Income Reality in Indiana — Taxes, Housing & Salary
Very low flat tax, affordable housing, Midwest stability
Data: 2026-Q2 · BLS · HUD · KFFIncome tax overview
3.0% flat rate effective 2025 (HB1001; reduced to 2.95% in 2026)
Housing snapshot
Median 1BR rent in Indianapolis is approximately $1,100. Outside Indianapolis, rents drop to $700-$900 in cities like Fort Wayne, Evansville, and South Bend.
1BR FMR across major Indiana cities: $1,267 – $1,267/mo (HUD FY2026)
Cost of living summary
At an index of 88, Indiana is about 12% cheaper than the national average of 100.
Indiana combines a very low flat income tax with affordable housing and a stable manufacturing and healthcare economy. Indianapolis has grown significantly as a medical device and logistics hub.
Major cities
Purchasing power context
Indiana's 3% flat tax and low housing costs make it one of the highest purchasing-power states for middle-income earners.
Purchasing Power Reality
What your salary feels like in other cities
Salary reality examples
Comfortable in most Indiana cities. Very low tax and affordable housing make this stretch further than the number suggests.
Strong purchasing power. Indianapolis offers urban amenities at significantly below-average costs.
Excellent flexibility statewide. Indiana's low tax is a real advantage at this income level.
FAQ — Income Reality in Indiana
What is Indiana's income tax rate?
Indiana has a flat income tax rate of 3.0%, one of the lowest in the nation. This is a significant advantage for middle and high earners.
Is Indiana affordable?
Yes. Indiana has a cost of living index of 88, about 12% below the national average. Housing is especially affordable.
Cities in Indiana
Related tools
Cost of Living Index from C2ER. This is a picture, not a verdict.