What it costs to live and work in Indiana: the minimum wage, state income tax, sales tax and median rent, from official sources, and what they mean for your monthly budget.
| Indiana | Source | |
|---|---|---|
| Minimum wage | $7.25 an hour | US Department of Labor, Wage and Hour Division: State Minimum Wage Laws |
| State income tax | 2.95 % flat | Tax Foundation: State Individual Income Tax Rates and Brackets, 2026 (rates as of January 1, 2026) |
| State sales tax | 7 % | Tax Foundation: State and Local Sales Tax Rates, Midyear 2026 |
| Median gross rent | $1,104 a month (2024) | US Census Bureau, American Community Survey 2024 1-year estimates, table B25064 (Median Gross Rent) |
Indiana's minimum wage is $7.25 an hour, the same as the federal minimum.
Indiana's flat rate fell from 3 % to 2.95 % on January 1, 2026, and is scheduled to drop to 2.9 % in 2027.
The sales tax is 7 %, with no local sales taxes.
What income does rent in Indiana take?
A common rule of thumb is to keep rent at or below 30 % of gross income. At the median rent of $1,104 a month, that means a household income of about $44,200 a year before tax.
Good to know
- Counties levy their own income taxes on top of the state rate (0.35 % of income on average).
Sources
- US Department of Labor, Wage and Hour Division: State Minimum Wage Laws (2026-07-01)
- Tax Foundation: State Individual Income Tax Rates and Brackets, 2026 (rates as of January 1, 2026) (2026-02-19)
- Tax Foundation: State and Local Sales Tax Rates, Midyear 2026 (2026-07-06)
- US Census Bureau, American Community Survey 2024 1-year estimates, table B25064 (Median Gross Rent) (2025-09)