Ohio employers and employees should prepare for an important payroll update this fall. Starting Oct. 1, the Ohio Department of Taxation will implement new state income tax withholding tables.

The change was necessitated by the passage of House Bill 96, the state’s biennial operating budget. This legislation reduces income tax rates for Ohioans, meaning changes are on the horizon for anyone processing or receiving payroll in the Buckeye State.

What’s changing?

The newly issued withholding tables affect all pay frequencies, including daily, weekly, biweekly, semi-monthly, and monthly payrolls. Both the percentage and optional computer methods for calculating state income tax withholding have been revised to reflect the lower rates.

For employers, this means it’s time to review your payroll systems and ensure they’re updated before the Oct. 1 deadline.

Payroll software providers may release updates, but it’s always best to double-check that your systems are using the most current tables.

Why is this important?

Accurate withholding is essential for compliance and peace of mind. If your payroll isn’t updated, you risk withholding too much or too little state tax from employees’ paychecks.

Under-withholding could result in employees owing taxes at year-end, while over-withholding impacts their take-home pay.

Employers who fail to implement the new tables could face penalties or the administrative headache of making retroactive corrections.

For employees, this update could mean a modest increase in take-home pay, depending on individual circumstances.

Where to find the new tables

The Ohio Department of Taxation has made the new withholding tables and related resources available online. Employers and payroll professionals should visit the Employer Withholding Tax page to download the latest tables, review instructions, and access helpful tools.

Next Steps

Employers

Review your payroll processes and communicate these changes to your HR and accounting teams. Update your payroll software, consult with your payroll provider, and notify employees about the new withholding rates.

Employees

If you have questions about how these changes may affect your paycheck, reach out to your employer’s HR department or your Zinner & Co. Tax Team representative.

Staying proactive now will help ensure everyone is prepared for a seamless transition when the new withholding rates take effect on Oct. 1.