Indiana paychecks in 2026: what changed
Indiana's state income tax rate went down for 2026.
The changes
- New federal withholding tables. The IRS updated Publication 15-T for 2026, including changes from the 2025 tax law. The standard deduction is $16,100 single, $32,200 married filing jointly, and $24,150 head of household.
- Social Security wage base: $184,500 (up from $176,100). If you earn more, Social Security stops later in the year.
- Tips and overtime deductions for 2025–2028 — see below.
- State income tax: 2.95%, down from 3%. The law sets it at 2.9% from 2027.
- Exemptions: $1,000 personal, $1,500 additional dependent, $3,000 adopted child.
- County rates are listed in Departmental Notice #1, effective January 1, 2026.
- Minimum wage: still $7.25.
Tips and overtime in 2026
New federal deductions apply for 2025 through 2028: up to $25,000 for qualified tips, and up to $12,500 ($25,000 for joint filers) for the extra "half" of time-and-a-half overtime. Both phase out above $150,000 of income ($300,000 joint).
These are deductions on your tax return. Your employer still takes Social Security and Medicare out of tips and overtime, and still withholds income tax unless you tell it otherwise. If you expect to claim them, you can put the expected amount in Step 4(b) of your W-4 (and in the Step 4(b) box above) so less income tax is withheld during the year.
Work out your 2026 Indiana paycheck →
Other Indiana calculators
Paycheck calculator · Hourly paycheck calculator · Salary paycheck calculator · What changed for 2026
Other states: Alabama · Alaska · Arizona · Arkansas · California · Colorado · Connecticut · Delaware · District of Columbia · Florida · Georgia · Hawaii · Idaho · Illinois · Iowa · Kansas · Kentucky · Louisiana · Maine · Maryland · Massachusetts · Michigan · Minnesota · Mississippi · Missouri · Montana · Nebraska · Nevada · New Hampshire · New Jersey · New Mexico · New York · North Carolina · North Dakota · Ohio · Oklahoma · Oregon · Pennsylvania · Rhode Island · South Carolina · South Dakota · Tennessee · Texas · Utah · Vermont · Virginia · Washington · West Virginia · Wisconsin · Wyoming
Sources
- IRS Publication 15-T (2026), Federal Income Tax Withholding Methods — Worksheet 1A and the annual percentage-method tables
- IRS Publication 15 (2026), Employer's Tax Guide — Social Security and Medicare rates
- Social Security Administration — 2026 wage base of $184,500
- IRS — tips and overtime deductions
- Indiana Department of Revenue — Departmental Notice #1, Withholding (R46 / 01-26, effective Jan. 1, 2026) — 2.95% state rate; $1,000 / $1,500 / $3,000 exemption constants; county rates; worked example
- Indiana Department of Revenue — Form WH-4, Employee's Withholding Exemption and County Status Certificate — personal, dependent, age 65/blind, additional dependent and adopted child exemptions; county of residence and work on January 1
- Indiana Code 6-3-2-1 — Individual income tax rate — 3% for 2025, 2.95% for 2026, 2.9% from 2027
- Indiana Code 6-3-1-3.5 — Adjusted gross income — starts from federal adjusted gross income
- Indiana Department of Workforce Development — Unemployment for employers FAQ — only employers pay into the unemployment insurance system
- Indiana Department of Labor — Indiana minimum wage poster — $7.25 since July 24, 2009; $2.13 tipped cash wage; overtime after 40 hours
- Indiana Code 22-2-5-1 — Frequency of wage payments — at least semimonthly, or biweekly if requested; wages to within 10 business days; quitting employees paid on the next regular payday
- Indiana Code 22-2-9-2 — Wages of separated employees — due at the regular payday for the pay period of separation
- Indiana Department of Labor — Online wage claim form