Payroll tax in Ohio: What employers need to know [Updated 2026]
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Whether you're starting a small business in Ohio or running a global company with Ohio employees, you need to stay on top of your tax obligations. But navigating the tangled web of federal, state, and local requirements can get tricky.
In addition to the Medicare taxes and social security taxes that all US employers have to pay, you also have to account for Ohio's income tax and state-run unemployment fund. To zoom in even more locally, hundreds of Ohio municipalities also impose school district income taxes that employers need to withhold from paychecks.
So if you want to keep track of all of Ohio's payroll tax requirements, read our 2026 guide below.
Ohio's payroll taxes
The Ohio Department of Taxation administers the state's payroll taxes. Employers are required to withhold taxes from paychecks for any Ohio resident employees or nonresident employees working within state boundaries. Per state law, be sure to use the Ohio New Hire Reporting Portal to report a new employee within 20 days of their hiring date, which ensures they're accounted for during payroll tax withholdings.
In 2026, Ohio introduced a flat state income tax rate, replacing its prior multi-bracket progressive system. Learn more about Ohio's payroll taxes below.
Unemployment insurance tax
Ohio has a State Unemployment Insurance (SUI) program that offers temporary payments to employees who lost their jobs for reasons outside of their control. Employers are required to provide information to the Ohio Department of Job and Family Services to determine whether they should make SUI contributions. In 2026, the taxable wage base is $9,500 per employee (up from $9,000 in prior years), and new non-construction employers pay 2.85%. New construction employers pay 5.85%. Additionally, a new Technology and Customer Service Fee surcharge of 0.15% applies on wages up to $9,000 per employee for 2026 and 2027 to fund a system modernization.
Who pays | Employer |
|---|---|
Tax rate (approximately) | New employer (non-construction): 2.85% New employer (construction): 5.85% Experienced employers: 0.55%–10.25% Delinquency rate: 13.3% |
Taxable wage base | $9,500 per employee (2026) |
Also: 0.15% Technology & Customer Service surcharge on first $9,000 (2026–2027) | Additional $13.50 max per employee |
Ohio employers are liable to contribute to SUI if they:
Employed at least one worker during 20 different weeks in a calendar year (or preceding year)
Paid $1,500 or more to employees in any quarter in the last year (this number is $1,000 for domestic service workers or $20,000 for agricultural workers)
Are a nonprofit exempt from federal income tax but employed at least five workers during 20 different weeks in a calendar year
Visit the Ohio Department of Job & Family Services website for more information on Ohio's SUI. Also keep in mind that this state-run unemployment fund is separate from federal unemployment taxes, which employers also have to withhold at a rate of 6% of the first $7,000 of an employee's wages. However, according to the IRS, you may be eligible for a 5.4% tax credit on federal unemployment contributions.
State income tax
In 2026, Ohio simplified its state income tax to a flat rate of 2.75% on taxable income above $26,050—eliminating the previous multi-bracket progressive system. Income at or below $26,050 is exempt from state income tax entirely. Employers are required to withhold this flat rate from employee paychecks and remit it to the Ohio Department of Taxation on the applicable schedule.
Tax rate | Taxable income bracket (2026) |
|---|---|
0% | $0–$26,050 (exempt from state income tax) |
2.75% (flat) | Over $26,050 — Ohio moved to a flat 2.75% rate in 2026, eliminating prior progressive brackets |
Nonresidents who work in Ohio are subject to this income tax, which employers are required to withhold from employee paychecks. But if your employee lives in Indiana, Michigan, Kentucky, Pennsylvania, or West Virginia, you don't need to file the state income tax because of reciprocity provisions.
School district income tax
Some Ohio municipalities levy taxes to fund public school districts. If your employee lives in one of these areas, you have to withhold their school district tax as part of your tax return. To see if you're liable to pay this tax, you can search addresses online. You can also look at the Department of Taxation's 2026 withholding tables to view all school district income tax rates, but keep in mind that they're subject to change every year.
The school districts that service Columbus, Cleveland, and Cincinnati do not currently have an associated tax. Of the districts that do, rates range between 0.25% and 2%.
Sifting through Ohio's payroll tax regulations can get complicated, especially when trying to keep track of local income taxes across 611 different school districts—plus the new flat state income tax and updated SUI rates. But Rippling's payroll compliance software is built for exactly this.
Rippling automatically calculates your taxes and submits your tax forms and employer withholdings on your behalf—at the federal, Ohio state, and school district level. It keeps pace with rate changes automatically, monitors compliance and prevents infractions. And Rippling's PEO services can register and maintain your state tax accounts for you, automating even more of the payroll tax process.
Payroll tax due dates in Ohio
The Ohio Department of Taxation assigns different schedules for due dates for employers to submit their employer and school district withholdings, depending on how much they're paying. The table below lists the withholding amount ranges along with how often employers have to pay taxes and when those taxes are due.
Total withholding amount over the past calendar year (from July 1st to June 31st) | Tax filing frequency | Filing due dates |
|---|---|---|
$2,000 or less | Quarterly | The last day of April, July, October, and January |
$2,000-$84,000 | Monthly | 15th day of the following month |
$100,000 and above | Partial-weekly | Within three banking days of the last time you ran payroll |
Employers also need to file annual reconciliation forms and W-2s by January 31. Late filings can incur penalties of either $50 or 5% per month.
How to submit payroll taxes in Ohio
Once you know which payroll taxes employers are on the hook for and when those taxes are due, the next step is paying them. Before filing, determine your local school district income tax requirements by searching your address and finding your pay rate. You can also fill out School District Income Tax Return forms on the Ohio Department of Taxation website. You also need to gather an Ohio Employee Withholding Exemption Certificate (Form IT 4) from all of your Ohio employees to see if they can claim exemptions. Make sure to save these forms in case the Department of Taxation asks for them.
From there, you can file and pay your payroll taxes. Ohio requires employers to submit e-filings. According to the Department of Taxation, the preferred method is through Ohio Business Gateway, where you can make an account, pay taxes, and track your filing status. You can also submit an Electronic Funds Transfer (EFT) payment via the Ohio Treasurer of State.
Rippling's full-service payroll software
With Ohio's new flat 2.75% income tax rate and updated SUI rules, 2026 is a year of change for Ohio employers. Rippling's payroll software automatically incorporates all rate changes—so you're always filing the right amounts with the right agencies. It calculates your state, local, and school district taxes automatically, files returns on time, and handles payments on your behalf. And as Ohio regulations evolve, Rippling evolves with them—no manual updates or spreadsheet maintenance required.
Frequently Asked Questions
Are there local tax laws in Ohio?
Yes. In addition to state income taxes, many, but not all, Ohio municipalities levy a local tax to help fund their school districts (known as a school district income tax). Many of Ohio’s municipalities also impose additional local income taxes where Ohioans live and work, which individual taxpayers need to pay as part of a local tax return (in addition to their state and federal responsibilities).
What is Ohio's state income tax rate in 2026?
In 2026, Ohio moved to a flat state income tax rate of 2.75% on taxable income above $26,050—eliminating the previous multi-bracket progressive system. Income at or below $26,050 is fully exempt from Ohio state income tax. Employers must withhold the flat 2.75% rate from employee wages above that threshold and remit payments to the Ohio Department of Taxation on the schedule assigned based on withholding volume. Note that this simplified flat tax applies to the state rate only—Ohio school district income taxes and municipal local income taxes (administered by agencies like RITA) are assessed separately and still vary by location.
What is RITA?
In addition to school district and state income taxes, about half of Ohio’s 2,000 municipalities impose a separate local income tax. While employers don’t withhold this as a part of their payroll taxes, individual taxpayers have to file them as in addition to federal and state returns. The Regional Income Tax Agency (RITA) is a third-party agency that administers these municipal taxes on behalf of hundreds of Ohio cities and villages. You can see the tax rate schedules on RITA’s website. RITA helps taxpayers in its municipalities determine whether they can get tax credits to lower tax burdens where they live or work. RITA is an administrative agency; contrary to popular belief, there’s no such thing as a “RITA tax.”
Disclaimer
Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.
Author
Vanessa Kahkesh
Content Marketing Manager, HR
Vanessa Kahkesh is a content marketer for HR passionate about shaping conversations at the intersection of people, strategy, and workplace culture. At Rippling, she leads the creation of HR-focused content. Vanessa honed her marketing, storytelling, and growth skills through roles in product marketing, community-building, and startup ventures. She worked on the product marketing team at Replit and was the founder of STUDENTpreneurs, a global community platform for student founders. Her multidisciplinary experience — combining narrative, brand, and operations — gives her a unique lens into HR content: she effectively bridges the technical side of HR with the human stories behind them.
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