How your paycheck is taxed in Indiana
A Indiana paycheck is reduced by federal income tax, Social Security (6.2%), Medicare (1.45%), and a flat 2.95% state income tax. The federal side uses the 2026 standard deduction of $16,100 (single) or $32,200 (joint) and seven brackets from 10% to 37%. The state side is described below. Every Indiana county adds its own income tax, which can be larger than the state cut for many workers.
Indiana's table is based on the 2026 schedule and is marked estimated; see the notes below for what may differ in 2026.
Formula
Net pay = Gross pay - Pre-tax deductions - Federal income tax - Social Security - Medicare - Indiana income tax - After-tax deductions. Federal taxable income is gross minus pre-tax deductions minus the standard deduction. Indiana taxable income is wages minus the personal exemption.
Indiana income tax rate for 2026
| Item | Amount |
|---|---|
| Tax rate (all filing statuses) | 2.95% |
| Personal exemption, single | $1,000 |
| Personal exemption, married filing jointly | $2,000 |
Indiana's flat rate steps down each year under 2023 legislation: 3.05% (2024), 3.0% (2025), 2.95% (2026), 2.9% (2027). The 2026 figure is the scheduled rate and is marked estimated.
Local taxes in Indiana
All 92 Indiana counties levy a local income tax, from about 0.5% to 3%, based on the county where you live on January 1. Local taxes are not included in the estimate above; check your pay stub for a city or county line and subtract it from the net pay shown.
Worked examples: single filer, paid biweekly
Each row is a single filer with no pre-tax deductions, using the 2026 federal tables and the Indiana rules above. The $75,000 example: federal taxable income is $58,900 after the $16,100 standard deduction, giving $7,670.00 of federal tax (10% on the first $12,400, 12% up to $50,400, 22% on the rest). Social Security is 6.2% of $75,000 = $4,650.00, Medicare is 1.45% = $1,087.50, and Indiana tax on $74,000 of state taxable income is $2,183.00. Net pay is $59,409.50 a year, or $2,284.98 every two weeks.
| Salary | Federal tax | Social Security | Medicare | Indiana tax | Net per year | Net per paycheck |
|---|---|---|---|---|---|---|
| $50,000 | $3,820 | $3,100 | $725 | $1,446 | $40,910 | $1,573.44 |
| $75,000 | $7,670 | $4,650 | $1,088 | $2,183 | $59,410 | $2,284.98 |
| $100,000 | $13,170 | $6,200 | $1,450 | $2,921 | $76,260 | $2,933.06 |
Effective total tax rates in these examples run from 18.2% at $50,000 to 23.7% at $100,000. Married filers with the same household income pay less federal tax because the joint standard deduction and brackets are twice as wide.
How a flat tax changes with income
Because every dollar of taxable income is taxed at 2.95%, Indiana tax rises in a straight line once you are past the deduction and exemption. In the examples above it is $1,446 at $50,000 (2.89% of gross), $2,183 at $75,000 (2.91%), and $2,921 at $100,000 (2.92%). The federal side is what makes the total effective rate climb faster than that, since federal brackets step from 12% to 22% at $50,400 of taxable income and to 24% at $105,700.
Hourly pay in Indiana
Hourly workers are annualized the same way: rate x hours per week x 52. At $20 an hour for 40 hours, gross pay is $41,600 a year or $800 a week. Federal income tax is $54.08 a week, Social Security $49.60, Medicare $11.60, and Indiana tax $23.03, leaving $661.69 per weekly paycheck. Overtime raises the annualized figure and can push a few dollars into the next federal bracket, but only those dollars are taxed at the higher rate.
Married filing jointly on $75,000
A married couple filing jointly with $75,000 of combined wages gets the $32,200 joint standard deduction and brackets twice as wide, so federal income tax falls to $4,640.00 from $7,670.00 for a single filer, and Indiana tax is $2,153.50 instead of $2,183.00. Social Security and Medicare do not change with filing status. Take-home pay for the couple is $62,469.00 a year, or $2,402.65 per biweekly paycheck.
Estimates for 2026 using federal and state tables; local taxes, benefits, and credits vary. Not tax advice. Compare other states on the national paycheck calculator.