Indiana Bonus Tax Calculator 2026
Indiana withholds 2.95% state tax plus your county's income tax rate from a bonus check, with no exemptions applied.
Bonus check calculator
State plus county, with no exemptions
Indiana withholds two taxes from a bonus: the state adjusted gross income tax at 2.95% for 2026 and the county income tax for the employee's county. Departmental Notice #1 (R47, effective October 1, 2026) explains that its exemption deduction tables are for regular periodic pay and that "for one-time or non-periodic payments, such as a bonus check, withholding should be computed without exemptions." In Marion County (2.02%) a $5,000 bonus carries $147.50 of state tax and $101.00 of county tax.
Which county you pay
County tax follows where you lived on January 1 of the tax year, not where you live when the bonus is paid. If you lived outside Indiana on January 1 but your principal place of work was an Indiana county on that date, that county's rate applies. Rates vary more than fourfold: the same bonus costs $25.00 in county tax in Porter County (0.5%), $55.00 in Hamilton County (1.1%) and $150.00 in Randolph County (3%).
Rates that changed in October
The October 2026 notice marks counties whose rate changed since the January 1, 2026 notice. Boone County's rate is now 1.71%; for an earlier 2026 bonus in Boone County the calculator asks for the rate your employer used instead of applying the new one backward. Indiana also exempts some nonresident employees who work in the state 30 days or fewer in a year from state and county withholding.
| Rule | 2.95% state + your county rate, with no exemptions |
|---|---|
| Valid through | December 31, 2026 |
| Documents | Departmental Notice #1 (R47 / 10-26) (Effective Oct. 1, 2026) |
| Agency | Indiana Department of Revenue |
| Federal income tax | −$1,100.00 |
| Social Security | −$310.00 |
| Medicare | −$72.50 |
| Indiana income tax | −$147.50 |
| Marion County tax | −$101.00 |
| Net | $3,269.00 |