Easily manage employment in Ohio

Payroll management in Ohio

Ohio has a strong economy supported by industries such as manufacturing, healthcare, finance, and technology. With state-specific payroll regulations, including a minimum wage higher than the federal rate, a progressive income tax system, and right-to-work laws, employers in Ohio must ensure compliance with both state and federal payroll laws. Understanding these regulations is crucial for smooth payroll operations and compliance.

Payroll breakdown in Ohio

Employers in Ohio must adhere to both federal and state payroll regulations regarding wages, taxes, and benefits. Below is an overview of key payroll components:

Minimum wage and overtime

• Minimum wage: Ohio’s minimum wage is $10.45 per hour for employers with gross receipts of $385,000 or more.
• For smaller employers or employees under 16 years old, the federal minimum wage of $7.25 per hour applies.
• Overtime rules:
• Ohio follows federal overtime laws, requiring employers to pay 1.5 times an employee’s regular rate for hours worked beyond 40 hours in a workweek.
• Some exemptions apply based on job classification and industry.

State income tax

• Ohio has a progressive state income tax system, with rates ranging from 0% to 3.99%, depending on income levels.
• Employers must withhold state income tax and remit it to the Ohio Department of Taxation.
• Some cities and municipalities in Ohio impose local income taxes, which employers must also withhold.

Unemployment insurance (UI) tax

• Employers must contribute to Ohio’s Unemployment Insurance (UI) program, managed by the Ohio Department of Job and Family Services (ODJFS).
• The UI wage base in Ohio is $9,000.
• UI tax rates vary based on an employer’s experience rating and range from 0.3% to 9.8%.
• New employers typically pay a 2.7% UI tax rate.

Workers’ compensation

• Ohio law requires all employers to carry workers’ compensation insurance to cover medical expenses and lost wages for employees injured on the job.
• Workers’ compensation insurance is provided exclusively by the Ohio Bureau of Workers' Compensation (BWC), making Ohio a monopolistic state for workers’ compensation.

Payroll tax filing and payment deadlines

• Employers must register for an Ohio Withholding Tax Account with the Ohio Department of Taxation.
• State withholding tax returns must be filed monthly, quarterly, or annually, depending on employer classification.
• UI tax reports must be submitted quarterly to the Ohio Department of Job and Family Services.
• Payroll tax payments can be made electronically through the Ohio Business Gateway (OBG).

Quick facts: Important considerations for employers

• State minimum wage compliance: Ohio’s minimum wage is higher than the federal rate for larger employers, but smaller employers may follow federal minimum wage laws.
• Final paycheck rules:
• If an employee is terminated, employers must provide the final paycheck on the next scheduled payday.
• If an employee resigns, the final paycheck must be provided by the next scheduled payday.
• New hire reporting: Employers must report new hires to the Ohio New Hire Reporting Center within 20 days.
• Paid sick leave: Ohio does not require employers to provide paid sick leave, but employers may choose to offer it as a benefit.
• Payroll recordkeeping: Employers must maintain payroll records for at least three years to comply with state and federal laws.
• Right-to-work state: Ohio is not a right-to-work state, meaning employees may be required to join a union if applicable.

Run payroll in Ohio with Remote

Managing payroll in Ohio requires careful attention to state-specific regulations, including minimum wage compliance, UI tax requirements, and workers’ compensation laws. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be, book a demo with Remote today.