Use our Indiana Paycheck Calculator to quickly figure out how much you’ll take home after taxes. Just enter your salary, pay frequency, and deductions, and get a detailed breakdown of your gross pay, taxes, and net pay in seconds.
How Your Indiana Paycheck is Calculated
Your paycheck starts with your gross pay and subtracts all required taxes and withholdings. The general formula is:
Gross Pay – (Federal Taxes + State Taxes + Local Taxes + FICA) = Net Pay
Here’s what each component means:
- Gross Pay: The total amount you earn before any deductions.
- Federal Income Tax: The amount withheld based on IRS tax brackets and your W-4 filing status.
- FICA Taxes: These include Social Security and Medicare contributions required by federal law.
- State Income Tax: A fixed or graduated rate determined by the state of Indiana.
- Local Taxes: Additional income taxes that may apply in certain counties or cities.
A Guide to Indiana State Payroll Taxes
Indiana State Income Tax
Indiana uses a flat income tax rate, meaning everyone pays the same percentage of their taxable income regardless of how much they earn. For the 2025 tax year, the Indiana state income tax rate is 3.05 percent.
| Tax Year | Indiana Flat Income Tax Rate |
|---|---|
| 2025 | 3.05% |
Indiana does not offer a separate standard deduction or personal exemption at the state level. However, residents may be eligible for certain tax credits that can reduce overall liability.
State-Specific Programs and Withholdings
Indiana does not require employees to contribute to a state disability insurance (SDI) or paid family leave program. Employers, however, must pay state unemployment insurance (SUI), which is not deducted from employee paychecks. This means workers only need to consider federal and state income taxes along with FICA deductions when estimating their net pay.
Understanding Federal and FICA Taxes
Federal taxes are the same for all U.S. workers, including those in Indiana. These include federal income tax and FICA contributions.
- Social Security tax rate: 6.2 percent of wages up to the annual wage limit.
- Medicare tax rate: 1.45 percent on all wages, with an additional 0.9 percent for earnings above the federal threshold for high-income earners.
Together, these taxes fund Social Security and Medicare benefits, which support retirees, disabled workers, and healthcare for older Americans.
Local Taxes in Indiana
In addition to the state income tax, Indiana counties may impose local income taxes that vary by location. These local taxes are withheld directly from employee paychecks and are used to fund local government services.
For example, residents of Marion County, Allen County, and Lake County may see additional county income tax deductions on their pay stubs. The rates differ depending on where you live or work, so employees in Indianapolis, Fort Wayne, and Gary should review their local tax rates when calculating take-home pay.
Frequently Asked Questions (FAQs) About Indiana Paychecks
What is the minimum wage in Indiana?
The minimum wage in Indiana is 7.25 dollars per hour, the same as the federal minimum wage. Some cities or employers may choose to pay more, but the state does not have a higher local minimum wage law.
How often are paydays in Indiana?
Most employers in Indiana pay their employees either bi-weekly or semi-monthly. However, Indiana law requires that employees be paid at least semi-monthly or every two weeks unless a different schedule is approved by the state.
What is the Indiana state tax rate for 2025?
For 2025, the Indiana state income tax rate is 3.05 percent. This flat rate applies to all taxable income earned by residents and nonresidents working in the state.
Are 1099 contractors subject to Indiana taxes?
Yes. Independent contractors in Indiana must pay both state income tax and federal self-employment taxes, which include the employer and employee portions of Social Security and Medicare. Contractors are responsible for making quarterly estimated tax payments to avoid penalties.
What are the overtime laws in Indiana?
Indiana follows federal overtime laws under the Fair Labor Standards Act (FLSA). Employees must receive one and a half times their regular hourly rate for all hours worked over 40 in a workweek, unless exempt under federal or state law.
Disclaimer: This Indiana Paycheck Calculator provides an estimate of your take-home pay based on general tax information for 2025. It should not be considered financial, legal, or tax advice. Actual withholdings may vary depending on your specific tax situation, deductions, and benefits elections.