Overview of Ohio Taxes
Ohio has a progressive income tax system with four tax brackets. Rates range from 0% to 3.75%. For all filers, the lowest bracket applies to income up to $26,050 and the highest bracket applies to income above $115,300. There are more than 400 Ohio cities and villages that add a local income tax in addition to the state income tax.
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Ohio Paycheck Calculator
Ohio Paycheck Quick Facts
- Ohio income tax rate: 0% - 3.75%
- Median household income: $66,990 (U.S. Census Bureau)
- Number of cities and villages that have local income taxes: 439
How Your Ohio Paycheck Works
Calculating your paycheck is tough to do (without a paycheck calculator) because your employer withholds multiple taxes from your pay. The calculations are even tougher in a state like Ohio, where there are state and often local income taxes on top of the federal tax withholding.
First of all, no matter what state you live in, your employer withholds 6.2% of your earnings for Social Security taxes and 1.45% of your earnings for Medicare taxes. Your employer will also match your contributions. Together, Medicare and Social Security taxes are referred to as FICA taxes. (They will probably appear under that name on your pay stubs.) Any earnings you make in excess of $200,000 are subject to an additional 0.9% Medicare tax if you're a single filer, head of household or qualifying widow(er). Married couples filing jointly pay this tax on earnings that exceed $250,000, while married couples filing separately pay it on wages above $125,000. Your employer does not match your payment of this surtax.
In addition to FICA taxes, your employer will also withhold federal income taxes from your earnings. This withholding will depend on things like your income, filing status and number of dependents and exemptions. Employees must fill out Form W-4 to indicate any changes to these factors. The recently updated version of Form W-4 no longer uses allowances. Instead, it features a five-step process that lets you enter personal information, claim dependents and indicate any additional income or jobs.
Your marital status will indirectly affect your paycheck size because it will affect your tax filing status. It can also affect your paycheck if you pay more in health insurance premiums to cover a spouse or children. These premiums will be deducted from each of your paychecks.
If you make pre-tax contributions to a 401(k), a flexible spending account or a pre-tax commuter card, those contributions will come out of your earnings. Because they are pre-tax (which means they come out of your pay before income tax is applied) these contributions will also lower your taxable income. Your paychecks will be smaller, but less of your money will go to the government.
A financial advisor can help you understand how taxes fit into your overall financial goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
When you look at your Ohio paycheck, you’ll see the federal withholding as described above, plus any additional withholdings that you may have set up, such as for your 401(k) contributions or health insurance premiums. But you’ll also see a withholding for state taxes. Because Ohio collects a state income tax, your employer will withhold money from your paycheck for that tax as well.
As mentioned above, Ohio state income tax rates range from 0% to 3.75% across four brackets, down from five brackets in previous years. The top tax rate of 3.99% also decreased in 2023, dropping to 3.75%. The same brackets apply to all taxpayers, regardless of filing status. The first bracket covers income up to $26,050, while the highest bracket covers all income over $115,300.
Many cities and villages in Ohio levy their own municipal income taxes. In fact, 439 municipalities have their own income taxes. That means chances are good that your wages will be subject to a local income tax rate.
Local rates range from 0.50% to 3%. They’re referred to as RITA taxes, named after the Regional Income Tax Agency. If you live in one city and work in another, you may be eligible for a tax credit to offset some of what you owe in RITA taxes.
To calculate RITA withholding, Ohio employers will compare the workplace tax rate to the credit rate of the employee’s home municipality. The process is a bit complicated. If you are a business owner or self-employed, it’s important to calculate RITA taxes accurately. (You might want to seek some professional help, such as from a financial advisor, to make sure you don’t make mistakes.) Penalties and interest will accrue if you file RITA taxes incorrectly or fail to file.
However, if you employ a domestic worker in your home, you do not have to withhold Ohio municipality taxes from his or her paycheck. (But you should still pay federal "nanny taxes," including FICA taxes and the federal unemployment tax.)
How You Can Affect Your Ohio Paycheck
If you want a bigger Ohio paycheck, there are several steps you can take. For starters, you can fill out a new W-4 form so that you can adjust your withholdings. This can decrease the amount your employer withholds and thus make each paycheck bigger. Just remember that you might have a bill during tax season if you don’t withhold enough throughout that year. Another option to increase the size of your Ohio paycheck is to seek supplemental wages, such as commissions, overtime, bonus pay, etc. The tax withholding rate on supplemental wages is a flat 3.5%.
On the other hand, you may want to shrink the size of each paycheck for tax reasons. If you’re getting a big tax bill every year, you might want to fill out a new W-4 form and request additional withholding. You can also specify a dollar amount to withhold from each paycheck in addition to what your employer is already withholding. There is a line on the W-4 where you can write in any additional withholding you want. If you’re unsure how much to write in, use the paycheck calculator to get an idea of what your tax liability is. The end result of requesting an additional withholding is receiving smaller paychecks, but you may have a smaller tax bill or even a refund come tax season.
You can also lower your taxable income by saving more in a 401(k), 403(b), HSA or FSA. As mentioned earlier, these accounts provide tax savings while also helping you save for the future. Of course, the taxes you pay in Ohio depend in part on where you live. If you’re looking to buy a home in the Buckeye State, our Ohio mortgage guide is a good place to start. It has mortgage rates and other important details you need to know when buying a home or refinancing a mortgage.
