Indiana charges 2.95% flat + local state income tax plus local taxes in some areas. Use the employer cost calculator pre-loaded with Indiana rates.
Open Employer Cost Calculator →Employers in Indiana must withhold and remit the flat 2.95% state income tax, plus handle their share of FICA, FUTA, and Indiana's state unemployment insurance. Localities in Indiana with income tax add another withholding and remittance obligation. The total cost to employ someone at a $75,000 salary in Indiana is typically 10-15% above the gross salary, covering the employer's payroll tax share, SUI, workers' comp, and benefits. This calculator breaks down the full employer cost with Indiana's specific tax rates.
Indiana levies a flat 2.95% state income tax on all taxable income regardless of how much you earn. This makes tax planning straightforward: for every additional dollar you earn, 2.95 cents goes to Indiana. However, certain localities in Indiana impose their own income taxes, which effectively raise the combined state and local rate above 2.95%. Be sure to check whether your city or county adds a local income tax.
The table below shows what you actually keep at five salary levels in Indiana, accounting for federal tax, FICA, and Indiana's flat 2.95% state tax plus estimated local taxes.
See how Indiana compares to other Midwest states. Each link takes you to the employer cost calculator landing page for that state.
For a comprehensive breakdown of Indiana’s tax structure, salary comparisons, cost-of-living analysis, and more, visit the full Indiana take-home pay page.