INDIANA PAYCHECK CALCULATOR
Quick answer: on a $70,000 salary in Indiana, filing Single and living in Marion County (Indianapolis), you take home roughly $54,650 a year, which works out to about $2,102 every two weeks on a biweekly schedule.
Indiana’s state rate is one of the lowest flat rates in the country, but nearly everyone also owes a county tax on top of it. Scroll down to plug in your own county.
Indiana’s state income tax is genuinely low. The flat rate has been sliding down for years under a legislated phase-down, from 3.23% before the cuts began to 2.95% for 2026, with a further step to 2.90% already scheduled for 2027 per the Indiana Department of Revenue. What keeps the full picture more complicated than that one number suggests is Indiana’s county income tax system: all 92 counties levy their own income tax on top of the state rate, and rates range from 0.50% in some rural counties up to 3.38% in Pulaski County. Because of that spread, two Indiana residents earning the identical salary can owe meaningfully different total income tax depending purely on which county they lived in as of January 1. The Tax Foundation’s 2026 State Tax Competitiveness Index ranks Indiana 10th out of 50 states, a strong showing that slipped one spot from the year before, driven by county rates edging up in several places even as the state rate kept falling.
What lands on an Indiana paystub reflects both layers. Federal income tax, Social Security, and Medicare come out first, the same as anywhere else. Indiana state tax follows at the flat 2.95% rate, applied to adjusted gross income after a small personal exemption, and then county tax gets added on top based on county of residence, not county of employment. There is no separate standard deduction the way the federal return has one. If you are comparing Indiana against a neighbor, the contrast can be sharp: see the Illinois paycheck calculator for a state with a higher flat rate but no local income tax anywhere, or the Ohio paycheck calculator, where the first chunk of income is exempt entirely before a similarly modest rate applies.
Indiana Paycheck Calculator
How the Federal Number Was Worked Out
Take the default example above, a single filer earning $70,000 a year with no other adjustments. Here is exactly how the federal piece gets built, step by step, using the 2026 IRS brackets and the $16,100 single standard deduction. Indiana does not borrow this federal deduction for its own return, so keep it separate from the state math below.
Step 1. $70,000 gross minus the $16,100 standard deduction leaves $53,900 in federal taxable income.
Step 2. The first $12,400 is taxed at 10%, which comes to $1,240.
Step 3. The next chunk, from $12,400 to $50,400, is taxed at 12%. That is $38,000 taxed at 12%, or $4,560.
Step 4. The remaining $3,500, from $50,400 up to the $53,900 taxable income figure, is taxed at 22%, adding $770.
Step 5. Add it up: $1,240 + $4,560 + $770 = $6,570 in federal income tax, an effective federal rate of about 9.4% on the full $70,000.
Indiana’s own math starts fresh from the $70,000 gross figure, subtracts a $1,000 personal exemption, and applies 2.95%, then adds county tax on that same base.
Indiana vs Nearby States at $70,000 (Single Filer)
These numbers assume a single filer with no dependents. Indiana’s figure uses Marion County’s 2.02% rate as a representative example; Illinois has no local income tax anywhere, and Ohio’s figure below excludes any municipal income tax and Ohio’s smaller personal exemption credit, both of which would lower it slightly further for most filers.
| State | State + Local Tax | Effective Rate | Est. Net Pay* |
|---|---|---|---|
| Indiana (Marion County) | $3,429 | 4.90% | $54,646 |
| Illinois | $3,320 | 4.74% | $54,755 |
| Ohio | $1,209 | 1.73% | $56,866 |
*Net pay estimate includes federal tax and FICA at $70,000 gross, single filer, before any additional local municipal tax not already noted above.
Ohio’s $26,050 zero-bracket does a lot of work at this income level, which is why its state-only number looks dramatically lower than Indiana’s or Illinois’s, though Ohio claws some of that back through municipal income taxes that can run as high as 2.5% in cities like Columbus or Cleveland. Indiana and Illinois land close to each other here, but for very different reasons: Illinois’s higher flat rate is offset by having no local income tax anywhere, while Indiana’s lower state rate gets pulled back up by whichever county someone happens to live in. A Hamilton County resident using the same $70,000 salary would land noticeably below the Marion County figure shown here, purely from the 0.92 percentage point difference in county rates.
Where Your Paycheck Money Actually Goes
Picture that same $70,000 salary landing as a biweekly paycheck of $2,692.31 before anything is taken out, for a Marion County resident. Here is the order things get pulled, and what is left standing at the end.
Federal income tax comes off first, working out to roughly $252.69 per biweekly check based on the annual $6,570 figure above.
Social Security takes 6.2% of every check up until your year-to-date wages hit the 2026 wage base of $184,500. On $2,692.31, that is $166.92 gone.
Medicare takes 1.45% with no cap at all, which is $39.04 on this check. The extra 0.9% Medicare surtax only kicks in once your total wages for the year pass $200,000 for a single filer, so it does not apply here.
Indiana state tax, based on the roughly $2,036 annual figure, works out to about $78.29 per biweekly check.
Marion County tax, at 2.02% of the same base, adds about $53.61 per biweekly check.
Add those five deductions together and about $590.55 disappears from the $2,692.31 gross, leaving a net paycheck of roughly $2,101.76 every two weeks, or $54,645.70 across the full year.
Indiana’s County Income Tax System, Explained
Indiana’s county income tax is unusual nationally for how comprehensive and residence-based it is. Every one of the state’s 92 counties imposes one, there is no county without it, and the rate is set entirely by county residence as of January 1 of the tax year. That means someone who lives in a low-rate county but works in a high-rate county pays their home county’s rate, not their workplace county’s, and someone who moves counties partway through the year still owes their January 1 county’s rate for the full year. Rates get set and adjusted twice a year, in January and October, through the Indiana Department of Revenue’s Departmental Notice #1, and they genuinely span a wide range: Hamilton County, home to the affluent Indianapolis suburbs of Carmel and Fishers, sits at 1.10%, while rural Pulaski County tops the list at 3.38%. Marion County, which includes Indianapolis itself, sits closer to the middle at 2.02%.
| County | Major City | 2026 County Rate |
|---|---|---|
| Hamilton | Carmel, Fishers, Noblesville | 1.10% |
| Allen | Fort Wayne | 1.48% |
| Marion | Indianapolis | 2.02% |
| Pulaski | rural, north-central Indiana | 3.38% (highest) |
This system is also part of why Indiana’s income tax reciprocity agreement with Illinois matters so much for the Chicago metro area’s Indiana side. An Illinois resident working in an Indiana county pays Illinois tax on those wages, not Indiana state or county tax, and the reverse holds for an Indiana resident commuting into Illinois: only home-state tax applies, filed with an exemption certificate through the employer.
How Indiana’s Tax Burden Stacks Up
| Tax Type | Indiana | National Picture |
|---|---|---|
| Income tax | Flat 2.95% state, plus a county tax of 0.50% to 3.38% | Nine states charge no income tax at all; several charge over 9% |
| Sales tax | 7% flat statewide, no local add-ons anywhere | National average combined rate runs close to 7.5% |
| Property tax | Roughly 0.76% effective rate, well below the national average | National average sits close to 0.9% to 1.1% |
| Estate tax | No estate or inheritance tax | Most states have no estate tax either |
Indiana is one of the few states that does not allow any local option sales tax, so the 7% statewide rate is genuinely the whole story on that front, unlike Illinois or many other neighbors where the sticker rate and the real combined rate can differ by several points depending on the city. Property taxes are structured with levy limits designed to prevent unconstrained year-over-year growth, which is part of why Indiana’s effective rate stays well under the national average even in higher-cost counties like Hamilton. The one place the tax code gets genuinely complicated is exactly where the county system lives: income tax, where a low headline state rate can mask a meaningfully higher combined bill depending purely on address.
Cross-Border Commuters: Chicago, Cincinnati, and Louisville
Indiana borders three major metro areas that spill across state lines, and the tax treatment differs sharply depending on which one applies. Northwest Indiana, Lake and Porter counties especially, functions as a lower-cost commuter belt for the Chicago area, and the Illinois-Indiana reciprocity agreement means a resident of either state working in the other only owes tax to their home state, a genuine simplification compared to most cross-border commuting situations. Indiana has no such reciprocity agreement with Kentucky or Ohio, though, so a Southern Indiana resident commuting into Louisville or Cincinnati for work generally owes Indiana tax as a resident and needs to sort out a credit for any tax withheld by the other state, rather than getting the clean single-state treatment Illinois commuters enjoy. Anyone in one of these cross-border situations should confirm exactly how their specific pair of states, and in Indiana’s case, their specific county, handles the paperwork, since a mishandled withholding election can mean owing a surprise balance at filing time even when the total tax bill would have worked out roughly the same either way.
Frequently Asked Questions
What is Indiana’s state income tax rate for 2026?
Indiana charges a flat 2.95% on adjusted gross income for 2026, down from 3.0% in 2025. Per the Indiana Department of Revenue, it is scheduled to step down again to 2.90% in 2027 as part of a multi-year phase-down that began in 2022.
Do I also owe a county income tax in Indiana?
Yes, almost certainly. All 92 of Indiana’s counties levy their own income tax on top of the state rate, ranging from 0.50% up to 3.38% depending on the county. Your county tax is based on where you lived on January 1 of the tax year, not where you work, and it is withheld automatically alongside state tax.
What is Indiana’s standard deduction for 2026?
Indiana does not use a standard deduction. Instead, it allows a personal exemption of $1,000 per taxpayer, plus an additional $1,500 for each dependent, subtracted from adjusted gross income before the flat rate applies.
Do Illinois residents who work in Indiana pay tax twice?
No. Indiana and Illinois have a reciprocity agreement, so an Illinois resident working in Indiana pays income tax only to Illinois on those wages, not to Indiana. The Indiana employer withholds Illinois tax instead once the employee files the appropriate exemption form, and the same works in reverse for Indiana residents working in Illinois.
Is Indiana a good state for taxes overall?
Indiana ranks 10th out of 50 states on the Tax Foundation’s 2026 State Tax Competitiveness Index, slipping one spot from 9th the year before as county income tax rates edged up in several counties while the state rate itself kept falling. Its property taxes are genuinely low at around 0.76% effective, and its 7% sales tax has no local add-ons anywhere in the state.
Does Indiana tax Social Security and military retirement pay?
No. Indiana does not tax Social Security benefits at all, and military retirement income is fully exempt from Indiana state tax. Other retirement income, including pensions and 401(k) or IRA withdrawals, is generally taxed as ordinary income at the flat state rate plus the applicable county rate.
Indiana’s tax code makes a promise with its low, falling state rate and then complicates it right back with the county system sitting underneath. Neither number tells the full story alone. A 2.95% headline rate looks great until a Pulaski County address adds another 3.38% on top of it, and it looks entirely reasonable again in a low-rate county like Hamilton. Anyone comparing Indiana against another state, or even against a different Indiana county, needs both numbers, not just the one on the state’s own tax rate page.