24 September 2025 Ohio Department of Taxation issues revised withholding tables effective October 1, 2025 The Ohio Department of Taxation (Department) has issued updated percentage method, optional computer method and withholding tables for use with wages paid on and after October 1, 2025. The updates reflect legislation enacted this year that lowered personal income tax rates retroactive to January 1, 2025. (See Tax Alert 2025-1744.) 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. The updated percentage and option computer methods reflect the highest withholding tax rate of 3.64%, down from 3.8%. 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.) Ohio is one of several states that sets the withholding tax rates higher than those under the state tax code. For instance, effective July 1, 2024, Ohio's highest withholding tax rate was 3.8%, while the top marginal tax was 3.5%. (Ohio Tax Withholding Tables — Percentage Method.)
Document ID: 2025-1929 | ||||
