Guide

Do I need workers' comp for one employee in Indiana?

· Last updated Nov 2026 · Figures are estimates, not tax or insurance advice.

Short answer: if you are hiring a W-2 employee to work in your trade business, you should plan on buying a workers' compensation policy before that person starts. Indiana does not use a “five-employee” threshold the way some states do. The official materials below are written around coverage starting with the job, not around a headcount minimum.

What the statute and the Board say

The Indiana Worker's Compensation Board compliance page quotes IC 22-3-5-1: every employer under IC 22-3-2 through IC 22-3-6, except those exempted by IC 22-3-2-5, shall either keep insurance in force with a company authorized to write workers' compensation in Indiana, or furnish the Board with satisfactory proof of the employer's ability to pay benefits directly (self-insurance). Self-insurance has its own application fees and is not a realistic path for a one-person shop hiring a helper.

The Board's Who Is Eligible page puts the same idea in plain language: “The law requires most businesses to have worker's compensation insurance.” On the question “How long do I have to work to be covered?” the Board answers, “You are covered from the first day you are on the job.” That is why a first hire is the moment to get a policy, not something to put off until the crew grows.

There are exemptions and special processes. IC 22-3-2-5 is the exemption cross-reference in IC 22-3-5-1; read the current statute rather than assuming you are exempt. Independent contractors who are not required to carry coverage may need a Worker's Compensation Exemption Clearance Certificate from the Indiana Department of Revenue (Form WCE-1, with a $20 application fee described on DOR's page) and a certificate filed with the Board under IC 22-3-2-14.5. Calling someone a contractor does not, by itself, remove the need for coverage if the person is legally an employee. See our 1099 vs W-2 guide and, if needed, an attorney.

What it might cost — and what we will not invent

Premiums are usually quoted per $100 of payroll and vary by classification code, carrier, claims history, and credits. We are not a rating bureau and will not invent a nationwide price. For Indiana only, we can point to the official ICRB advisory rates effective January 1, 2026:

• Plumbing, class 5183: $0.924 per $100 of payroll, minimum premium $451 (loss cost $0.679).
• Electrical wiring within buildings, class 5190: $0.901, minimum $444 (loss cost $0.662).
• HVAC installation, service, and repair, class 5537: $1.236, minimum $549 (loss cost $0.908).
• Landscape gardening, class 0042: $2.097, minimum $821 (loss cost $1.541).
• Buildings — operation by contractors, class 9014 (often used for contract janitorial work): $1.203, minimum $539 (loss cost $0.884).

These are advisory rates. A carrier may start from the loss cost and apply its own multiplier, or deviate from the advisory rate, and then apply an experience modifier and other charges. A first-year policy for a small payroll can land on the minimum premium rather than the raw rate times payroll. In the calculator example of a $20-an-hour, 40-hour plumber ($41,600 of wages), the 5183 advisory rate produces $384.38, so the $451 minimum is used instead.

If you work in another state, or your class code is different, get a quote. Do not copy an Indiana advisory rate onto a policy in a different state.

Practical next steps

Ask an Indiana-licensed agent for a quote in the correct class, keep proof of coverage, and post any notice the Act requires (the Board can assess penalties for failing to post a required notice under IC 22-3-2-22). Report workplace injuries on the Board's timeline: the compliance page notes that an employer must report an injury causing death or care beyond first aid within seven days of knowledge.

Official starting points: the Worker's Compensation Board, compliance, and DOR's exemption clearance page. After you have a policy, set up payroll so wages and premiums stay in sync. Partner links, if you want a payroll provider that also discusses workers' comp: Gusto or Paychex. For payroll setup after you have a policy, see how to run payroll for one employee.

This page summarizes published Board and statutory material. It is not a coverage determination. If you are unsure whether your helper is an employee or whether an exemption applies, ask the Board or a licensed Indiana attorney before the first day of work.