How does Indiana local income tax work?

Indiana has 92 counties, each levying its own Local Income Tax (LIT). The rate that applies is your COUNTY OF RESIDENCE ON JANUARY 1 of the tax year — even if you move mid-year. Marion County (Indianapolis) is currently 2.02% (verify with the Indiana Department of Revenue).

What about the IN state rate?

Indiana is a flat-tax state, currently 3.05% (verify with Indiana DOR; the legislature is gradually reducing the flat rate). The LIT applies on top of the flat state rate.

I moved from Hamilton County to Marion County in March — which rate applies?

Your county on January 1 applies for the whole year. If you were a Hamilton County resident on Jan 1, you pay Hamilton County rates all year regardless of when you moved. Reverse if you were in Marion on Jan 1. Verify with your employer or DOR if there is any doubt; this is residence-based, not pro-rated.

Does the calculator include the Marion County line?

The PayslipIQ Paycheck Calculator handles federal, FICA, and Indiana state flat in the main tool. For the Marion County LIT specifically, use the Local Tax Estimator below: select "Indiana county tax" and enter 2.02%.

Other Indianapolis-area county rates?

Hamilton County ~1.1%, Hancock ~1.94%, Hendricks ~1.7%, Johnson ~1.4%, Madison ~2.25%, Morgan ~2.72%, Shelby ~1.6%. Confirm exact current rates with Indiana DOR before relying on a number.

USA · INDIANAPOLIS · 2026 · Educational only

Indianapolis Paycheck Calculator

Indianapolis sits in Marion County, currently a 2.02% local income tax. Indiana state flat 3.05% applies first. Marion County rate is residence-based, anchored to where you lived on January 1.

Reviewed by PayslipIQ Editorial Team, in-house payroll editor

Last reviewed May 2026 · Editorial standards

Step 1 — federal + FICA + Indiana flat 3.05%

Paycheck calculator

Enter gross, state, and filing status. Estimates only.

Gross pay (per period)Pay frequencyStateFiling statusPre-tax deductions / period (401k, HSA, etc.)Post-tax deductions / period (Roth, garnishments, etc.)

Estimated take-home (per period)

$2,358.62

Estimated take-home (annual): $61,324.00

Gross pay$3,000.00

Pre-tax deductions-$0.00

Federal income tax-$320.38

Social Security (6.2%)-$186.00

Medicare (1.45%)-$43.50

Indiana state tax-$91.50

Post-tax deductions-$0.00

Net (take-home)$2,358.62

Educational only, not tax, legal, financial, or payroll advice. Verify with your payroll team, a CPA, the IRS, or your state tax authority.

Step 2 — add Marion County LIT

Select "Indiana county tax" below and enter 2.02% for Marion County. Different IN counties have different LIT rates; check yours.

Local tax estimator

Gross pay this paycheck

Locality

Local tax this paycheck

$116.28

Effective rate

3.88%

Annualised local tax

$3023

NYC resident income tax (top marginal). Nonresidents who work in NYC do not pay this.

Estimate only. Local income tax rules vary by residency, work location, school district, and special assessments. Some localities (NYC, Yonkers) tax residents but not commuters; others (KC, STL, Wilmington) tax both. Verify with the city revenue agency or your payroll team before relying on a number. This calculator does not include state income tax, federal income tax, Social Security, or Medicare. Pair it with theGross to Net Paycheck Calculatorfor a complete picture.

Source

Marion County LIT and all Indiana county rates. Source: Indiana Department of Revenue.

Common questions

How does Indiana local income tax work?: Indiana has 92 counties, each levying its own Local Income Tax (LIT). The rate that applies is your COUNTY OF RESIDENCE ON JANUARY 1 of the tax year — even if you move mid-year. Marion County (Indianapolis) is currently 2.02% (verify with the Indiana Department of Revenue).
What about the IN state rate?: Indiana is a flat-tax state, currently 3.05% (verify with Indiana DOR; the legislature is gradually reducing the flat rate). The LIT applies on top of the flat state rate.
I moved from Hamilton County to Marion County in March — which rate applies?: Your county on January 1 applies for the whole year. If you were a Hamilton County resident on Jan 1, you pay Hamilton County rates all year regardless of when you moved. Reverse if you were in Marion on Jan 1. Verify with your employer or DOR if there is any doubt; this is residence-based, not pro-rated.
Does the calculator include the Marion County line?: The PayslipIQ Paycheck Calculator handles federal, FICA, and Indiana state flat in the main tool. For the Marion County LIT specifically, use the Local Tax Estimator below: select "Indiana county tax" and enter 2.02%.
Other Indianapolis-area county rates?: Hamilton County ~1.1%, Hancock ~1.94%, Hendricks ~1.7%, Johnson ~1.4%, Madison ~2.25%, Morgan ~2.72%, Shelby ~1.6%. Confirm exact current rates with Indiana DOR before relying on a number.

Indiana Paycheck Guide

IN flat 3.05% + all 92 county rates.

All US Local Paycheck Taxes

NYC, Yonkers, Indianapolis, Cleveland, and more.

PayslipIQ provides educational information and estimated calculations only. It does not provide tax, legal, financial, accounting, employment, benefits, or payroll advice. PayslipIQ is not a CPA firm, law firm, financial advisor, payroll provider, or tax authority. Always verify your paycheck, deductions, withholdings, and tax position with your employer's payroll department, a qualified CPA, the IRS, your state tax authority, or another appropriately qualified professional. Calculations are estimates; your actual paycheck may differ based on factors specific to your employer, location, benefits elections, and personal tax situation.

Frequently asked questions