How Much Is Taken Out of a Paycheck for Taxes in Ohio?

Understanding the various deductions from a paycheck is an important part of managing personal finances. Gross pay, the total earnings before any deductions, is reduced by a series of withholdings to arrive at net pay, the amount an employee actually receives. Taxes represent a significant portion of these mandatory deductions. This article will explain the different types of taxes typically withheld from paychecks for individuals working in Ohio, helping to clarify where your money goes.

Federal Tax Withholding

Federal tax withholding represents a substantial portion of paycheck deductions. These withholdings primarily consist of federal income tax and Federal Insurance Contributions Act (FICA) taxes, which fund Social Security and Medicare. Employers are responsible for deducting these amounts from an employee’s wages and remitting them to the Internal Revenue Service (IRS).

Federal income tax is a progressive tax. The amount withheld depends on an individual’s earnings, filing status, and information provided on IRS Form W-4, Employee’s Withholding Certificate. This form guides employers on how much tax to deduct from each paycheck.

The Form W-4 asks for information about dependents and other income or deductions. It includes sections to adjust withholding for multiple jobs or a working spouse, claim tax credits for dependents, and account for other income or deductions.

FICA taxes are another mandatory federal withholding for Social Security and Medicare. The employee’s portion of Social Security tax is 6.2% of gross wages, up to an annual income threshold known as the Social Security wage base limit. For 2025, this limit is $176,100.

Medicare taxes support the federal health insurance program for individuals aged 65 or older. The employee’s portion of Medicare tax is 1.45% of all covered wages. Unlike Social Security, there is no wage base limit for Medicare tax.

For high-income earners, an additional Medicare tax of 0.9% applies to wages exceeding certain thresholds (e.g., $200,000 for single filers). Employers must begin withholding this additional 0.9% once an employee’s wages surpass $200,000 in a calendar year, regardless of their filing status. Employers do not match this additional Medicare tax contribution.

Ohio State Income Tax Withholding

Beyond federal taxes, individuals working in Ohio also have state income tax withheld from their paychecks. Ohio imposes a state income tax on earned income, which contributes to funding various state services. This tax is administered by the Ohio Department of Taxation and is separate from federal and local taxes.

Ohio’s state income tax system is progressive, with rates varying based on income levels. For 2025, rates range from 0% to 3.125%. Ohio is transitioning to a flat tax system of 2.75% for income above $26,050, effective in 2026.

Withholding for Ohio state income tax is determined by an employee’s income and applicable Ohio-specific deductions or exemptions. Employers must withhold this tax from wages based on state withholding tables and employee-provided information.

The legal framework for the state’s income tax includes provisions for withholding. Employers remitting these taxes must adhere to specific guidelines for electronic funds transfer and reporting. Proper calculation of Ohio state income tax withholding ensures employees contribute accurately to the state’s revenue throughout the year.

Ohio Local Tax Withholding

In addition to federal and state taxes, many individuals in Ohio also face local income tax withholdings. These local taxes primarily come in two forms: city income tax and school district income tax. Unlike federal and state taxes, the applicability and rates of these local taxes vary widely depending on an individual’s specific location within Ohio.

City income tax is levied by many municipalities across Ohio on wages, salaries, and business income. This tax typically applies based on where an individual lives or works. Rates for city income taxes vary considerably, ranging from 0.5% to 3% in some cities.

Ohio Revised Code Chapter 718 governs municipal income taxes. Many cities offer a credit for taxes paid to another municipality. Organizations like the Regional Income Tax Agency (RITA) administer municipal income taxes for many Ohio cities, simplifying collection and compliance.

School district income tax is another form of local withholding in Ohio. This tax is imposed by some school districts. Unlike city income taxes, school district income tax is based solely on an individual’s school district of residence, not their place of employment. Not all school districts in Ohio levy this tax, and the rates vary among those that do, generally ranging from 0.5% to 2.0%.

Voter approval is required for a school district to implement or renew an income tax. School district income tax bases include traditional (taxing Ohio adjusted gross income) and earned income only (primarily taxing wages and self-employment income). Employers must withhold school district income tax if an employee resides in a taxing school district. The Ohio Department of Taxation provides resources to determine applicable rates.

Understanding Your Pay Stub

A pay stub serves as a detailed record of your earnings and deductions for a specific pay period. Understanding its components helps verify pay accuracy and money allocation. Pay stubs typically provide a clear breakdown of gross pay (total earnings before deductions) and net pay (amount received after withholdings).

On your pay stub, you will find distinct line items for each type of tax withholding. Federal income tax is usually labeled as “Federal Income Tax,” “FIT,” or “FWT.” FICA taxes are commonly listed as “Social Security” and “Medicare.” These labels allow for easy identification of the federal deductions.

Ohio state income tax withholding will typically appear as “OH State Tax” or “Ohio SUT.” Local city income taxes might be shown as “City Tax” or “Municipal Tax.” School district income taxes are often identified as “School District Tax” or “SDIT.”

Beyond tax withholdings, pay stubs may also list other deductions like health insurance or retirement contributions. These non-tax deductions differ from mandatory tax withholdings. While they reduce net pay, they are for voluntary benefits or savings plans, not government taxes. Regularly reviewing your pay stub ensures correct amounts are withheld for all applicable taxes and other deductions.