Indiana's state rate of 2.95% is among the lowest in the country. It is also only part of what comes out of your paycheck, because every single one of Indiana's 92 counties levies an income tax of its own.
| Gross pay | — |
| Federal income tax | — |
| Social Security6.2% up to $184,500 | — |
| Medicare1.45%, no cap | — |
| State income tax | — |
| 401(k) contribution | — |
| Health and HSA | — |
Useful if you are comparing a job that pays monthly against one that pays every two weeks, or working out what a raise is worth per paycheck.
| Pay schedule | Gross | Take-home |
|---|
Most states that permit local income taxes have them in some places and not others. Indiana is different: all 92 counties levy a Local Income Tax, and the rates vary widely — from well under 1% in some counties to over 3% in others.
Your county tax is determined by where you lived on January 1 of the tax year, not where you work. Moving counties mid-year does not change your rate until the following year, which is a detail worth knowing before you sign a lease across a county line.
In a high-rate county the local tax can exceed the state tax. Someone in a county charging 3% pays more to the county than the 2.95% they pay to the state, which makes the combined burden closer to 6% — a very different proposition from the headline rate. This calculator shows the state portion only. Look up your county's current LIT rate and add it.
Indiana's flat rate dropped from 3% to 2.95% on 1 January 2026 under legislation passed in 2023, with a further reduction to 2.9% scheduled for 2027. Subsequent legislation set out a path toward 2.55% in staged increments from 2030, contingent on revenue triggers being met.
Unusually, county rates have generally not moved in the same direction, so the state's share of your income tax bill keeps shrinking relative to your county's.
Indiana offers no standard deduction. The allowance is a $1,000 base personal exemption, with an additional $1,500 available for each qualifying dependent — and $3,000 in the first tax year a child is claimed.
That first-year figure is a genuine oddity worth knowing about. Families frequently miss it because it appears only once, in the year the dependent is first claimed.
No, it shows the 2.95% state rate only. All 92 counties levy their own income tax, ranging from under 1% to over 3%, and in some counties that exceeds the state tax.
The county where you lived on January 1 of the tax year. A mid-year move does not change your rate until the following year.
Yes. It fell to 2.95% in 2026, drops to 2.9% in 2027, and legislation provides a path toward 2.55% from 2030 if revenue conditions are met.
In the first tax year you claim a child as a dependent, Indiana allows $3,000 rather than the usual $1,500. It applies once and is commonly missed.