Indiana charges 2.95% flat + local state income tax plus local taxes in some areas. Use the w-4 withholding calculator pre-loaded with Indiana rates.
Open W-4 Withholding Calculator →Getting your W-4 right in Indiana is important because you need to coordinate federal withholding with Indiana's flat 2.95% state withholding. If your W-4 is set too conservatively, you lend the government an interest-free loan; too aggressively, and you face an underpayment penalty. Workers in Indiana localities with income tax need to account for that additional withholding layer. This calculator helps you dial in the right federal withholding amount given your Indiana state tax situation.
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 w-4 withholding 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.