Taxes must be withheld on all payments to employees that are subject to federal withholding, including wages, salaries, fees, commissions, tips, and bonuses.
Casual laborers, some domestic employees, ministers, and those who receive pension annuities may choose not to have tax withheld from their earnings. However, their income is still subject to state and county tax.
Withholding rates. Departmental Notice #1
explains how to withhold taxes on employees. The county tax rate will depend on where the employee resided as of January 1. If an employee resides out of state on January 1 but has his or her principal place of work or business in an Indiana county, the withholding agent should withhold for ...