Overview of Ohio Taxes
Ohio has a progressive income tax system with eight tax brackets. Rates range from 0% to 4.797%. For all filers, the lowest bracket applies to income up to $21,750 and the highest bracket only applies to income above $217,400. There are more than 600 Ohio cities and villages that add a local income tax in addition to the state income tax.
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- Our Tax Expert
Jennifer Mansfield, CPA Tax
Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
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Ohio Paycheck Calculator
Ohio Paycheck Quick Facts
- Ohio income tax rate: 0% - 4.797%
- Median household income: $54,533 (U.S. Census Bureau)
- Number of cities and villages that have local income taxes: 643
How Your Ohio Paycheck Works
Calculating your paychecks 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 that adds state and often local income taxes on top of 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 that your employer does not match.
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. Because of President Trump's 2017 tax plan, withholding calculations for the federal income tax changed slightly during the 2018 tax year. There weren't any changes in 2019, but the 2020 W-4 has been revised. More specifically, it 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. If you were hired before 2020, you won't need to complete the form unless you're adjusting your withholdings or changing jobs. All employees hired as of Jan. 1, 2020, though, must complete the new form.
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 in Ohio can help you understand how taxes fit into your overall financial goals. Financial advisors can also help with investing and financial plans, including retirement, homeownership, insurance and more, to make sure you are preparing for the future.
Ohio Median Household Income
|Year||Median Household Income|
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 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 4.797% across six brackets. The same brackets apply to all taxpayers, regardless of filing status. The first bracket covers income up to $21,750, while the highest bracket covers income over $217,400.
Income Tax Brackets
|Ohio Taxable Income||Rate|
|$0 - $21,750||0.000%|
|$21,750 - $43,450||2.850%|
|$43,450 - $86,900||3.326%|
|$86,900 - $108,700||3.802%|
|$108,700 - $217,400||4.413%|
Many cities and villages in Ohio levy their own municipal income taxes. In fact, over 600 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 1% 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).
Local Income Taxes
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 additional withholding is smaller paychecks, but a smaller tax bill or even a refund may come during 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.
Ohio Top Income Tax Rate
|Year||Top Income Tax Rate|
Most Paycheck Friendly Places
SmartAsset's interactive map highlights the most paycheck friendly counties across the country. Zoom between states and the national map to see data points for each region, or look specifically at one of the four factors driving our analysis: Semi-Monthly Paycheck, Purchasing Power, Unemployment Rate, and Income Growth.
Methodology Our study aims to find the most paycheck friendly places in the country. These are places in the country with favorable economic conditions where you get to keep more of the money you make. To find these places we considered four different factors: semi-monthly paycheck, purchasing power, unemployment rate and income growth.
First, we calculated the semi-monthly paycheck for a single individual with two personal allowances. We applied relevant deductions and exemptions before calculating income tax withholding. To better compare withholding across counties we assumed a $50,000 annual income. We then indexed the paycheck amount for each county to reflect the counties with the lowest withholding burden.
We then created a purchasing power index for each county. This reflects the counties with the highest ratio of household income to cost of living. We also created an unemployment rate index that shows the counties with the lowest unemployment. For income growth, we calculated the annual growth in median income over five years for each county and indexed the results.
Finally, we calculated the weighted average of the indices to yield an overall paycheck friendliness score. We used a one half weighting for semi-monthly paycheck and a one-sixth weighting for purchasing power, unemployment rate and income growth. We indexed the final number so higher values reflect the most paycheck friendly places.
Sources: SmartAsset, government websites, US Census Bureau 2017 5-Year American Community Survey, MIT Living Wage Study, Bureau of Labor Statistics