Indiana's flat state income tax is just 3.0% (falling to 2.95% in 2026), one of the lowest in the country, but every Indiana county adds its own local income tax on top.
Those county rates run from about 0.5% to over 3%, so your real Indiana rate depends heavily on where you live. Here is how the low flat state rate and the county add-on stack up. See your exact take-home with the free Indiana paycheck calculator.
How Indiana's income tax works
Indiana applies a flat 3.0% to your adjusted gross income after a $1,000 personal exemption per filer (there is no standard deduction). The flat rate is on a downward path: 3.05% in 2024, 3.0% in 2025, and 2.95% scheduled for 2026, so the state portion keeps shrinking.
On top of the state rate, all 92 Indiana counties levy a local income tax, generally 0.5% to 3%+, based on where you live on January 1. Marion County (Indianapolis) is around 2.02%. We model the state tax only, so add your county rate to the figures below.
Your take-home on a $65,000 salary in Indiana
Here is how a $65,000 salary breaks down for a single filer, using 2025 federal and FICA figures alongside Indiana's a flat 3.0% state tax plus a county tax.
| Item | Annual |
|---|---|
| Federal income tax | $5,246 |
| FICA (Social Security + Medicare) | $4,973 |
| Indiana income tax | $1,920 |
| Take-home pay | $52,862 |
| Percent of gross kept | 81.3% |
On a $65,000 salary a single filer owes about $1,920 in Indiana state income tax and keeps roughly $52,862, or 81.3% of gross, before the county tax. Add roughly 1% to 2% for your county (about $650 to $1,300 a year), and the picture in Indianapolis still beats neighboring Illinois on take-home. Compare with Illinois.
Every county adds its own income tax
Indiana's headline 3.0% is genuinely low, but the universal county tax is the asterisk. Because it is levied where you live (not where you work), moving across a county line can change your take-home. Check your county's current rate on the Indiana DOR site for your true number.
Indiana does not tax Social Security and offers deductions for some retirement and military income, so retirees generally fare well under the low flat rate.
How to keep more of your Indiana paycheck
A traditional 401(k) and HSA lower your Indiana (and county) taxable income along with your federal income, and the HSA also avoids FICA, the simplest way to trim all three layers at once.