How Paycheck Taxes Work in Indiana
How paycheck taxes work in Indiana: Your employer withholds federal income tax based on your W-4, then Indiana state income tax using state withholding tables. Social Security (6.2%) and Medicare (1.45%) are also deducted from each paycheck. Indiana has a flat 2.95% state rate for 2026 plus county income taxes that vary by residence. This calculator estimates state tax only; county taxes may add additional withholding.
Indiana State Tax Information
Indiana uses a flat 2.95% state income tax rate.
Indiana has a flat 2.95% state rate for 2026 plus county income taxes that vary by residence. This calculator estimates state tax only; county taxes may add additional withholding.
Federal Income Tax
Federal income tax uses progressive brackets — higher income is taxed at higher rates. The standard deduction reduces your taxable income before brackets apply. Your W-4 determines how much your employer withholds each pay period.
Social Security
Social Security tax (FICA) is 6.2% of wages up to the annual wage base ($184,500 in 2026). Both employee and employer pay this amount; this calculator shows the employee portion.
Medicare
Medicare tax is 1.45% on all wages with no cap. High earners pay an additional 0.9% on wages above $200,000 (single) or $250,000 (married filing jointly).