Ohio payroll taxes for employers (2026)

Ohio-only payroll rules to plan for

Workers comp from the state fund

Ohio requires workers comp once you have one employee regularly in service (R.C. 4123.01). Ohio is a monopolistic state: you buy coverage from the Ohio Bureau of Workers' Compensation (BWC), not a private carrier, and only qualifying large employers can self-insure. That monopolistic and self-insurance detail comes from Teambridge, a secondary source, because the BWC pages blocked our reader on October 16, 2026. A PEO operating in Ohio also registers with the BWC PEO unit.

Municipal and school district income taxes

Most Ohio cities and villages tax wages, collected through RITA, the Central Collection Agency (CCA) or the city itself. Cleveland's rate is 2.5% and Cincinnati's is 1.8%. Many school districts add their own income tax. The Ohio Department of Taxation's Finder tool looks up the rate for an address. Our Ohio municipal income tax guide covers how withholding works by work location.

A new fee on top of SUTA

House Bill 96 added a Technology and Customer Service Fee of 0.15% on the first $9,000 per employee, about $13.50 per worker, for 2026 and 2027. ODJFS lists it on its 2026 rate detail sheet. New construction employers pay 5.7% instead of 2.7%, and experienced rates range from 0.40% to 10.1% per the US Department of Labor summary. Our text extract of the ODJFS PDF read 0.65% to 12.25%, but that extract was garbled, so confirm your rate on your ODJFS notice.

Late wages cost $200 or more

Ohio sets no separate final paycheck deadline. Final wages follow your regular paydays under R.C. 4113.15, and the US Department of Labor payday table lists semi-monthly as the Ohio minimum. If wages stay unpaid 30 days past the regular payday, you owe liquidated damages of 6% of the claim or $200, whichever is greater.

Ohio employer payroll facts at a glance

Getting set up with Ohio agencies

1. Get your federal EIN.
2. Register for unemployment tax with ODJFS using its "Register as an Employer" link.
3. Open a state withholding account with the Ohio Department of Taxation, and use the revised 2026 withholding formula effective August 1, 2026.
4. Buy a BWC policy before your first employee starts.
5. Find the municipal tax for each work site, plus any school district income tax, and register with RITA, CCA or the city as needed.
6. Report new hires, rehires and independent contractors within 20 days.

Ohio cost example: one $50,000 employee

This is what a new Ohio employer pays in payroll taxes on one full-year worker. The BWC premium depends on your industry classification and is not included.

The worker's own state income tax at 2.75% applies only to income over $26,050 (per EY, a secondary source), and city tax is withheld on top. A Cleveland worker at 2.5% has $1,250 in city tax on $50,000. Neither comes from your budget, but both must be withheld correctly. Compare Ohio's state unemployment line with others on our 2026 SUTA rates page.

Ohio minimum wage now and in 2027

Ohio's 2026 minimum wage is $11.00 for employers with gross receipts of $405,000 or more and $7.25 below that, with a $5.50 cash wage for tipped staff. The 2027 state poster (revised September 30, 2026) lists $11.40, a $5.70 tipped wage and a $419,000 small-employer threshold; Ohio adjusts each January 1. See minimum wages in all states.

Ohio payroll services and PEOs

City tax is the reason to choose carefully. Ask whether a provider files with RITA, CCA and self-administered cities, and whether school district tax is included. OnPay includes local tax filings in $49 a month plus $6 per worker; Gusto starts at $49 plus $6 per person (both checked October 16, 2026). More in our payroll software rankings.

PEOs in Ohio must register with the BWC, which offers a public PEO lookup. Workers comp still runs through BWC either way. Compare options in our PEO rankings and see what PEOs charge per employee.