How Much Gets Taken Out of My Paycheck in Ohio?

Paycheck deductions reduce an employee’s gross earnings to their net take-home pay. These withholdings fund government services at federal, state, and local levels, as well as employee benefits. Understanding these deductions helps individuals comprehend the difference between their gross wages and the amount deposited into their bank accounts.

Federal Withholding Components

Federal payroll deductions consist of federal income tax withholding and Federal Insurance Contributions Act (FICA) taxes. These deductions apply nationwide and are mandatory for most employees.

Federal income tax withholding is an estimate of an individual’s annual income tax liability, collected directly from each paycheck. The amount withheld is determined by the information an employee provides on Form W-4, including their filing status, adjustments for multiple jobs, or claims for dependents. Employers use this W-4 information to calculate withholding, aiming to align it with the employee’s eventual tax obligations.

FICA taxes fund Social Security and Medicare programs, providing for retirement, disability, and healthcare benefits. The Social Security tax is 6.2% of an employee’s gross wages, matched by the employer for a total of 12.4%. For 2025, this tax applies only to earnings up to a wage base limit of $176,100.

The Medicare tax is 1.45% of an employee’s gross wages, also matched by the employer, totaling 2.9%. Unlike Social Security, there is no wage base limit for Medicare tax. An additional Medicare tax of 0.9% applies to individual wages exceeding $200,000, or $250,000 for married couples filing jointly.

Ohio State Income Tax Withholding

Ohio imposes a state income tax that employers must withhold from employee paychecks. This state tax contributes to funding public services within Ohio.

Ohio operates a progressive income tax system, meaning higher income levels are subject to higher tax rates. For the 2024 tax year, Ohio’s state income tax rates range from 0% to 3.50%.

The amount of state income tax withheld depends on an employee’s income and any Ohio withholding allowances or credits claimed. Employers use information provided by the employee to calculate these deductions. This process helps ensure that employees are paying their estimated state tax liability throughout the year.

Ohio Local Income Tax Withholding

Ohio is distinctive among states due to the prevalence and variability of local income taxes, a significant component of many residents’ paycheck deductions. These taxes fund municipal services and school districts.

Many cities and villages across Ohio levy their own municipal income taxes, which are typically flat rates. These rates can vary widely by municipality, often ranging from 0.50% to 3%. This tax usually applies based on where an individual works or resides.

In addition to municipal taxes, some school districts in Ohio also impose an income tax. These school district income taxes are generally based on an individual’s residence within the district. Individuals can determine which local taxes apply to them and find the current rates by checking with their employer or state tax department websites.

Other Common Paycheck Deductions

Beyond federal, state, and local income taxes, paychecks often include other deductions for benefits and obligations. These can generally be categorized based on their tax treatment.

Pre-tax deductions are subtracted from an employee’s gross pay before taxes are calculated, which reduces the amount of income subject to federal, state, and sometimes local taxes. Common examples include contributions to traditional 401(k) retirement plans, health insurance premiums, and Flexible Spending Account (FSA) contributions.

Conversely, post-tax deductions are taken from an employee’s net pay after all applicable taxes have been withheld. Examples include contributions to Roth 401(k) plans, union dues, and wage garnishments for obligations such as child support or defaulted loans.