Paycheck Calculator Indiana - IN

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Indiana - IN Paycheck Calculator: Hourly and Salary

So you're considering to move to Indiana to start a new business or a job career and wondering what would be the cost of your employment or earning as an employee than you must read this guide. This guide will give an overview of the thing you must know before moving to Indiana State along with complete details of what you are going to take home in a paycheck. And employers will also be assisted simultaneously for calculating the paycheck for their employees.


So let's get started!

Indiana, also known as "Crossroads of America" is located in the Midwestern and Great Lakes regions of North America. It is the 17th most populated state and 38th largest by the area compared to others across the nation.

This highly underrated state has wonderful opportunities and can provide a high-quality life at an affordable price. Cities like Bloomington, South Bend, and Carmel have tremendous scenic views, universities, job opportunities and act as economic hubs to Indiana.

Indiana is always ranked high for job and business opportunities due to its diverse economy that depends on chemicals, transportation, agriculture, automotive, healthcare, and pharmaceuticals. This state offers a minimum wage rate of $7.25 and a relatively lower state income tax rate of flat 3.23%. However, all counties of this state also charge local income tax.

The Hoosier State also offers quality education with nationwide ranked 4-star schools, colleges, and in-state universities, that would save you thousands of bucks, in contrast to getting out-of-state education.

Along with quality Income opportunities and Education, this state also has a lower cost of living, which is ranked as the fifth-lowest at 9%, in the United States. With the median house value of $132,304, median monthly rent price of $1,000 and comparatively lower property taxes, this place is crazy-affordable.

This State also offers plenty of outdoor activities and green spaces with numerous state parks like Indiana Dune National Park, plenty of relaxing resorts, hundreds of beautiful lakes and 25 miles of beaches to make your weekend memorable, fun and healthy.

So, after reading all the earlier mentioned perks, you would have made up your mind moving here. As our main focus is a paycheck, here are some of the tax facts followed by a detailed guide on how to calculate a take-home pay of an employee:


Indiana Tax Facts:

  • The Federal Minimum Wage rate and the Indian State Minimum Wage rate is the same $7.25 for covered no-exempted employees.
  • The Cash Minimum wage rate for the Tipped Employees is $2.13, with the maximum credit limit of $5.12.
  • Indiana Residents are subjected to Federal Income Tax, State Income Tax as well as Local Income Tax. The Federal Income Tax is charged at a progressive rate that ranges from 0% to 37%, depending on the income level and filing status. The Indiana State Income Tax is charged at a flat rate of 3.23%, regardless of filing status and income level. Moreover, a total of 92 counties and cities charge a local income tax, having different rates ranging from 0.1% to 3.13% that is mentioned in detail in this guide ahead.
  • Both Employers and Employees of Indiana also have to pay Federal FICA Taxes and FUTA Taxes that are also discussed in detail ahead.
  • Indiana Charges No State Disability Insurance (SDI) tax on employees. However, Employers are required to pay State Unemployment Insurance (SUI) Tax at the rate range from 0.5 - 7.4% on the first $9500 of the wage earned by each employee. However, New Employers are given relief as they only have to pay a flat rate of 2.5%.
  • The Median Household income of Indiana residents according to United States Census Bureau is $52,182.
  • The Unemployment Rate in Indiana is 3.2% (as in 2019).
  • The Livable Wage in Indiana for a Single Adult with no child is $11.07, and for A couple (one working) with one child is $17.79.
  • Indiana State is under the reciprocal agreement with five states. They are Michigan, Pennsylvania, Kentucky, Wisconsin, and Ohio.

How to calculate Take-Home Pay in Hawaii?

To calculate Take Home Pay or Paycheck, you need to go through several steps that include calculation of Gross Pay, Pre-Tax Deductions, Federal Taxes, State Taxes, Post Tax Deductions, Local Tax, etc.

To make it easy for you, we have divided this guide into steps, which would give a general idea. However, there may be some differences or additional taxes that you may be subjected to, according to your situation. As it's a comprehensive guide, we can only discuss general aspects.

Step 1 - Calculating Gross Pay:

  1. To calculate Gross Pay, first, you need to determine the Pay Type of an employee. It is whether an employee is paid on an hourly basis or salary basis.

Hourly Employees:

Hourly Base Employees are paid for each hour they work in a day or a week, at the mutually agreed hourly rate. However, the mutually agreed hourly rate must be as per the Federal and State Minimum Wage law.

Hourly Employees are also entitled to receive overtime, for each excess hours worked after Regular worked hours in a day or week. The overtime rate in most of the states is one and a half times the regular hourly rate.


Salaried Employees:

Salaried employees receive a fixed but mutually agreed on pay, for a decided pay frequency, usually semi-monthly or monthly. However, for gross payment determination for a pay period, the annual salary is divided by the pay frequency.

Most of the salaried employees are exempted from Overtime law. Therefore, they are not entitled to receive overtime, regardless of how many excess hours they work. However, some exceptional salaried employees may be eligible to receive overtime according to federal or state law.


  1. Remember, Supplementary Wages like bonuses, commissions, and paid leaves, as well as double time and fringe benefits, are also taxable wages. Therefore they must also be included in gross pay before federal and state tax calculation.

Step 2 – Subtracting Pre-Tax Deductions (If Any):

Pre-Tax Deduction is an amount deducted from employee's gross pay before any withholding tax is deducted. These deductions have several advantages, including the reduction of taxable wages. Hence, increasing the take-home pay of an employee. However, not all deductions can be considered as free from all taxes, which means some of the deductions may require certain taxes to be withheld.

Some of the standard Pre-tax deductions are:

  • Health Savings Accounts or FSA or HSA plans
  • Commuter Benefits
  • Healthcare Insurance
  • Short-Term Disability
  • Dental Insurance
  • Medical Expenses and Flexible Spending Accounts
  • Vision Benefits
  • Retirement funds like a traditional 401(k)

Note: Pre-Tax deduction rate changes from year to year, according to inflation and costs of living by the federal government. Therefore, you must keep yourself updated with all rates before making any deductions.


Step 3 – Calculate and Subtract Federal Taxes:

Federal Taxes are taxes deducted from almost every employee, regardless of which state or county they work in.

Federal Taxes are calculated according to the details provided by the employee on Form W-4, which comprises of income, filing status, number of dependents, number of allowances, number of jobs, etc.

The details are form W-4, are assessed and used by the employer to deduce the federal tax bracket, in which the employee's taxable wage lay upon.

Federal Taxes ranges from 0% to 37% have seven tax brackets, depending on filing status, income, and the number of allowances claimed. Below is the income tax details for the year 2019:

Single Filers
Taxable Income Rate
$0 - $9,525 10.0%
$9,525 - $38,700 12.0%
$38,700 - $82,500 22.0%
$82,500 - $157,500 24.0%
$157,500 - $200,000 32.0%
$200,000 - $500,000 35.0%
$500,000+ 37.0%

Married, Filing Jointly
Taxable Income Rate
$0 - $19,050 10.0%
$19,050 - $77,400 12.0%
$77,400 - $165,000 22.0%
$165,000 - $315,000 24.0%
$315,000 - $400,000 32.0%
$400,000 - $600,000 35.0%
$600,000+ 37.0%

Married, Filing Separately
Taxable Income Rate
$0 - $9,525 10.0%
$9,525 - $38,700 12.0%
$38,700 - $82,500 22.0%
$82,500 - $157,500 24.0%
$157,500 - $200,000 32.0%
$200,000 - $500,000 35.0%
$500,000+ 37.0%

Head of Household
Taxable Income Rate
$0 - $13,600 10.0%
$13,600 - $51,800 12.0%
$51,800 - $82,500 22.0%
$82,500 - $157,500 24.0%
$157,500 - $200,000 32.0%
$200,000 - $500,000 35.0%
$500,000+ 37.0%

Step 4 – Deduct FICA Taxes:

Along with Federal Withholding, employers are also required to withhold Federal Insurance Contributions Act (FICA) taxes from the employee's paycheck as well as pay a matching amount themselves to the IRS.

There are two types of FICA taxes:


  1. Social Security:

Employers are entitled to withhold 6.2% from the first $132,900 (wage base limit for 2019), taxable wages earned by the employee. Moreover, the employer is also required to pay an equal amount to the IRS for each employee.


  1. Medicare:

Medicare tax is another type of FICA Tax that an employer must withhold from the taxable gross wage of the employee, at the rate of 1.45%. Unlike social security, there is no wage base limit. However, if the employee earns more than the defined threshold than he/she is subjected to an additional 0.9% of the Additional Medicare Tax rate, for every dollar earned above the threshold amount.

Like Social Security, IRS also requires the employer to pay an equal amount of Medicare tax for each employee.


Step 5 – Payment of FUTA Taxes

The Federal Unemployment Tax Act (FUTA) is a tax that the IRS requires the employer to pay without deducting anything from the employee's paycheck.

The FUTA Tax rate for 2019 is 6.0% of the first taxable wage up to $7000 of an employee. However, once the taxable wage limit is crossed for a particular employee, then the employer no longer has to pay this tax.


What to reduce FUTA Tax?

Yes! Then you must pay State Unemployment Insurance (SUI) tax in full and on time and get a FUTA tax credit of up to 5.4%. Which means, you saved a whopping 90% from FUTA Tax.


Step 6 – Subtract Post-Tax Deductions (If any):

Although, employers are not required to withhold any amount as a post-tax deduction, unless if an employee voluntarily asks to do so. However, there are some deductions ordered by the court like child support or wage garnishment, which the employer is entitled to deduct.


Step 7 – Withhold Indiana State Payroll Taxes:

As we have calculated Federal Payroll taxes, now it's time to calculate Indiana State Payroll Taxes. The State requires the employer to pay some taxes himself and rest to withhold from the employee's paycheck. Following are the State payroll taxes that usually most of the employers and employees pay:


Indiana State Income Tax

The state requires the employer to withhold the Indiana State income tax from the employee's paycheck, according to the details provided by the employee on Form WH-4, which contain all the necessary details of the employee such as filing status, a number of allowances to claim, etc. This form is filled by the employee at the starting of the job. The employee must ensure that the form is updated regularly when any significant event occurs like marriage, divorce or child's birth.

The employee working in Indiana are taxed at a flat income tax rate of $3.23, regardless of filing status and income level. Unlike some other states, Indiana state taxes the supplemental wage and bonuses at the same rate as the regular wage.

Note: Employees are suggested to study and deduce the optimal number of Allowances to claim from Indiana State tax, as these allowances can significantly affect your take-home pay. Remember choosing more than requires a number of allowances may lead to underpayment of taxes that may lead to a penalty. On the other hand, choosing less than the required number of allowances will cause your paycheck amount to reduce, as you will be lending tax-free money to the state for a whole year.


State Unemployment Insurance (SUI) Tax:

Besides, State income tax, Indiana State also entitles the employers to pay State Unemployment Insurance (SUI) Tax at the rate range from 0.5% to 7.4% on the first $9500 earned by each of their employees. However, New Employers are given relief to pay on a flat rate of 2.5% for wages earned by each employee.


Step 8 – Withhold Local Tax:

Along with Federal Taxes and State Taxes, Indiana residents and non-residents are also subjected to local income tax. These taxes are charged according to the county in which they are working. The following table shows the county names and their tax rates:


Indiana Local Tax Rates
County Resident and Nonresident Local Tax Rate
Adams 1.6240%
Allen 1.4800%
Bartholomew 1.7500%
Benton 1.7900%
Blackford 1.5000%
Boone 1.5000%
Brown 2.5234%
Carroll 2.0733%
Cass 2.5000%
Clark 2.0000%
Clay 2.2500%
Clinton 2.2500%
Crawford 1.0000%
Daviess 1.5000%
Dearborn 0.6000%
Decatur 2.3500%
DeKalb 2.1300%
Delaware 1.5000%
Dubois 1.0000%
Elkhart 2.0000%
Fayette 2.3700%
Floyd 1.3500%
Fountain 2.1000%
Franklin 1.5000%
Fulton 2.3800%
Gibson 0.7000%
Grant 2.2500%
Greene 1.7500%
Hamilton 1.0000%
Hancock 1.7000%
Harrison 1.0000%
Hendricks 1.5000%
Henry 1.5000%
Howard 1.7500%
Huntington 1.7500%
Jackson 2.1000%
Jasper 2.8640%
Jay 2.4500%
Jefferson 0.3500%
Jennings 2.5000%
Johnson 1.0000%
Knox 1.0000%
Kosciusko 1.0000%
LaGrange 1.6500%
Lake 1.5000%
LaPorte 0.9500%
Lawrence 1.7500%
Madison 1.7500%
Marion 2.0200%
Marshall 1.2500%
Martin 1.7500%
Miami 2.5400%
Monroe 1.3450%
Montgomery 2.3000%
Morgan 2.7200%
Newton 1.0000%
Noble 1.7500%
Ohio 1.2500%
Orange 1.7500%
Owen 1.3000%
Parke 2.6500%
Perry 1.8100%
Pike 0.7500%
Porter 0.5000%
Posey 1.2500%
Pulaski 3.3800%
Putnam 2.0000%
Randolph 2.2500%
Ripley 1.3800%
Rush 2.1000%
Scott 2.1600%
Shelby 1.5000%
Spencer 0.8000%
St. Joseph 1.7500%
Starke 1.7100%
Steuben 1.7900%
Sullivan 0.6000%
Switzerland 1.0000%
Tippecanoe 1.1000%
Tipton 2.6000%
Union 1.7500%
Vanderburgh 1.2000%
Vermillion 1.5000%
Vigo 2.0000%
Wabash 2.9000%
Warren 2.1200%
Warrick 0.5000%
Washington 2.0000%
Wayne 1.5000%
Wells 2.1000%
White 1.3200%
Whitley 1.4829%

Step 9 – Calculate Pay Check:

Once you are done with all elements (steps) discussed earlier, you will have a net pay amount for each employee. Now all you have to do is pay employees on time. Also, to file all Federal Taxes, State Taxes, FICA, and FUTA taxes on time, to avoid any penalties.


Indiana State and Federal Payroll Laws:

  • The state requires the employer to maintain at least a semi-monthly pay frequency, which is twice a month. Moreover, the employee can also request for bi-weekly pay frequency. However, salaried employees are exempted from this pay frequency law.
  • Indiana requires employers to pay their employees with at least the minimum wage rate of $7.25. Moreover, for tipped employees the state also requires the employer to pay them at least the wage equal to minimum wage rate when base tipped wage of $2.13 is combined Tips earned.
  • The State also requires the employer to pay 1 and half times the regular hourly rate for every extra hour worked after 40 hours in a workweek. However, there are some exemptions to this law which can be found in at Indiana Code § 22-2-2-3 (a) – (p).
  • Employees working in Indiana of age under 20, can be paid with the minimum wage rate of $4.25 for the first 90 days of training or employment.
  • Federal and State law doesn't require the employer to pay if an employee works for more than 8 hours in a day, as overtime law is only applicable for hours above 40 hours in a workweek.
  • State Law requires the employer to provide two or at least one meal, lunch break or rest break of 30 minutes to the employees of age below eighteen if the work is of 6 or more consecutive hours. However, there is no such provision under federal and state law for meals and lunch breaks for the employees of age above eighteen. If the employer wants to volunteers the meals and lunch break then it must be PAID for 20 minutes or less duration OR it must be UNPAID if above 30 minutes.
  • The State doesn't require the employer to provide vacation benefits, either paid or paid to the employees. However, If they are willing to do so than it must be according to the terms and conditions established bt the company or employment contract.
  • Supplemental Wages like bonuses and commissions are also subjected to state income tax at the rate of $3.23% on adjusted gross wages.
  • All salaries, wages, as well as supplemental wages earned by the Indiana residents in the states including Ohio, Michigan, Pennsylvania, Kentucky, and Wisconsin, must be reported as if they were earned in Indiana, due to the reciprocal agreement between the earlier mentioned states.
  • Indiana State doesn't regulate sick leaves, holidays, vacations, Jury Duty Leave and Voting Leave. Moreover, it doesn't require the employer to provide severance pay to their employees.

FAQs

Answer: Indiana State charges a flat rate of 3.23% of Income-tax, regardless of income level and filing status. Besides, different counties in Indiana also charge a local income tax, ranging from 0.35% to 3.38%. Moreover, Indiana residents are also subjected to Federal Income tax and FICA tax.

Answer: Indiana residents are charged with federal income tax, on progressive rates that range from 0% to 37%, depending on the filing status and income level. Moreover, they are also entitled to pay other federal payroll taxes like FICA taxes that comprise of Social Security (6.2%) and Medicare (1.45%).

Answer: Indian State a moderately tax-friendly state especially for retirees. The state's average effective sales tax rate is 7% and the property tax rate is 0.87% is low as compared to other states. Whereas, Social Security income is exempted from state income tax with a flat rate of 3.23%. However, most of the other incomes are not exempted. The Indiana Residents are also charged with a local income tax with a rate range from 0.35% to 3.38%, depending on which county they are working in.

Answer: Residents and non-residents employees and employers of Indiana are charged with the following payroll taxes:

  • Federal Income Tax: This tax is to be paid by the employees, at the progressive rate ranging from 0% to 37%, depending on the filing status and income level.
  • FICA Tax: This is another tax charged by the federal to both employers and employees. This tax comprises of two taxes; Social Security of 12.4% (6.2% is to be paid by the employee, and the matching 6.2% is paid by the employer for each employee) and Medicare Tax of 2.9% (1.45% is to be paid by the employee, and the matching 1.45% is paid by the employer for each employee). An additional Medicare tax of 0.9% may also be charged to the employee if the annual income is above the defined income level bracket.
  • State Income Tax: Indiana State charges income tax on a flat rate of 3.23% on Indiana residents, regardless of income level and filing status. This tax is to be withheld from the employee's paycheck by the employer for the state.
  • SUI Tax: State Unemployment insurance Tax is to be paid by the employer at the rate range from 0.5% to 7.4%, on the first $9500 earned in wages by each employee. However, new employers only have to pay at a flat rate of 2.5%.
  • Local Income Tax: Besides, State Income Tax, the 92 counties in Indiana also charge a Local Income Tax on the employee that ranges from 0.35% to 3.38%, depending on which county they are working in.

Answer: The average weekly wage in Indiana (in 2019) is around $1200, according to the U.S. Bureau of Labor Statistics.

Answer: Livable wage for a single adult is $11.07, for a couple (one working) with one child is $17.79 and for a couple (both working) with two children is $15.15.

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