Ohio Governor Mike DeWine signed into law H.B. 96, which implements a two-year phased transition to a flat personal income tax rate. Specifically, retroactive to January 1, 2025, the top personal income tax rate is reduced from 3.5% to 3.125%. Effective January 1, 2026, a flat personal income tax rate of 2.75% applies to income over $26,050.

For 2025 and 2026, personal exemptions are not subject to inflation indexing.

Ohio's state personal income tax rates were last changed in 2023 under H.B. 33 which, effective January 1, 2023, gradually reduced the personal income tax rates over two years, collapsing four tax brackets to two by 2024. The updated withholding formula for 2023 was effective with wages paid on and after November 1, 2023.

Once available, the updated withholding formula for 2025 will be available here.

Supplemental wage withholding

The supplemental rate of withholding for bonuses and irregular wage payments is set by law at 3.5%. (Ohio Administrative Code 5703-7-10, rev. 11-23-2018.)

Ernst & Young LLP insights

Ohio is one of several states that sets the withholding tax rates higher than those under the state tax code. For instance, for 2025, Ohio's highest withholding tax rate was 3.8%, while the top marginal tax was 3.5%. (Ohio Tax Withholding Tables — Percentage Method.)