Ohio, a state located in the East North Central region of the Midwestern United States that stretches from Lake Erie in the north to Ohio River and the Appalachian Mountains in the south. The state is seventh most populous, the 34th largest by area, and the tenth most densely populated among the 50 states of the US. Columbus is the largest city, as well as the state's capital.
Ohio, also known as the "Buckeye State," is the birthplace to eight US Presidents and aviation. It offers plenty of reasons to relocate, including lower cost of living, flourishing economy, Midwestern charm, and all four seasons.
Looking for a place to build your career? Got several job offers in Ohio to choose from? Or start a new family or retire in Ohio? We are here to help. Our travel experts have joined hands with finance experts to bring a unique guide that would help you on the following topics:
This all-in-one guide will help you with many aspects regarding Ohio. From making up your mind to relocation, and from choosing your career to paycheck calculation. We have got it all for you. So let's get started!
Moving from State to State or Town to Town isn't an easy job. You require a load of prior knowledge, research, and support to make this life-changing decision work. If you're planning to move to the Buckeye State, learn about some of the essential factors before relocating:
Living in Ohio is quite affordable, as it has a cost of living index of 82.6, which is significantly lower than the national index of 100 points. Housing is the most significant factor that contributes to the lower cost, followed by health and transportation. Whereas Grocery, Utilities, and miscellaneous expenses are almost identical to the rest of the states.
Ohio is known as one of the top three most affordable states for housing, for which it is also ranked among the top 20 states with the lowest overall cost of living.
The median home value here is $140,400, so buying your dream house here isn't impossible. However, if you are looking to rent one, then you can get it at a median rental expense of $663 for a one-bedroom and $852 for a two-bedroom.
Some of the cheapest places to live in Ohio are Toronto, Bellevue, Van Wert, Hubbard, Wapakoneta, and Martins.
Ohio is home to some of the largest universities in the nation, including Ohio State University – Columbus. The state also secures the 22nd position in Geographic Disparity: States with the Best (and Worst) Schools by USA Today, which is based on several factors, including public school spending and high school graduation rate.
Some of the notable schools, colleges, and universities include Case Western Reserve University (Cleveland), Solon City School District, Solon, and Indian Hill Exempted Village School District, Cincinnati.
Ohio states enjoy the humid continental climate with all for seasons, including hot, humid summers and cold winters. However, the southern region of the state has overall milder temperatures. Moreover, the state also presents one of the most beautiful autumn foliage shows in the country.
Life with a high paying job and a beautiful house and a complete family are still dull without traveling, vacations, and outdoor fun. But don't you worry! Ohio has it all. From stunning natural landscapes to amusement parks, from cedar point to king island, and from museums to numerous other tourist spots, you have a lot to explore in the "Roller Coaster Capital of the World." Yes! You have read it right! Ohio is home to so many famous amusement parks that have earned this title.
Some of the popular tourist destinations in Ohio are Cleveland Museum of Art, The Wright Brothers National Memorial, Specialty museums, Hocking Hills State Park, Stan Hywet Hall & Gardens, as well as gorgeous Lake Erie and the Appalachian Mountains.
With an Unemployment rate of 4.7% and the minimum wage rate of $8.30/hour, you have a better chance to get a good job in Ohio. The fastest-growing jobs here are physical therapists, occupational therapists, operations analysts, nurse practitioners, and statisticians. Moreover, the high-paying jobs here are for the orthodontist, psychiatrist, dentist, anesthesiologist, and CEO. So you are lucky if you are qualified for one of them.
Ohio secures 38th position among 50 states in terms of Economy, according to Economy Rankings by US News & World Report. This position isn't appealing, but still, entrepreneurs and job seekers have an excellent chance to build their careers in industries like Agriculture, Manufacturing, Construction, Retail, and Entertainment.
Here is the quick round-up for all the good and bad about the Ohio State:
As we are done with relocation to Ohio and its payroll facts, now it's time to calculate paycheck.
The very first step to calculating the paycheck amount is to determine Gross Pay. It is a wage that an employee earned in the last pay period.
Gross Pay is calculated differently for both hourly and salary-based employees, which is discussed in detail as follow:
Hourly Employees are paid at a mutually agreed pay rate for each hour they work in a pay period. Usually, Pay periods for Hourly employees are Hourly, Daily, Weekly, and Bi-Weekly. However, the Federal, State, and Local Wage law requires the employers to set the pay rate equals to or more than the defined Minimum Wage Law for the non-exempted employees.
Hourly employees are also entitled to receive overtime, for each excess hour worked after regular hours in a workday or a workweek. Remember, like Minimum wage, the employers are also required to follow Overtime wage law provided by the federal, state, and local authorities.
To calculate gross wage for an hourly employee:
Salaried Employees are paid at the flat amount rather than on an hourly basis. The amount is usually mutually agreed as an Annual Salary, which is then paid in Semi-monthly or Monthly Pay periods.
Salaried employees are mostly exempted from overtime law. However, their salaries must be according to Federal and State Minimum Wage law.
To calculate Gross Pay for Salaried Employees:
Don't forget that Supplemental Wages like Bonuses, commissions, tips, paid leaves, fringe benefits, or other taxable wages earned by the employee must be added into the Gross wages.
Once you are done with Gross Wages, it's time to subtract any Pre-Tax deductions from the gross wage to get taxable wages as Pre-tax deductions are not taxable for federal payroll taxes.
Pre-tax deductions are offered to the employees as benefits like fringe benefits, HSA plans, etc., to reduce their taxable income, hence, increasing their take-home pay amount. Remember, not all benefits are exempted from taxes, so choose the pre-tax deductions wisely.
Some of the common pre-tax deductible benefits are:
Many Taxpayers find it hard to itemize their deductions to calculate taxable wages, for which they go for standard deductions, that varies according to the filing status, as shown in the table below:
| Filing Status | Standard Deduction Amount |
|---|---|
| Single Filers | $12,200 |
| Married, Filing Jointly | $24,400 |
| Married, Filing Separately | $12,200 |
| Head of Household | $18,350 |
Once you have determined the taxable wages, it's time to deduct Federal Income taxes for the Taxable wages.
IRS requires the employers to withhold federal income tax from the employee's paycheck, according to the details provided by the employee on Form W-4. The employee fills this form at the start of the job. The form includes all the necessary information, including income, number of allowances to claim, number of dependents, amount of additional taxes to deduct, and much more.
The employees are required to keep their Form W-4 up to date with all their current information, especially marriage, divorce, or child's birth.
The federal income tax is charged according to the tax brackets in which the taxpayer's income falls. The latest income tax brackets and rates are as follow:
| Taxable Income | Rate |
|---|---|
| $0 - $9,700 | 10% |
| $9,700 - $39,475 | 12% |
| $39,475 - $84,200 | 22% |
| $84,200 - $160,725 | 24% |
| $160,725 - $204,100 | 32% |
| $204,100 - $510,300 | 35% |
| $510,300+ | 37% |
| Taxable Income | Rate |
|---|---|
| $0 - $19,400 | 10% |
| $19,400 - $78,950 | 12% |
| $78,950 - $168,400 | 22% |
| $168,400 - $321,450 | 24% |
| $321,450 - $408,200 | 32% |
| $408,200 - $612,350 | 35% |
| $612,350+ | 37% |
| Taxable Income | Rate |
|---|---|
| $0 - $9,700 | 10% |
| $9,700 - $39,475 | 12% |
| $39,475 - $84,200 | 22% |
| $84,200 - $160,725 | 24% |
| $160,725 - $204,100 | 32% |
| $204,100 - $306,175 | 35% |
| $306,175+ | 37% |
| Taxable Income | Rate |
|---|---|
| $0 - $13,850 | 10% |
| $13,850 - $52,850 | 12% |
| $52,850 - $84,200 | 22% |
| $84,200 - $160,700 | 24% |
| $160,700 - $204,100 | 32% |
| $204,100 - $510,300 | 35% |
| $510,300+ | 37% |
Besides, Federal Income Tax, the IRS also requires the employer to withhold FICA tax (15.3%) for the employee's paycheck and also requires the employer to pay an equal amount for each employee.
Federal Insurance Contributions Act (FICA) Taxes comprises of two types of taxes which are as follow:
A total of 12.4% of social security tax is charged from which 6.2% is withheld from the employee's gross, and the employer pays the matching 6.2%. However, Social Security is only charged on the maximum taxable earnings of $137,700 for 2020.
A total of 2.9% of Medicare is charged, from which 1.45% is withheld from the employee's gross, and the employer pays the matching 1.45%. Unlike Social Security, there is no maximum table earning limit for this tax. However, an additional surtax of 0.9% is charged as Additional Medicare Surtax on the employees having income over the specified level along with filing status, which is as follow:
| Income Over | Filing Status |
|---|---|
| $250,000 | Married Filing Jointly |
| $125,000 | Married Filing Separately |
| $200,000 | Single |
IRS requires the employer to pay another tax, known as The Federal Unemployment Tax Act (FUTA) Tax. This tax is paid at the rate of 6% on the first $7000 earned by each employee in a year. However, the IRS doesn't require the employees to contribute to it.
The employers who pay State Unemployment Insurance (SUI) tax in full and on time are given relieving FUTA tax credit of up to 5.4%, which saves a whopping 90% from FUTA Tax.
Post-tax deductions (after-tax deductions) is an amount the employer takes out from the employee's paycheck after taxes. Therefore, it does not affect taxable wages and the amount of tax payable.
Here are some of the types of post-tax deductions that employee may voluntarily choose:
As you are done with Federal Payroll Taxes, now it's time to discuss State Payroll Taxes. The Ohio State charges State Income Tax on the employees. Moreover, employers are required to pay State Unemployment Insurance Tax.
Ohio follows a progressive income tax system, having eight tax brackets dependent on income level and regardless of filing status and a rate range of 0% to 4.797%. Moreover, Supplemental Wages and Bonuses can be charged at a flat rate of 3.5%.
The employer withholds this tax from the employee's paycheck according to the details provided by the employee in the Form IT 4. This form is filled by the employee while joining the job. Employees are required to keep the form updated with any significant life events like marriage, child's birth, and divorce.
| All Filers | |
| Ohio Taxable Income | Rate |
|---|---|
| $0 - $21,750 | 0.000% |
| $21,750 - $43,450 | 2.850% |
| $43,450 - $86,900 | 3.326% |
| $86,900 - $108,700 | 3.802% |
| $108,700 - $217,400 | 4.413% |
| $217,400+ | 4.797% |
The State Unemployment Insurance (SUI) Tax is an employer-funded program that provides temporary income to unemployed workers who have lost their job without fault of their own.
The state doesn't charge in Ohio State Disability Insurance (SDI) Tax. However, it does require the employers to pay Ohio State Unemployment Insurance (SUI) tax, at the rate ranging from 0.3% to 9.4% on a first $9,000 earned in wages by each employee in a year. However, construction employers pay a flat rate of 5.8%, and new employers are given relief as they only have to pay a flat rate of 2.7%.
More than 600 plus Ohio cities and villages charge local income tax on its residents. Ohio local income taxes (unofficially referred to as the Regional Income Tax Agency Tax - RITA Tax) are charged at a rate ranging from 0.5% to 2.75%.
| Local Income Taxes | |
|---|---|
| City | Tax Rate |
| Akron | 2.50% |
| Alliance | 2.00% |
| Ashland | 2.00% |
| Ashtabula | 1.80% |
| Athens | 1.85% |
| Avon | 1.75% |
| Avon Lake | 1.50% |
| Barberton | 2.25% |
| Berea | 2.00% |
| Bowling Green | 2.00% |
| Broadview Heights | 2.00% |
| Brook Park | 2.00% |
| Brunswick | 2.00% |
| Canton | 2.50% |
| Centerville | 2.25% |
| Chillicothe | 2.00% |
| Cincinnati | 2.10% |
| Cleveland | 2.50% |
| Cleveland Heights | 2.25% |
| Columbus | 2.50% |
| Cuyahoga Falls | 2.00% |
| Dayton | 2.50% |
| Delaware | 1.85% |
| Dublin | 2.00% |
| Eastlake | 2.00% |
| Elyria | 2.25% |
| Euclid | 2.85% |
| Fairborn | 1.50% |
| Fairfield | 1.50% |
| Findlay | 1.00% |
| Forest Park | 1.50% |
| Gahanna | 2.50% |
| Garfield Heights | 2.00% |
| Green | 2.00% |
| Grove City | 2.00% |
| Hamilton | 2.00% |
| Hilliard | 2.00% |
| Huber Heights | 2.25% |
| Hudson | 2.00% |
| Kent | 2.25% |
| Kettering | 2.25% |
| Lakewood | 1.50% |
| Lancaster | 1.75% |
| Lebanon | 1.00% |
| Lima | 1.50% |
| Lorain | 2.50% |
| Mansfield | 2.00% |
| Maple Heights | 2.50% |
| Marion | 2.00% |
| Marysville | 1.50% |
| Mason | 1.12% |
| Massillon | 2.00% |
| Mayfield Heights | 1.00% |
| Medina | 1.25% |
| Mentor | 2.00% |
| Miamisburg | 2.25% |
| Middletown | 1.75% |
| Newark | 1.75% |
| Niles | 2.00% |
| North Olmsted | 2.00% |
| North Ridgeville | 1.00% |
| North Royalton | 2.00% |
| Norwood | 2.00% |
| Oregon | 2.25% |
| Oxford | 2.00% |
| Painesville | 2.00% |
| Parma | 2.50% |
| Parma Heights | 3.00% |
| Perrysburg | 1.50% |
| Pickerington | 1.00% |
| Piqua | 2.00% |
| Portsmouth | 2.50% |
| Reynoldsburg | 2.50% |
| Riverside | 1.50% |
| Rocky River | 2.00% |
| Sandusky | 1.25% |
| Shaker Heights | 2.25% |
| Sidney | 1.75% |
| Solon | 2.00% |
| South Euclid | 2.00% |
| Springfield | 2.40% |
| Steubenville | 2.00% |
| Stow | 2.00% |
| Strongsville | 2.00% |
| Sylvania | 1.50% |
| Toledo | 2.25% |
| Trotwood | 2.25% |
| Troy | 1.75% |
| Twinsburg | 2.00% |
| Upper Arlington | 2.50% |
| Wadsworth | 1.40% |
| Warren | 2.50% |
| Westerville | 2.00% |
| Westlake | 1.50% |
| Willoughby | 2.00% |
| Wooster | 1.50% |
| Xenia | 2.25% |
| Youngstown | 2.75% |
| Zanesville | 1.90% |
Now that you are done with all payroll taxes and calculated the net take-home pay of an employee, it's time to cut the paycheck. Moreover, you, as an employer, must pay your portion of FICA tax along with FUTA and SUI tax in full and on time regularly.
Answer: These are the taxes deducted from an employee's paycheck in Ohio:
Answer: Federal Income tax in Ohio ranges between 0% and 37% with seven tax brackets depending on filing status and income level.
Answer: Ohio State Income Tax is charged at the progressive rates ranging from 0% to 4.797%, distributed in eight tax brackets, depending on income level and regardless of filing status. However, Supplemental Wages and Bonuses are charged at a flat rate of 3.5%.
Answer: the current State Minimum Wage rate in Ohio is at $8.70. Moreover, the Cash Minimum wage rate for Tipped Employees is $4.35, with a maximum tip credit of $4.35.
Answer: Ohio's Livable wage for a single adult is $10.86, for a single adult with one child is $23.31, and for a couple (one working) with two children is $24.38, according to the Massachusetts Institute of Technology.