Indiana Salary Paycheck Calculator
Are you interested in understanding your take-home pay in Indiana? Our Indiana Salary Paycheck Calculator provides a precise estimate of your net income after deductions. Whether you’re a current resident or considering relocating to the Bay State, knowing how your paycheck is distributed can help you manage your finances effectively
Gross To Net Calculator
The amount that remains after these deductions are considered your net pay.
Indiana Taxes: What You Need to Know (2026)
Indiana’s tax system includes federal, state, and local tax obligations. Indiana uses a flat state income tax rate. The state income tax rate for 2026 is 2.95%, down from 3.05% in 2024 and 3.0% in 2025. Residents may also owe local income taxes depending on their county.
Source: Indiana DOR – Rates, Fees & Penalties
Federal, State, and Local Tax Withholding
- Federal Tax: Based on your income bracket, ranging from 10% to 37%.
- State Tax: Indiana’s flat income tax rate for 2026 is 2.95%. It is scheduled to decrease to 2.90% in 2027.
- Local Tax: Many counties in Indiana levy local income taxes. Rates vary by county and are updated in January and October each year. For 2026 county-specific rates, see Departmental Notice #1.
Sources:
- Indiana DOR – Rates, Fees & Penalties
- Indiana DOR – Departmental Notice #1 (County Tax Rates, effective Jan. 1, 2026)
FICA and State Insurance Taxes
- FICA Taxes: Social Security tax (6.2%) and Medicare tax (1.45%), totaling 7.65% of your income.
- State Insurance Taxes: These include unemployment insurance and workers’ compensation. Rates vary by employer and state regulations.
Pre-Tax Deductions
- Medical Insurance: Premiums for employer-sponsored health plans are typically deducted pre-tax.
- 401(k) Contributions: Contributions to a 401(k) retirement plan are deducted pre-tax, reducing taxable income.
Tax Percentage Information Table (2026)
| Tax Type | Rate |
|---|---|
| Federal Income Tax | 10% to 37% |
| State Income Tax | 2.95% (2026) |
| Local Income Tax | Varies by county |
| Social Security Tax | 6.2% |
| Medicare Tax | 1.45% |
| Medical Insurance | Varies (Pre-Tax) |
| 401(k) Contributions | Varies (Pre-Tax) |
Income Tax
Indiana uses a flat income tax rate. The rate for 2026 is 2.95%. It will decrease to 2.90% in 2027.
Source: Indiana DOR – Rates, Fees & Penalties
Sales Tax
Indiana’s state sales tax rate is 7%. This applies to most goods and services. Groceries and prescription medications are exempt. Starting July 1, 2025, Indiana expanded the sales tax to apply to accommodations and certain enumerated services.
Source: Indiana DOR – Tax Chapter (2025 Filing Year)
Property Tax
Indiana property taxes are based on the assessed value of your property. Indiana caps property taxes at:
- 1% of assessed value for owner-occupied residences
- 2% for rental properties
- 3% for business properties
For 2026, the Business Personal Property Exemption threshold increased from $80,000 to $2,000,000. This means more small businesses are now exempt from business personal property tax.
Source: Indiana DLGF – 2026 Certified Tax Rates by District
Corporate Tax
Indiana’s corporate Adjusted Gross Income (AGI) tax rate is 4.9% as of 2026. This rate is unchanged from 2024.
Source: Indiana DOR – IT-20S S Corporation Income Tax Booklet
Other Taxes
- Gasoline Tax: Indiana imposes a Gasoline Use Tax calculated monthly at 7% of the statewide average retail price per gallon. The rate changes each month. Note: Governor Mike Braun suspended collection of the Gas Use Tax and Gasoline Excise Tax from April 8 through June 7, 2026, to provide relief at the pump.
- Cigarette Tax: The cigarette tax increased significantly. It now stands at $2.995 per pack, up from $0.995 per pack previously. The Class B cigarette tax rate is $3.98 per pack.
Sources:
Tax Credits and Deductions
Indiana offers tax credits and deductions including:
- College tuition credit
- Adoption expenses credit
- Contributions to Indiana’s CollegeChoice 529 education savings plan
- Deductions for elderly or blind residents
- Military service member deductions
- Renter’s deduction
Starting in 2026, taxpayers who qualify for the Unified Tax Credit for the Elderly can file Form SC-40 electronically through INTIME.
Source: Indiana DOR – Tax Chapter (2025 Filing Year)
Median Household Income in Indiana
According to the U.S. Census Bureau’s Small Area Income and Poverty Estimates (SAIPE), Indiana’s median household income for 2024 was $71,958. The Census Bureau’s American Community Survey (ACS) 1-year estimate for 2024 puts it at $71,959.
Source: U.S. Census Bureau via FRED – Estimate of Median Household Income for Indiana
Indiana Tax Brackets 2026
Indiana uses a flat income tax rate. The 2026 rate is 2.95% for all filers. County income taxes vary and are updated by the Indiana DOR.
| Filing Status | Tax Rate (2026) | County Income Tax |
|---|---|---|
| Single | 2.95% | Varies by county |
| Married (Joint) | 2.95% | Varies by county |
County rates are updated in January and October. Always check the current Departmental Notice #1 for your county’s rate.
- Personal Exemption: $1,000 per qualifying filer and dependent
- Additional deductions available for college tuition, adoption, and Indiana’s CollegeChoice 529 plan
Sources:
Income Limits for Indiana Earned Income Credit (IN-EIC)
To qualify for the Indiana EIC, taxpayers must have claimed the federal Earned Income Credit. Income limits are based on the number of qualifying children.
Note: Indiana’s EIC calculation follows federal EIC rules as of January 1, 2023. The specific income thresholds and maximum credit amounts are tied to federal figures and updated annually. For 2026 filing, refer to Schedule IN-EIC and the IT-40 instruction booklet published by Indiana DOR.
| Number of Qualifying Children | Income Limit |
|---|---|
| No Children | Refer to current IT-40 booklet |
| One Child | Refer to current IT-40 booklet |
| Two or More Children | Refer to current IT-40 booklet |
Additional criteria:
- Taxpayers must be between 25 and 65 years old (federal requirement)
- Qualifying dependents must meet federal age and residency requirements
Sources:
Wrapping Up
Indiana is another flat tax state, and the rate has actually been ticking downward, sitting at 2.95% for 2026 and scheduled to drop again to 2.90% in 2027. One thing to keep in mind is that many counties layer on their own local income taxes on top of the state rate, so your total withholding depends on where you live. On the bright side, property taxes are capped, and the state offers a solid range of credits and deductions for things like college savings, adoption, and military service.
Table of Contents
- Indiana Taxes: What You Need to Know (2026)
- Federal, State, and Local Tax Withholding
- FICA and State Insurance Taxes
- Pre-Tax Deductions
- Tax Percentage Information Table (2026)
- Income Tax
- Sales Tax
- Property Tax
- Corporate Tax
- Tax Credits and Deductions
- Median Household Income in Indiana
- Indiana Tax Brackets 2026
- Wrapping Up
Frequently Asked Questions
Yes, the Indiana Paycheck Calculator does account for local taxes. Indiana has county income taxes that vary by county, ranging from 0.5% to 3.38%. You can input your county of residence to ensure accurate calculations.
Indiana offers several state-specific deductions and credits, including:
- College Tuition Credit: For tuition paid to Indiana colleges.
- Adoption Credit: For expenses related to adopting a child.
- 529 College Savings Plan Credit: For contributions to Indiana’s CollegeChoice 529 plan.
- Deductions for Elderly or Blind Residents: Additional deductions for qualifying individuals.
Yes, KEKAeka Indiana Paycheck Calculator is updated for the latest tax laws for 2024. It incorporates the most recent federal, state, and local tax rate changes for accurate calculations.
Indiana’s state tax system is simpler, with a flat income tax rate of 3.05%. In contrast, federal taxes are progressive, with rates increasing as income increases. Federal tax deductions can significantly reduce taxable income, while Indiana offers specific credits and deductions to lower your state tax liability.
You can enter the combined income from all sources into the calculator to account for multiple jobs or additional income sources. Adjust the withholding allowances and additional withholdings to reflect your total income accurately. For a more streamlined experience, consider using Keka’s payroll softwarecalculator, which can handle multiple income sources and provide detailed breakdowns.
Pre-tax deductions such as health insurance premiums or retirement contributions should be entered into the Indiana Paycheck Calculator. These deductions reduce your taxable income, resulting in lower tax liability. Keka’s payroll software can automatically account for these pre-tax deductions, ensuring accurate net pay calculations.
When filing jointly with your spouse, select the “Married Filing Jointly” status in the Indiana Paycheck Calculator. This will adjust the tax brackets and standard deductions accordingly. Keka’s payroll software can also accommodate joint filings, making managing your household’s finances more manageable.
