Overview
Ohio has a graduated state income tax and is also known for its extensive network of local income taxes. Many Ohio cities and school districts levy their own income taxes, making Ohio one of the most complex states for local-level payroll tax compliance.
State Income Tax (SIT)
Ohio’s graduated income tax uses brackets where higher income levels are taxed at progressively higher rates. Employees complete Form IT 4 with their total withholding exemptions (each worth $650 in deduction value). Ohio also has approximately 600 municipalities and school districts that may levy local income taxes, making it critical to track employee work and residence locations.
| Tax Structure | Progressive/graduated with brackets |
| State Withholding Form | Form IT 4 |
| Exemption Value | $650 per exemption |
| Local Taxes | ~600 municipalities and school districts with local taxes |
| School District Tax | Separate withholding for school districts |
Supplemental Wages
Ohio supports the following supplemental calculation methods. Supplemental wages such as bonuses and commissions will be calculated using the applicable method.
Employer State Unemployment Tax (SUTA)
Your assigned SUTA rate will be based on your company’s experience with unemployment claims. New employers typically start at the default rate of 2.7%.
| Tax Type | Employer-paid only |
| Default New Employer Rate | 2.7% |
| Rate Assignment | Experience-rated; assigned annually by the state |
Other Taxes & Obligations
Local Taxes: Ohio has city income taxes, occupational license fees that may apply depending on the employee’s work and residence location. Be sure to verify which local jurisdictions apply to each employee.
Disclaimer: This content is provided for general informational purposes only and does not constitute legal, tax, or accounting advice. Netchex does not provide tax or legal guidance and makes no representations regarding the accuracy or applicability of this information. Laws and regulations may change. The information on this page reflects payroll tax guidelines as of March 2026. For the most current requirements, please refer to:
Let Netchex Handle the Complexity
Staying compliant with payroll taxes doesn’t have to be stressful. Netchex automatically calculates, withholds, and files your payroll taxes so you can focus on what matters most — your people.
Why Netchex
Choosing a partner who simplifies payroll and integrates with your HR, benefits, and time tracking systems changes everything.
Netchex stands out with:
Integrated Payroll + HR + Time & Attendance in one platform
Built-in compliance and tax automation (no surprises or lagging updates)
Transparent pricing — no hidden fees, ever
5-star support from real, U.S.-based payroll experts
Crowd 4.5 / 5 star
Google 5 / 5 star
Capterra 4.5 / 5 star
Software Advice 4.5 / 5 star
GetApp 4.5 / 5 star
Trust Radius 4 / 5 star
