana county of residence on January 1. An employee who lives out of state on January 1 but has a principal place of work or business in an Indiana county is taxed at that county's rate. The notice lists one rate per county. This page doesn't cover whether the City of Indianapolis has a separate payroll tax or business license.
Indiana generally doesn't tax service transactions, according to Sales Tax Information Bulletin 26, and residential and commercial cleaning are read as not taxable under that general rule. That's an inference: no Department of Revenue source naming house cleaning or janitorial cleaning was found, and the residential answer also draws on Bulletin 21's pool cleaning example. Where property is transferred along with a service, the Department looks to the true object of the transaction (Bulletin 21). More is on my Indiana sales tax page.
This page doesn't cover an Indianapolis minimum wage. Indiana's rate is $7.25 an hour on the U.S. Department of Labor's state table.
Source: U.S. Department of Labor, Wage and Hour Division, State Minimum Wage Laws (2026-07-01)
County tax withheld goes to its own liability account, apart from Indiana state withholding. The county on each employee record drives the rate, and because it's set by where the person lived on January 1, it gets checked at the start of every year. I want every single county withholding total to tie back to the employee records and the notice rate behind it, so a crew member who moved shows up before the first pay run of the year, not at year end. Cleaning revenue carries no Indiana sales tax under the general rule, and labor is recorded at the wage actually paid, as my payroll page explains.
I'm a bookkeeper, not a CPA or an Enrolled Agent. I keep county withholding recorded and separate; which county applies to an employee, and how each return gets filed, are questions for your CPA.
Rules checked against the sources above as of October 20, 2026. Rates and rules change; confirm current figures with the agency or your CPA.
About Figure Eight Financial
Figure Eight Financial is Dave Gordon’s bookkeeping practice for residential and commercial cleaning companies. I work with owners in Indianapolis and across the country, and I’m a Certified QuickBooks Online ProAdvisor.
Before bookkeeping I studied computer science at Penn State and spent a career at IBM as an engineer, so I build the books as a system: data comes in once, lands in the right place, and ties back to a statement. I’m a bookkeeper, not a CPA or Enrolled Agent. I keep the books your CPA works from, and the tax decisions stay with your CPA.
Credentials and memberships reported by Figure Eight Financial.
More about DaveHow I Help
With county tax set by where each employee lived on January 1, the county on every employee record matters as much as the hours. County withholding sits in its own liability account until it's paid. Book a short call below and tell me how your Indianapolis payroll is set up.
The core service. Transactions recorded and categorized, every account reconciled so the books and the bank agree, and monthly reports that arrive explained, split by residential and commercial and sliceable per contract.
The full picture of how this works for a cleaning companyFor the months where nothing got entered at all. I fill in the missing periods from the ground up, pulling bank feeds, statements, and receipts until every month has a complete set of records.
How catch-up bookkeeping worksFor books that exist but can’t be trusted. I audit what’s there, fix the unreconciled accounts, duplicate transactions, and wrong categories, and tie every balance back to a statement.
How cleanup bookkeeping worksYour crews paid on time, every pay period, with each payroll run recorded in the books so labor shows up against the jobs it belongs to.
How payroll worksRecurring invoices that match your contracts, an aging report you can trust, and follow-up on slow payers handled by a process instead of your evenings. Built for net-60 commercial accounts.
How invoicing and receivables workA file built right for a cleaning company from day one, or rebuilt after the DIY version drifts, and then I teach you to run it. I’m a Certified QuickBooks Online ProAdvisor, and this is honestly my favorite part of the job.
How a proper setup worksWe start with a short call about your business and where the books stand. The first conversation doesn’t cost anything.
I take a look at what you’ve got, your QuickBooks file, your spreadsheet, whatever exists.
You get a written proposal with the price, so the decision is yours with the number in hand.
Let's Connect
Running crews in Indianapolis who live in more than one county? Tell me how payroll tracks it now. The first conversation doesn't cost anything.
