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What your salary leaves after taxes in Indiana (2026)
Indiana's flat income tax has been on a steady downward path, reaching 2.95% for 2026. The rate applies to adjusted gross income with no standard deduction (only a small $1,000 personal exemption). But the headline rate is only half the story — every one of Indiana's 92 counties adds its own income tax on top, ranging from 0.5% to 3.38%.
| Gross salary | Federal tax | FICA | IN 2.95% | Take-home | Eff. rate |
|---|---|---|---|---|---|
| $50,000 | $3,820 | $3,825 | $1,475 | $40,880 | 18.2% |
| $75,000 | $7,670 | $5,738 | $2,213 | $59,380 | 20.8% |
| $100,000 | $13,170 | $7,650 | $2,950 | $76,230 | 23.8% |
Single filer, 2026 federal brackets. County income tax not included — add your county's rate for total take-home.
County income taxes: Indiana's second layer
Every Indiana county sets its own income tax rate. Some common examples: Marion County (Indianapolis) charges 2.02%, Hamilton County 1.0%, Lake County (Gary area) 1.5%, and Allen County (Fort Wayne) 1.48%. The statewide average is about 1.6%. On a $75,000 salary, a 2% county rate adds $1,500 in tax, dropping take-home from $59,380 to roughly $57,880.
At the extreme, Pulaski County's 3.38% rate combined with the 2.95% state rate totals 6.33% — approaching the effective rate of a mid-bracket progressive state.
Monthly and biweekly at $55,000
| Period | State-only take-home | With 2% county |
|---|---|---|
| Annual | $44,748 | ~$43,648 |
| Monthly | $3,729 | ~$3,637 |
| Bi-weekly | $1,721 | ~$1,679 |
Indiana versus its neighbors
At 2.95%, Indiana's state-level rate is far below Illinois (4.95%) and Michigan (4.25%). Even after adding a typical 1.5% county tax, the combined Indiana rate of about 4.45% still undercuts Illinois. Compared to Ohio's progressive system (0% to 3.5%), Indiana is cheaper at most income levels. The only neighboring state that beats Indiana outright is no-income-tax Kentucky (3.5%), which has a higher state rate but no county tax.
Questions
Indiana salary after taxes FAQ
How much is a $55,000 salary after taxes in Indiana?
A single filer earning $55,000 in Indiana takes home about $44,750 per year after federal income tax, FICA and the flat 2.95% state rate. That works out to roughly $3,729 per month or $1,721 biweekly. County income tax, which ranges from 0.5% to 3.38%, would reduce this further.
What is Indiana's county income tax?
All 92 Indiana counties levy their own income tax on top of the 2.95% state rate. Rates vary widely: from 0.5% in several rural counties to 3.38% in Pulaski County. Marion County (Indianapolis) charges 2.02%. On a $55,000 salary, a 2% county rate adds $1,100 in tax.
Has Indiana's tax rate been reduced recently?
Yes. Indiana has steadily cut its flat rate from 3.23% in 2022 to 3.15% in 2023, 3.05% in 2024, 3.0% in 2025, and 2.95% in 2026. Further reductions are planned through revenue triggers, potentially reaching as low as 2.9% by 2027 if state revenues meet targets.
How does Indiana compare to Illinois for take-home pay?
Indiana is significantly cheaper. On a $75,000 salary, you keep about $59,380 in Indiana versus $58,021 in Illinois, saving roughly $1,359 per year at the state level alone. However, Indiana's county taxes (typically 1% to 2%) partially narrow this gap, while Illinois has no local income tax.
Does Indiana have a standard deduction?
Indiana does not offer a standard deduction for state income tax. The flat 2.95% rate applies to adjusted gross income. Indiana does provide a $1,000 personal exemption per filer (plus $1,500 per dependent), which slightly reduces the taxable base.
What is the effective tax rate on $75,000 in Indiana?
On $75,000, a single filer pays about $15,620 in combined federal, FICA and Indiana state taxes, for an effective rate of 20.8%. Take-home is roughly $59,380. Adding a typical county rate of about 1.5% would increase total taxes by $1,125.
Is Indiana good for high earners?
Yes. Indiana's flat 2.95% is the same whether you earn $40,000 or $400,000, meaning high earners avoid the bracket creep of progressive states. At $100,000, you keep about $76,230, more than in neighboring Illinois, Michigan, or Ohio. Low property taxes (about 0.84%) add to the advantage.
Does Indiana tax retirement income?
Social Security is fully exempt. However, unlike Illinois and Pennsylvania, Indiana does tax pension and 401(k) distributions at the flat 2.95% rate. There is a small retirement income deduction of up to $6,000 per spouse for qualifying filers age 62 and older.
- Sources: Indiana Dept. of Revenue (2.95% flat rate for 2026) · IRS Rev. Proc. 2025-32 · SSA 2026 wage base $184,500 · Tax Foundation 2026 state tax data.
- 🔄 Last updated July 2026 · Tax year 2026
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