Ohio Wage and Payroll Tax Facts
June 16, 2023
Having to comply with unique state taxes and wage laws can make processing payroll doubly daunting. Here’s everything you need to know about these rates and laws for the state of Ohio.
Ohio uses a slightly higher minimum wage rate for organizations that meet a certain criterion, but for those that don’t, the federally mandated wage rate is applied. It also has a few reciprocal agreements with other states to provide tax relief for citizens who work and live in different states.
When it comes to processing payroll, Ohio-based organizations must handle the following taxes in addition to those required by the federal government:
- Personal Income (a.k.a. State Income Tax)
- State Unemployment Insurance (SUI)
- Local income taxes
The below information was last updated June 16, 2023. It is not intended as legal or tax advice.
Ohio Minimum Wage Rates
|
Wage Type |
Ohio Rates |
Federal Rates |
|
Minimum Wage |
$10.10 (annual gross receipts are $372,001 or more) |
$7.25 |
|
Tipped Minimum Wage |
$5.05 (annual gross receipts are $372,001 or more) |
$2.13 |
|
Actual Tip Credit |
$5.05 (annual gross receipts are $372,001 or more) |
$5.12 |
|
Wage Type |
Ohio Rates |
Federal Rates |
|
Minimum Wage |
$10.10 (annual gross receipts are $372,001 or more) |
$7.25 |
|
Tipped Minimum Wage |
$5.05 (annual gross receipts are $372,001 or more) |
$2.13 |
|
Actual Tip Credit |
$5.05 (annual gross receipts are $372,001 or more) |
$5.12 |
Ohio State Income Tax (SIT) Rates
Ohio has several tax brackets and different versions of those brackets based on an employer’s pay frequency. Refer to the state’s Employer Withholding page for specifics on these brackets and their corresponding rates.
|
Additional Ohio SIT Details |
|
|
Supplemental Withholding Computation |
3.5% |
|
Valid Filing Statuses |
|
|
Exemptions |
Number of allowances |
|
Form W-4 |
|
|
Reconciliation Frequency |
Annual |
|
Additional Ohio SIT Details |
|
|
Supplemental Withholding Computation |
3.5% |
|
Valid Filing Statuses |
|
|
Exemptions |
Number of allowances |
|
Form W-4 |
|
|
Reconciliation Frequency |
Annual |
Ohio State Unemployment Insurance (SUI) Rates
SUI provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined by state law) and meet the state’s eligibility requirements.
|
Ohio SUI Tax Details |
|
|
Taxable Wage Base |
$9,000 |
|
Employee Subject to Tax |
No |
|
Rates for Experienced Employers |
0.3% – 9.8% |
|
Rates for New Employers |
2.7% |
|
Effective Period |
Calendar Year |
|
Voluntary Contributions Allowed |
Yes; must be made by December 31 following the tax year computation date |
|
Ohio SUI Tax Details |
|
|
Taxable Wage Base |
$9,000 |
|
Employee Subject to Tax |
No |
|
Rates for Experienced Employers |
0.3% – 9.8% |
|
Rates for New Employers |
2.7% |
|
Effective Period |
Calendar Year |
|
Voluntary Contributions Allowed |
Yes; must be made by December 31 following the tax year computation date |
Ohio State Disability Insurance (SDI) Rates
SDI benefits are funded by employees through mandatory payroll deductions from each paycheck. Ohio, however, doesn't require employers to collect an SDI tax.
Miscellaneous Ohio Tax Information
Reciprocal Agreement(s)
Reciprocal agreements are when workers only pay taxes in the state where they live, not the state where they work. Ohio currently has reciprocal agreements with the following states:
- Indiana
- Kentucky
- Michigan
- Pennsylvania
- West Virginia
Employers in Ohio and these states must withhold income tax from the state of the employee’s residency.
Nonresident employees working in Ohio must present employers with a completed Form IT-4-NR (Employee’s Statement of Residency in a Reciprocity State) to claim exemption from withholding.
Nonresident working in Ohio under the reciprocal agreements can have withholdings for home states taken from wages, provided the agency has adopted a rule authorizing such a deduction.
Paid Sick Leave (PSL)
The state of Ohio doesn't require employers to collect PSL taxes, nor does the state have a program providing paid sick leave to employees.
Local Taxes
In addition to the state-wide taxes mentioned above, over 500 cities and villages in Ohio have local income taxes for their residents. Rates for these taxes vary by location, but the state’s Department of Taxation oversees and collects the funds from these taxes to support various municipal services, such as fire departments and public works.
The Regional Income Tax Agency (RITA) and Central Collection Agency (CCA) are two large collectors of this tax but don't collect it for all municipalities. Refer to the state’s Municipal Income Taxes page for more specific information.
Ohio Employer Registration
The agencies below can help with your state-based employer registration, including best practices, account numbers, and unemployment information. Contact the Department of Taxation for withholding tax topics and the Department of Job & Family Services for unemployment tax topics.
|
Registration Details |
Department of Taxation |
Department of Job & Family Services |
|
Phone |
(888) 405-4089 | (614) 466-2319 |
|
Online Registration |
http://business.ohio.gov/ | https://thesource.jfs.ohio.gov/ |
|
Registration Form |
Form JFS-20100 | |
|
Registration Instructions |
Online and phone registrations are available. Account numbers will be issued during the online process. | Online and phone registrations are available. Account numbers will be issued during the online process or 4-6 weeks later by mail. |
|
Employer Self-Service Login |
Ohio Business Gateway | https://thesource.jfs.ohio.gov/ |
|
Registration Details |
Department of Taxation |
Department of Job & Family Services |
|
Phone |
(888) 405-4089 | (614) 466-2319 |
|
Online Registration |
http://business.ohio.gov/ | https://thesource.jfs.ohio.gov/ |
|
Registration Form |
Form JFS-20100 | |
|
Registration Instructions |
Online and phone registrations are available. Account numbers will be issued during the online process. | Online and phone registrations are available. Account numbers will be issued during the online process or 4-6 weeks later by mail. |
|
Employer Self-Service Login |
Ohio Business Gateway | https://thesource.jfs.ohio.gov/ |
Additional Ohio Payroll Tax Resources
This information is provided as a courtesy and may be updated at any time. It is not intended as legal or tax guidance. If you have questions or concerns, we encourage you to seek the advice of a qualified CPA, Tax Attorney, or Advisor.
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