If you are an Ohio employer, there is an important payroll update you need to act on before your next pay cycle.
The Ohio Department of Taxation has issued new withholding tables that apply to all payrolls with a period ending on or after Aug. 1, 2026. These updated tables reflect income tax rate reductions authorized under House Bill 96 (136th General Assembly) and are not optional. Ohio employers are required to use them.
Why Are the Withholding Rates Changing?
Ohio’s income tax rates are being reduced as part of House Bill 96, passed by the 136th General Assembly. When income tax rates go down, the withholding tables that employers use to calculate how much to take out of each paycheck must be updated to reflect those lower rates.
Failing to update your payroll calculations to the new tables means you could be over-withholding from your employees’ paychecks — taking more than the state now requires. While the employee would likely receive a larger refund at tax time, using outdated tables puts you out of compliance with Ohio’s withholding requirements.
What’s Changing and When
Effective date: Payrolls with a period ending on or after August 1, 2026.
The new tables apply regardless of whether your payroll period starts before Aug. 1. What matters is the period end date. If your payroll ends on or after Aug. 1, the new tables must be used.
Updated withholding tables are available for all standard payroll frequencies:
- Percentage method
- Optional computer method
- Daily
- Weekly
- Biweekly
- Semi-monthly
- Monthly
All tables are now available on the Ohio Department of Taxation’s Employer Withholding Tax webpage under the “Tax Rates” dropdown.
Who Needs to Act?
Every Ohio employer who withholds state income tax from employee paychecks needs to update their payroll calculations before the first payroll period ending on or after Aug. 1.
This includes:
- Businesses processing payroll in-house
- Companies using payroll software — verify your software provider has pushed the update
- Employers working with third-party payroll providers — confirm they are aware and have applied the new tables
If you use a payroll service provider or PEO, contact them now to confirm they have incorporated the Aug. 1 withholding rate changes.
Quick Reference: What You Need to Do
- Confirm which payroll period end date falls on or after Aug. 1
- Download the updated withholding tables from the Ohio Department of Taxation’s Employer Withholding Tax webpage (look under “Tax Rates”)
- Update your payroll system or notify your payroll provider
- Apply the new tables starting with that first qualifying payroll period
- Keep records of when the update was applied
A Note on Supplemental Compensation
The withholding rate on supplemental compensation — including bonuses, commissions, and other non-regular wage payments — remains at 2.75 percent. This rate is not changing with the Aug. 1 update.
The Bottom Line for Ohio Employers
The Aug. 1 withholding table update is not a dramatic overhaul. It is a targeted adjustment tied to Ohio’s income tax rate reductions. However, the compliance obligation is real, and the window to act is short.
If you have questions about how this change affects your payroll process, your obligations as an Ohio employer or your overall tax picture, the team at Zinner & Co. is ready to help.
Contact Zinner & Co.
Contact Zinner & Co. to speak with one of our advisors about your payroll and tax planning needs.
