Calculate your net paycheck in Indiana after federal taxes, the 2.95% top state income tax rate, and FICA deductions. Formula shown, sources cited β no account required.
The state applies a flat income tax rate of 2.95% to all taxable income β the second-lowest flat rate in the country and one of the simplest structures to plan around. For a household earning the median of $71,959, state income tax runs roughly $2,123 per year before local county taxes, which most Indiana counties layer on top at rates typically ranging from 0.5% to 2.9%. Combined local and state income tax for most residents lands somewhere between 3.5% and 5.5% of gross income, still low by national standards. Cost of living sits 9.3% below the national baseline β a cost-of-living index of 90.7 β which meaningfully stretches after-tax dollars. Groceries, housing, healthcare, and utilities all cost less than in most other states, making a mid-range salary go farther here than the nominal number suggests. The manufacturing and logistics sectors anchor a large share of employment, with healthcare and education growing steadily. Enter your gross pay into the salary calculator to see how state tax, county tax, and federal withholding reduce your take-home.
How Paycheck Taxes Work in Indiana
Every paycheck in Indiana is subject to federal income tax, FICA (Social Security at 6.2% and Medicare at 1.45%), and Indiana state income tax of up to 2.95%.
The median household income in Indiana is $71,959/year. At that income level, a single filer faces a federal effective tax rate of roughly 12β15%, plus FICA of 7.65%, plus state taxes of a few percent.
Indiana vs. National Average
| Tax | Indiana | National |
|---|
| State Income Tax (top rate) | 2.95% | ~5.5% avg |
| Federal Income Tax (median earner) | ~12% | ~12% |
| FICA (SS + Medicare) | 7.65% | 7.65% |
| Cost of Living Index | 90.7 | 100 |