Average Salary in Indiana (IN)

Indiana has one of the lowest flat-rate state income taxes in the country at 3.05%, and a multi-year schedule will reduce it further to 2.9% by 2027 under legislation enacted in 2023. That tax structure, combined with a cost-of-living index of 90, is part of why the state consistently ranks as one of the most affordable places to live in the Midwest. The $67,173 median household income is below the national average, but effective purchasing power ranks well. The economy is a rare example of manufacturing strength that survived the 2000s intact: auto and parts manufacturing, RV production (Elkhart County produces over 80% of all RVs made in the US), and steel (the Gary–Hammond corridor still operates major US Steel and Cleveland-Cliffs mills). Eli Lilly, one of the largest pharmaceutical companies in the world, is headquartered in Indianapolis and is the state's largest private employer. Salesforce anchors a fast-growing tech-employment cluster in downtown Indianapolis. The $7.25/hour minimum wage remains at the federal floor. Counties also levy local income taxes ranging from roughly 0.5% to 3%, adding meaningfully to total tax burden depending on location. Full breakdown follows.