Reading an Indiana pay stub, line by line
An Indiana pay stub has two state-level lines, and the second one is the surprise: a county income tax that every one of Indiana's 92 counties levies, locked in by where you lived on January 1. Here is what each line means in 2026:
IN State Income Tax ("IN State Tax", "IN SIT"). Indiana taxes adjusted gross income at a flat 2.95% for 2026 — one of the lowest flat rates in the country, and already scheduled to fall to 2.90% in 2027. There is no standard deduction; instead you get $1,000 exemptions (yourself, spouse, each dependent, plus $1,000 each for age 65 or blindness), $1,500 more per qualifying dependent child, another $1,500 the first year you claim a child, and $3,000 for an adopted child — all claimed on Form WH-4. Because the withholding formula and the annual tax are the same calculation, a correct stub reproduces the year-end liability; bonuses are withheld at 2.95% plus the county rate with no exemptions.
IN County Tax ("IN LIT", "Marion Co Tax"). Every Indiana county levies a Local Income Tax on the same base as the state tax, from 0.50% (Porter) to 3.00% (Randolph). The rate is fixed by your county of residence on January 1 — move in February and nothing changes until next year; nonresidents pay the rate of the county where they work. 2026 rates: Marion (Indianapolis) 2.02%, Lake 1.50%, Allen (Fort Wayne) 1.59%, Hamilton 1.10%, St. Joseph 1.75%, Monroe 2.14%, Elkhart 2.00%; six counties raised rates for 2026. In Randolph and Cass counties the county tax is as high as or higher than the state tax. Residents of Kentucky, Michigan, Ohio, Pennsylvania, and Wisconsin working in Indiana skip the state tax under reciprocity (Form WH-47) — but the county tax still comes out.
What you will NOT see: an unemployment deduction (SUTA is "paid by the employer without deduction from the wages of an employee" on the first $9,500), state disability insurance, a paid-family-leave premium, or any city or school-district tax — Indiana's only local income tax is the county one.
Plus the federal lines on every US stub: federal income tax, Social Security (6.2% up to $184,500 in 2026), and Medicare (1.45%, plus 0.9% on wages over $200,000).
Indiana paycheck facts — 2026
| Item | 2026 value |
|---|---|
| State income tax | Flat 2.95% (2026) → 2.90% in 2027 · no standard deduction |
| Exemptions (WH-4) | $1,000 personal · +$1,500 per qualifying child · +$1,500 first-time child · $3,000 adopted child |
| County income tax | All 92 counties, 0.50%–3.00% by county of residence on Jan 1 · Marion 2.02% · Lake 1.50% · Allen 1.59% · Hamilton 1.10% |
| Employee-paid SUI / SDI / PFML | None — SUTA employer-only ($9,500 base); no disability or paid-leave program |
| Reciprocity | KY, MI, OH, PA, WI residents pay no Indiana state tax on Indiana wages — county tax still applies |
| Minimum wage | $7.25 · $2.13 tipped cash wage · $4.25 training wage (under 20, first 90 days) · local rates prohibited (IC 22-2-2-10.5) |
| Pay frequency | Semimonthly, or biweekly on request; within 10 business days of period end (IC 22-2-5-1) |
| Pay stub required? | Yes — hours worked, wages paid, and deductions each pay period (IC 22-2-2-8); electronic allowed |
| Final paycheck | Next regular payday — same rule whether fired (IC 22-2-9-2) or quit (IC 22-2-5-1) |
What you actually take home in Indiana (2026 estimates)
Estimated for a single filer taking the federal standard deduction, including federal income tax, Social Security, Medicare, Indiana state tax at 2.95% after one $1,000 exemption, and the Marion County (Indianapolis) tax of 2.02% on the same base:
| Gross pay | Est. net per year | Net biweekly | Net monthly | Effective tax |
|---|---|---|---|---|
| $40,000 | $32,382 | $1,245 | $2,698 | 19.0% |
| $60,000 | $47,458 | $1,825 | $3,955 | 20.9% |
| $75,000 | $57,915 | $2,227 | $4,826 | 22.8% |
| $100,000 | $74,260 | $2,856 | $6,188 | 25.7% |
| Min wage, full-time ($7.25/hr) | $13,227 | $509 | $1,102 | 12.3% |
| Indiana median wage ($23.01/hr) | $38,307 | $1,473 | $3,192 | 20.0% |
Where the money goes at $60,000: Indiana state tax $1,741 (2.9% of gross) plus Marion County tax $1,192 — $2,932, or 4.9%. Federal income tax and FICA take the other 16%. The county line is 68% the size of the state line on an Indianapolis stub.
Your county moves the number: at $60,000 a Porter County resident (0.50%) keeps about $897 more than this table; a Hamilton County resident (1.10%) about $543 more; a Randolph County resident (3.00%) $578 less.
Methodology: 2026 federal brackets and $16,100 standard deduction (IRS Rev. Proc. 2025-32), FICA per SSA, Indiana flat 2.95% (IC 6-3; DOR Departmental Notice #1, effective January 1, 2026) after one $1,000 exemption, Marion County local income tax 2.02% on the same base. Estimates only — your withholding depends on your W-4/WH-4 exemptions, county of residence, credits, and pre-tax benefits.
What Indiana jobs pay (BLS, May 2025)
| Occupation | Median hourly | Median annual |
|---|---|---|
| Registered nurse | $40.14 | $83,500 |
| Software developer | $50.92 | $105,920 |
| Elementary school teacher | — | $59,700 |
| Truck driver (heavy) | $28.99 | $60,290 |
| Construction laborer | $24.07 | $50,070 |
| Customer service rep | $20.74 | $43,140 |
| Waiter / waitress (tips included) | $13.69 | $28,480 |
| Retail salesperson | $15.16 | $31,530 |
Indiana's median hourly wage across all occupations is $23.01 — about 6% under the national median of $24.51. Its heavy truck drivers ($28.99), the state's logistics backbone, earn more than in Ohio or Michigan; its software developers ($50.92) are among the lowest paid on this site, with only Mississippi ($45.83), Louisiana ($49.42), and Arkansas ($50.23) paying less.
Indiana's workforce in numbers
- 7.0 million residents, civilian labor force of 3.5 million, unemployment 3.3% (Census 2025 estimate; BLS, July 2026 preliminary)
- 486,290 self-employed (nonemployer) businesses (Census, 2023) — about one for every 14 residents
- 2.9 million people on employer payrolls at 155,692 establishments, earning $168 billion a year (Census County Business Patterns, 2023)
- Mean annual wage: $60,840 (BLS OEWS, May 2025)
Indiana pay rules — the answers people actually need
Final paycheck: next regular payday, whether you were fired or quit. IC 22-2-9-2 makes unpaid wages due "at regular pay day for pay period in which separation occurred"; IC 22-2-5-1(b) says the same for employees who leave voluntarily. Accrued vacation is owed if company policy treats it as earned. If you were fired and are owed $30 to $6,000, you must file a claim with the Indiana Department of Labor before you can sue; employees who quit may go straight to court.
Pay frequency: at least semimonthly, or biweekly if you ask (IC 22-2-5-1), no more than 10 business days after the end of the pay period.
Is a pay stub required? Yes. IC 22-2-2-8 requires a statement each pay period showing hours worked, wages paid, and a listing of deductions; the Department of Labor confirms electronic delivery is fine. Deductions beyond taxes need a signed written authorization that you can revoke (IC 22-2-6-2).
Form WH-4 fixes your county. The form records your county of residence and county of principal employment as of January 1; employers withhold the residence-county rate all year regardless of a mid-year move. Update it each January if you relocate.
County income tax rates in Indiana's largest counties (2026)
Indiana has no local minimum wages — IC 22-2-2-10.5 bars cities and counties from setting one above $7.25 — but every county taxes income. The rate follows your home county on January 1 and applies to the same wages, after the same exemptions, as the state tax:
| County (main city) | 2026 rate | Combined with state 2.95% |
|---|---|---|
| Marion (Indianapolis) | 2.02% | 4.97% |
| Monroe (Bloomington) | 2.14% | 5.09% |
| Elkhart | 2.00% | 4.95% |
| St. Joseph (South Bend) | 1.75% | 4.70% |
| Allen (Fort Wayne) | 1.59% | 4.54% |
| Lake (Gary, Hammond) | 1.50% | 4.45% |
| Vanderburgh (Evansville) | 1.25% | 4.20% |
| Hamilton (Carmel, Fishers) | 1.10% | 4.05% |
| Porter (lowest) | 0.50% | 3.45% |
| Randolph (highest) | 3.00% | 5.95% |
Six counties raised rates on January 1, 2026 — Carroll (2.4733%), Grant (2.75%), Greene (2.35%), Howard (2.35%), Shelby (1.70%), and Union (2.75%). The full 92-county table is Departmental Notice #1, republished every January and October. No Indiana city, township, or school district taxes income.
How Indiana compares with its neighbors (take-home on $60,000, 2026 est.)
| State | Est. net/year | Difference vs IN |
|---|---|---|
| Indiana (Marion County) | $47,458 | — |
| Illinois (flat 4.95%) | $47,565 | +$107 |
| Ohio (no city tax) | $49,184 | +$1,726 |
| Michigan (no city tax) | $48,091 | +$633 |
| Kentucky (no local tax) | $48,408 | +$950 |
Indiana's low state rate and high county rates roughly cancel out: an Indianapolis resident pays about $2,930 in state-and-local tax at $60,000 — a little more than an Illinois worker's flat $2,825, and close to a Detroit resident's total. Move to Hamilton County and Indiana becomes the cheapest state on the list. Reciprocity covers the state tax for Kentucky, Michigan, Ohio, Pennsylvania, and Wisconsin residents working in Indiana, but never the county tax.
FAQ
What is the Indiana income tax rate on my paycheck in 2026?
A flat 2.95% of Indiana adjusted gross income after $1,000 exemptions (plus $1,500 per qualifying child), falling to 2.90% in 2027. On top of that, every Indiana county levies its own income tax of 0.50% to 3.00% on the same base — 2.02% in Marion County — set by your county of residence on January 1.
Why is there a county tax on my Indiana pay stub?
Because all 92 Indiana counties levy a Local Income Tax under IC 6-3.6, withheld by employers using the same exemptions as the state tax. The rate is fixed by where you lived on January 1 of the tax year (or, for nonresidents of Indiana, where you work), so a mid-year move doesn't change it until the next year. Rates run from 0.50% in Porter County to 3.00% in Randolph County.
How much tax comes out of a paycheck in Indiana?
A single filer in Marion County earning $60,000 keeps about $47,458 a year — roughly $1,825 per biweekly check, a 20.9% effective rate covering federal income tax, Social Security, Medicare, Indiana state tax (about $1,741), and Marion County tax (about $1,192). Residents of lower-rate counties keep more: about $897 more in Porter County.
I live in Kentucky, Michigan, Ohio, Pennsylvania, or Wisconsin and work in Indiana — what is withheld?
Under Indiana's reciprocal agreements, no Indiana state income tax is withheld from your wages once you file Form WH-47 with your employer; you pay your home state instead. Indiana county tax still applies, at the rate of the county where you work.
Does my employer have to give me a pay stub in Indiana?
Yes. IC 22-2-2-8 requires a statement each pay period showing hours worked, wages paid, and a listing of deductions. The Indiana Department of Labor allows electronic statements. Any deduction beyond taxes requires your signed, revocable written authorization.
When is my final paycheck due in Indiana?
On the next regular payday for the pay period in which you left, whether you were fired (IC 22-2-9-2) or quit (IC 22-2-5-1). Vacation is paid out if company policy treats it as earned. Fired employees with claims between $30 and $6,000 must file with the Indiana Department of Labor before suing.
What is the minimum wage in Indiana?
$7.25 per hour, the federal rate, unchanged since July 2009, with a $2.13 tipped cash wage and a $4.25 training wage for workers under 20 in their first 90 days. Indiana law (IC 22-2-2-10.5) prohibits any city or county from setting a higher minimum.