- Business card
- Business class
- Business ideas
- Business license
- Business management
- Business park
- Business plan
- Business school
- Business solutions
- Financial aid
- Financial group
- Financial management
- Financial services
- Financial statements
- Home business
- Personal Finance
- Savings account
- Small business
- Wealth management
Indiana Paycheck CalculatorHow helpful was this page in answering your question?
Thank you for your answer! Your feedback is very important to us.
Photo credit: ©iStock.com/csfotoimages
Indiana Paycheck Quick Facts
Employers will withhold federal and FICA taxes from your paycheck. Medicare and Social Security taxes together make up FICA taxes. Employers withhold 1.45% in Medicare taxes and 6.2% in Social Security taxes per paycheck, and also match this amount for a total contribution of 2.9% and 12.4% respectively. Note that if you are self-employed, you need to pay that total yourself. Additionally wages that exceed $200,000 are subject to a 0.9% Medicare surtax.
The IRS receives the federal taxes withheld from your wages and puts them toward your annual income taxes. The amount of federal taxes taken out depends on the information you provided on your W-4 form. Remember whenever you start a new job or need to make changes, you’ll need to fill out a new W-4. How many allowances you are eligible for and how many you claim on your W-4 affects how much you will pay in taxes each pay period.
Your marital status is one factor that affects your allowances and also your filing status (whether you are married and file jointly or separately). If you have qualifying dependents that also plays a role in how many allowances you can claim. The more allowances you take, the less you will pay in taxes and the bigger your paychecks will be, but be very careful about claiming too many allowances and underpaying your taxes all year long. If you do this, you will be hit with a big bill come April and you could even face penalties for underpaying.
It’s also worth noting that if you have more than one job, you cannot claim the same allowances for both. So say for example you have two allowances that you want to claim and also two jobs. You can claim one allowance for each job or you could claim both with one job and none for the other.
|Year||Median Household Income|
Residents of Indiana are taxed at a flat state income rate of 3.3%. That means no matter how much you make, you’re taxed at the same rate. Hoosiers can rejoice, as the tax rate is set to go down to 3.23% in 2017.
All counties in Indiana impose their own local income tax rates in addition to the state rate that all employees must pay. Indiana counties’ local tax rates range from 0.3% to 3.38% for residents. Non-residents are taxed differently and those rates are from 0.15% to 1.24%. Check out the table provided below for Indiana county tax rates for residents and nonresidents.
|County||Resident Local Tax Rate||Nonresident Local Tax Rate|
|St. Joseph County||1.7500%||0.73750%|
How You Can Affect Your Indiana Paycheck
If you received a large tax refund or if you were hit with a massive tax bill when you filed your income taxes, you may want to consider changing your withholdings on your W-4. If you owed a lot in taxes, you may be claiming too many allowances. This is an easy fix as you can fill out a new W-4 with fewer allowances. Alternatively, you can have a dollar amount withheld from every paycheck. You can do this by specifying how much you want taken out of each paycheck on the correct line on your W-4.
If you think your paychecks are on the small side and you received a large refund at tax time, you can look into whether there are additional allowances that you can claim. Some people may like getting a big refund every April, but others may prefer to have access to that money throughout the year or to have the choice to invest and possibly grow that money for a year. If you are consistently over-paying your taxes, that’s like giving Uncle Sam a tax-free loan each year.
Pre-tax contributions are another factor that affect the size of your take-home pay. You can actually lower your taxable income by taking advantage of certain benefits that your employer may offer. For example, if you have the option of putting money into a 401(k) or 403(b) retirement account, or a Health Savings Account or Flexible Spending Account, that money will come out of your paycheck pre-tax and could help lessen how much you owe to Uncle Sam.
|Year||Top Income Tax Rate|
SmartAsset's interactive map highlights the mot paycheck friendly counties across the country. Zoom between states and the national map to see data points for each region, or look specifically at one of the four factors driving our analysis: Semi-Monthly Paycheck, Purchasing Power, Unemployment Rate, and Income Growth.
Methodology Our study aims to find the most paycheck friendly places in the country. To find these places we considered four different factors: semi-monthly paycheck, purchasing power, unemployment rate, and income growth.
First, we calculated the semi-monthly paycheck for a single individual with two personal allowances, applying relevant deductions and exemptions before calculating income tax withholding. To better compare withholding across counties we used $50,000 annual income. We then indexed the paycheck amount for each county to reflect the counties with the lowest withholding burden.
We then created a purchasing power index for each county. This reflects the counties with the highest ratio of household income to cost of living. We also created an unemployment rate index that reflect the counties with the lowest unemployment. For income growth, we calculated the annual growth in median income over five years for each county and indexed the results.
Finally, we calculated the weighted average of the indices to yield an overall paycheck friendliness score. We used a one half weighting for semi-monthly paycheck and a one-sixth weighting for purchasing power, unemployment rate and income growth. We indexed the final number so higher values reflect the most paycheck friendly places.
Sources: SmartAsset, government websites, US Census Bureau 2014 & 2009 5-Year American Community Survey, MIT Living Wage Study, Bureau of Labor Statistics