Indiana uses a flat 3.05% state income tax rate on all taxable income, but the taxable base is your gross wages minus a $1,000 personal exemption (single) or $2,000 (married). Indiana does not use a standard deduction like the federal system. At $65,000, Indiana taxable income is $64,000, and the state tax is $1,952. That is a far simpler calculation than bracket states.
Note that Indiana does NOT subtract the federal standard deduction ($14,600) for state tax purposes. Only the small personal exemption applies. This means more of your gross wages are subject to Indiana state tax compared to states that use the federal standard deduction base. For contractors who pay self-employment tax as well, the self-employment tax calculator estimates your combined SE and state obligations.
Indiana employers withhold four things from a paycheck: federal income tax, Indiana state income tax at 3.05%, Social Security (6.2%), and Medicare (1.45%). Indiana has no statewide SDI, FLI, or payroll surcharge. However, Indiana counties also levy their own income taxes, and your employer must also withhold county tax based on your county of residence. Marion County (Indianapolis) charges 2.02%; other counties range from 0.5% to 3.38%.
This calculator shows only state-level Indiana tax. Your actual take-home will be lower once county tax is factored in. For the most accurate estimate, look up your county tax rate on the Indiana Department of Revenue website and subtract it manually from the result above. Pre-tax 401(k) and health insurance premiums reduce both federal and Indiana state taxable income.
At $60,000, a single Indiana filer keeps about $48,401 after all state and federal taxes, or $4,033 per month. Indiana's low 3.05% rate means state tax is only $1,800 on this salary, one of the lowest state tax bills in the Midwest. Federal income tax at $5,209 is the largest single deduction.
| Annual Salary | Federal Tax | IN State Tax | Social Security | Medicare | Annual Take-Home | Monthly Take-Home |
|---|---|---|---|---|---|---|
| $50,000 | $4,010 | $1,495 | $3,100 | $725 | $40,670 | $3,389 |
| $60,000 | $5,209 | $1,800 | $3,720 | $870 | $48,401 | $4,033 |
| $65,000 | $5,810 | $1,952 | $4,030 | $943 | $52,265 | $4,355 |
| $75,000 | $8,202 | $2,257 | $4,650 | $1,088 | $58,803 | $4,900 |
| $100,000 | $13,703 | $3,020 | $6,200 | $1,450 | $75,627 | $6,302 |
Single filers, no pre-tax deductions. IN state tax = (gross - $1,000 exemption) x 3.05%. Does not include county income tax. Federal tax based on 2025 brackets and $14,600 standard deduction. Highlighted row is the $60,000 reference.
Indiana's 3.05% flat rate creates a meaningful take-home advantage over neighboring states. At $65,000, an Indiana resident pays $1,952 in state income tax. An Illinois resident pays approximately $3,218 (4.95% on full wages). That is $1,266 more per year, or about $106 per month, going to the state instead of the worker.
| Annual Salary | Indiana (3.05%) | Illinois (4.95%) | Michigan (4.25%) | Ohio (top 3.99%) | IN vs IL Savings |
|---|---|---|---|---|---|
| $50,000 | $1,495 | $2,475 | $2,125 | $1,219 | +$980/yr |
| $65,000 | $1,952 | $3,218 | $2,763 | $1,607 | +$1,266/yr |
| $85,000 | $2,562 | $4,208 | $3,613 | $2,177 | +$1,646/yr |
| $100,000 | $3,020 | $4,950 | $4,250 | $2,623 | +$1,930/yr |
| $150,000 | $4,545 | $7,425 | $6,375 | $4,131 | +$2,880/yr |
Indiana figures use gross minus $1,000 exemption. Illinois applies 4.95% to gross wages. Michigan applies 4.25% to adjusted gross income after deductions. Ohio figures use 2025 progressive brackets. Indiana county tax not included in these comparisons.
Indiana has reduced its flat income tax rate four times in three years: 3.23% (2022), 3.15% (2023), 3.05% (2024-2025). The Indiana legislature has approved further reductions that will bring the rate to 2.9% by 2027. Each cut has increased take-home pay for every Indiana worker at every income level.
At $65,000, the full cut from 3.23% to 2.9% saves $213 per year compared to the 2022 rate. A $100,000 earner will save $330 per year by 2027. These are automatic savings requiring no action on the worker's part. If Indiana reaches its 2.9% target, it will have the second-lowest flat income tax rate in the nation among states with a broad income tax.
For workers comparing overtime pay across states, the time and a half calculator shows gross before taxes so you can enter it above and see exactly what Indiana state tax applies to overtime earnings.
Indiana's rate is scheduled to drop below 3% by 2027. If you are negotiating a salary or planning a job change, factor in that your Indiana take-home will increase automatically each year without any action required.