8-iron tee height.
Flush or ¼ inch. Most golfers go flush.
The short answer
Flush with the mat, or ¼ inch (6.4 mm) ball-bottom at the very most. Most golfers should play it flush.
Where the crossover happens
Somewhere around the 8-iron the argument for a tee runs out. The club is short enough and lofted enough that you should be striking sharply down on the ball, and the shorter the club the further forward the low point of the arc sits relative to the ball. A tee that helped a 5-iron starts working against an 8-iron, because it moves the ball up into a part of the arc where the club is still travelling downward steeply.
If you do use one
Keep it at a quarter inch and treat it as protection rather than assistance. The one thing a small tee still buys you on a mat is insurance against the worst fat strike, where the sole hits the rubber underlayer and bounces into the ball. That bounce is the mat lying to you about your contact. A tee does not fix the strike, but it stops the mat from rewarding it.
Why flush is usually better here
Short irons are the clubs where strike quality matters most to distance control. A 20-yard miss with a driver is a bad drive. A 10-yard miss with an 8-iron is a missed green. If you want the number you see on the screen to be the number you can hit on the course, the lie on the mat has to resemble the lie on the fairway, and on the fairway there is no tee.
Spin is the thing you lose
Teeing a short iron up costs you spin. The club catches the ball slightly higher on the face and slightly more upward in the arc, so you launch higher with less spin. The flight looks fine and stops badly. If your indoor 8-iron numbers show high launch with low spin, check the tee before you change anything in your swing.
Read next
By the 9-iron there is no case for a tee at all, and wedges should always be played off the deck.
Should you tee up an 8-iron?
Usually no. Play it flush with the mat. A quarter inch is acceptable if you want insurance against a fat strike, but nothing higher.
Why does teeing a short iron up reduce spin?
The ball sits higher in the swing arc, so the club arrives with more dynamic loft and less downward compression. Launch rises and spin falls, which hurts distance control.