How to Calculate Payroll Taxes in Columbus, OH
Unlike some states that require employees to only pay state income tax, Ohio has additional requirements. Along with state income tax, depending on where the employee lives, she might have to pay school district tax. Further, some cities require employees who work in the city to pay city income tax; the city of Columbus is one of these states. As an employer in Columbus, Ohio you must withhold the required taxes from your employees, plus pay your own share of taxes. Apply the appropriate agency's guidelines to calculate the respective tax.
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Instructions
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Obtain the employee's total exemptions claimed from line 4 of his IT 4 form and use the state withholding tax table that matches his pay period, exemptions and wages to figure out state income tax. The Ohio Department of Taxation provides the withholding tables for state income tax.
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2
Compute school district tax if the employee lives in a school district that imposes an income tax. Obtain the employee's tax percentage or decimal rate from the Ohio Department of Taxation's website. If the tax is based on earned income, withhold at the flat percentage or decimal rate for the school district area. Otherwise, use the employee's exemptions and wage base used for state income tax purposes plus the school district withholding tables.
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Calculate Columbus income tax according to the tax rate the city auditor sets. At the time of publication, withhold city income tax at 2.5 percent of the employee's income. Note that 401(k) contributions, which are normally not subject to federal and state income tax, are subject to Columbus income tax.
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Calculate state unemployment tax -- only the employer pays this tax. Your rate depends on various factors, including whether you are a new employer or a construction employer, and the amount of unemployment benefits charged on your account. New non-construction employers are generally assigned a tax rate of 2.7 percent, at the time of publication.
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Multiply the tax rate the unemployment agency assigns you by the annual wage base of $9,000, at the time of publication, for each employee to arrive at your unemployment liabilities for the year.
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Tips & Warnings
Comply with the Columbus, Ohio city auditor's requirements for paying city income tax withholding and filing the respective reports.
Apply the Ohio Department of Taxation's rules for paying state income tax and school district tax, and filing the necessary reports.
Follow the Internal Revenue Service's guidelines for withholding Social Security tax, Medicare tax and federal income tax from employee wages, and for paying your share of Social Security and Medicare taxes and federal unemployment tax. See IRS Circular E for payment and filing procedures.
Comply with the Ohio Department of Job and Family Services' requirements for filing unemployment tax reports and paying your contributions.
