For more on how deductions change taxable wages, see our
pre-tax vs. post-tax deductions guide.
Indiana Paycheck Tax Calculator: How Indiana Withholding Works
An Indiana paycheck calculator has to get two
state-level taxes right: the 2.95% state tax and the county tax for
your January 1 county. On your pay stub they usually appear as
SIT or IN state withholding
and a separate county line, often labeled with the county name or
code. Our
pay stub abbreviations list
explains the other codes.
Federal Withholding for Indiana Paychecks
Federal withholding uses your Form W-4 and the 2026 IRS Publication
15-T tables. The calculator supports filing status, Step 2(c), Step 3
credits and Step 4(a), 4(b) and 4(c). If you claim the new overtime
or tips deductions, our
W-4 Step 4(b) worksheet guide
shows how to enter them, and our
2026 federal tax withholding guide
covers the rest.
Bonuses Are Withheld Without Exemptions
Indiana tells employers to withhold on one-time payments, like a
bonus check, without WH-4 exemptions. The whole bonus is taxed at
2.95% plus your county rate, on top of federal withholding (usually
a flat 22% on separately paid bonuses) and FICA. See
why bonuses are taxed so high.
Working Across State Lines
Indiana has reciprocity with
Kentucky,
Michigan,
Ohio,
Pennsylvania and
Wisconsin
for state tax only. Indiana residents who work in one of those
states file that state's exemption form and pay Indiana state and
county tax at home. Indiana residents who work in Illinois pay
Illinois tax and claim a credit on their Indiana return.
Employer Payroll Costs in Indiana
Employers pay state unemployment tax
on the first $9,500 of each employee's wages. Most new employers
pay 2.5%, and rates for employers in good standing run from 0.5% to
7.4%. Employers also pay their share of Social Security and
Medicare and federal unemployment tax. None of it comes out of your
pay. At year-end, our
W-2 form generator
can use the same wage and withholding totals.
Why Your Actual Indiana Paycheck May Differ
This calculator is a close estimate, not your employer's payroll
run. The county on your WH-4, the exemptions you claimed, benefit
elections, year-to-date wages and a 27th biweekly payday in some
years can all move the result a little. If your county tax looks
wrong, check that your employer has your January 1 county, not your
current one.
Three-paycheck months
change monthly cash flow but not the tax on each check. For a full
checklist, see why your paycheck is lower than expected.
Official 2026 Indiana Payroll Sources
Payroll facts on this page are checked against
Departmental Notice #1
(county rates and exemptions effective January 1, 2026),
Information Bulletin #33
on nonresident withholding, the
Indiana minimum wage notice,
the DWD unemployment rate guide
and IRS Publication 15-T for 2026.
Reviewed September 24, 2026.
