Indiana Salary Calculator 2026 — Free Take-Home Pay Estimator

Indiana Income Tax Summary

Indiana has a flat income tax rate of 3.15% as of 2024, with scheduled reductions that may lower the rate further in future years. The state taxes most forms of income but offers a standard deduction. Indiana's income tax rate is among the lowest for states with a flat tax. The state also has a state sales tax and moderate property taxes. [Source: Indiana Department of Revenue, 2026]

Indiana Income Tax Rules

• Flat income tax rate of 3.15% on Indiana taxable income [Source: Indiana Department of Revenue, 2026]
• Standard deduction: determined based on federal filing status [Source: Indiana Department of Revenue, 2026]
• Personal exemption: $1,000 per exemption
• All income types are taxable: wages, salaries, tips, interest, dividends, capital gains
• Social Security benefits are not taxed at the state level
• Retirement income from pensions and IRA distributions is taxable
• County income tax also applies (separate from state rate)

Indiana Payroll & Withholding Rules

Employers must withhold Indiana income tax at a combined state and county rate. The state rate is 3.15%, and county rates vary from 0.5% to 3.38%. Unemployment insurance is employer-paid only. No other mandatory local taxes exist beyond county income taxes. [Source: Indiana Department of Revenue, 2026]

Local Taxes in Indiana

Most Indiana counties impose a county income tax ranging from 0.5% to 3.38% on wages. This tax is collected by the state and distributed to counties. Cities do not impose separate income taxes — the county tax covers local funding.

Cost of Living Context

Indiana's cost of living is about 10% below the national average. Housing is very affordable, especially outside of the Indianapolis metro area. Transportation, groceries, and utilities are below national averages. Major metro areas include Indianapolis, Fort Wayne, and Evansville. [Source: Indiana Department of Revenue, 2026]

Real-World Example: Indiana

For a single filer earning $55,000/year in Indianapolis, Indiana:

• Federal taxable income: ~$40,400 (after $14,600 standard deduction)
• Indiana state tax: ~$1,700 (using 2026 brackets)
• Estimated take-home: ~$4,058/month (pre-FICA, pre-insurance)

Note: Actual results vary based on deductions, credits, and local taxes.

Indiana FAQs

Q: What is the Indiana state income tax rate? [Source: Indiana Department of Revenue, 2026] A: Indiana has a flat state rate of 3.15% for 2024.

Q: Does Indiana tax Social Security benefits? A: No, Indiana does not tax Social Security retirement benefits.

Q: Does Indiana tax retirement income? A: Yes, pension and IRA distributions are taxable at the state rate plus applicable county rate.

Q: Does Indiana have a county income tax? A: Yes, most Indiana counties impose an additional income tax ranging from 0.5% to 3.38%.

Q: Does Indiana have a state sales tax? A: Yes, Indiana has a state sales tax rate of 7%. [Source: Indiana Department of Revenue, 2026]

Q: What is the standard deduction in Indiana? [Source: Indiana Department of Revenue, 2026] A: Indiana uses a standard deduction determined by your federal filing status. [Source: Indiana Department of Revenue, 2026]

Q: Are capital gains taxed in Indiana? A: Yes, capital gains are taxed as ordinary income at Indiana's flat rates.