If you live or work in Indiana, you probably ask yourself: “How much will I actually take home after taxes?”
Calculating your paycheck after taxes can be confusing, especially with federal taxes, FICA deductions, Indiana’s flat state income tax, and county income taxes that vary across the state.
This guide breaks it all down step-by-step — so you can understand exactly how much of your paycheck you’ll keep and how to double-check your take-home pay.
Step 1: Start With Your Gross Pay
Your gross pay is the total amount you earn before taxes and deductions.
- Salaried workers: Divide your annual salary by the number of pay periods per year.
- Example: $60,000 ÷ 24 (semi-monthly) = $2,500 per paycheck.
- Hourly workers: Multiply your hourly rate by hours worked in that pay period.
- Example: $25/hour × 80 hours (biweekly) = $2,000 gross pay.
This is your starting point for all tax calculations.
Step 2: Subtract Pre-Tax Deductions
Some deductions come out before taxes are applied. These reduce your taxable income and save you money.
Common pre-tax deductions include:
- 401(k) or 403(b) retirement contributions
- Health, dental, or vision insurance premiums
- Health Savings Account (HSA) or Flexible Spending Account (FSA) contributions
- Commuter or transportation benefits
Example:
If your gross pay is $2,000 and you contribute $100 to a 401(k) and $50 to insurance, your taxable income becomes:
→ $2,000 − $150 = $1,850
That $1,850 is what the tax calculations will use.
Step 3: Estimate Federal Income Tax
Federal income tax is based on progressive tax brackets, which means you pay higher rates on higher portions of income.
For 2025 (single filers), the IRS brackets look like this:
| Tax Rate | Taxable Income |
|---|---|
| 10% | Up to $11,600 |
| 12% | $11,601 – $47,150 |
| 22% | $47,151 – $100,525 |
| 24% | $100,526 – $191,950 |
Example:
If your taxable annual income is $60,000, your federal tax will total about $7,000–$8,000 per year, or roughly $290 per biweekly paycheck.
✅ Tip: Workers in Austin can verify deductions using the Texas paycheck calculator.
Step 4: Subtract FICA Taxes (Social Security + Medicare)
Every worker in Indiana pays FICA taxes, which fund Social Security and Medicare.
| Type | Rate | Applies To |
|---|---|---|
| Social Security | 6.2% | Up to $168,600 of income |
| Medicare | 1.45% | On all wages |
| Additional Medicare | 0.9% | Income above $200,000 (single) |
Example:
If your taxable income per paycheck is $1,850:
- Social Security = $1,850 × 6.2% = $114.70
- Medicare = $1,850 × 1.45% = $26.83
→ Total FICA = $141.53
Step 5: Apply Indiana State Income Tax
Indiana has a flat income tax rate of 3.05% (as of 2025). Everyone pays the same rate regardless of income.
Formula:
State Tax = Taxable Income × 3.05%
Example:
$1,850 × 3.05% = $56.43 in state tax.
👉 A paycheck planner is essential for visualizing income after deductions, taxes, and benefits.
Step 6: Add County Income Tax (Varies by County)
Unlike many states, Indiana also charges a county income tax. Each county sets its own rate, generally between 0.5% and 3%.
Here are a few examples (2025 rates):
| County | Resident Rate | Non-Resident Rate |
|---|---|---|
| Marion (Indianapolis) | 2.02% | 1.01% |
| Allen (Fort Wayne) | 1.48% | 0.74% |
| Hamilton | 1.1% | 0.55% |
| Lake | 1.5% | 0.75% |
| Tippecanoe | 1.1% | 0.55% |
Example:
If you live in Marion County and your taxable income per paycheck is $1,850:
$1,850 × 2.02% = $37.37 in county tax.
Step 7: Subtract Post-Tax Deductions
After taxes, you might still have deductions like:
- Roth IRA or Roth 401(k) contributions
- Union dues
- Charitable donations
- After-tax insurance or wage garnishments
These don’t lower taxable income but do reduce final take-home pay.
Step 8: Calculate Your Net (Take-Home) Pay
Now combine all the deductions:
Net Pay = Gross Pay − (Pre-Tax Deductions + Federal Tax + FICA + State Tax + County Tax + Post-Tax Deductions)
Example: Biweekly Paycheck ($25/hour, 80 hours, Marion County)
| Category | Amount |
|---|---|
| Gross Pay | $2,000 |
| Pre-Tax Deductions | − $150 |
| Federal Tax | − $290 |
| FICA (Social Security + Medicare) | − $141.53 |
| Indiana State Tax | − $56.43 |
| County Tax (Marion, 2.02%) | − $37.37 |
| Net Take-Home Pay | ≈ $1,325 per paycheck |
That equals about $34,450 per year after taxes — roughly 66% of your gross income.
Step 9: How Pay Frequency Affects Take-Home Pay
The total yearly net pay stays the same, but your paycheck amount changes depending on how often you’re paid.
| Pay Frequency | Paychecks per Year | Example Net Pay ($60k salary) |
|---|---|---|
| Weekly | 52 | ≈ $1,050 |
| Biweekly | 26 | ≈ $2,100 |
| Semi-Monthly | 24 | ≈ $2,280 |
| Monthly | 12 | ≈ $4,560 |
Plan your savings and bills around your actual pay schedule for better cash-flow control. If you live in Cleveland, calculate your after-tax pay through the Ohio paycheck calculator.
Step 10: Indiana vs Neighboring States
| State | State Income Tax | Local/County Tax | Approx. Net Pay ($60k salary) |
|---|---|---|---|
| Indiana | 3.05% flat | 0.5%–3% | ≈ $45,000 |
| Illinois | 4.95% flat | None | ≈ $44,500 |
| Ohio | 0.5–3.5% | City taxes apply | ≈ $45,200 |
| Kentucky | 4.5% flat | None | ≈ $44,700 |
Indiana’s total paycheck taxes are moderate — lower than Illinois and similar to Ohio, depending on your county. Employees in Denver can explore tax brackets on the Colorado salary calculator.
Tips to Maximize Your Take-Home Pay in Indiana
- Contribute to pre-tax accounts like 401(k) or HSA to reduce taxable income.
- Update your W-4 and Indiana WH-4 when your life situation changes.
- Check your county tax rate — working in a different county can change your net pay.
- Track deductions carefully to make sure your paycheck is accurate.
Frequently Asked Questions
1. What percentage of my paycheck goes to taxes in Indiana?
Most workers see around 20–25% of their paycheck withheld for federal, FICA, state, and county taxes combined.
2. Does Indiana have local or county income taxes?
Yes. Every county in Indiana charges a local tax (usually between 0.5% and 3%) in addition to the 3.05% state tax.
3. How can I reduce taxes from my paycheck?
Contribute to pre-tax accounts, verify withholdings, and ensure deductions are correct.
4. Do bonuses get taxed differently in Indiana?
Yes — employers withhold a flat 22% federal tax on bonuses plus Indiana’s 3.05% and applicable county tax.
5. Is Indiana’s state income tax progressive or flat?
It’s a flat tax — everyone pays the same 3.05% rate.
Bettye is the creator of CityPaycheckCalculator.com, a resource designed to help individuals quickly and accurately estimate their take-home pay across U.S. cities. With a strong focus on clarity, accuracy, and user experience, Bettye provides reliable paycheck calculators and helpful insights to support smarter financial decisions. Her mission is to make complex payroll and tax information simple and accessible for everyone.