2026 · Ohio
Ohio severance pay tax
Federal 22% plus Ohio's 2.8% supplemental rate. But neither is your real tax rate. Here's the real number.
Counts toward the $184,500 Social Security cap.
Wages, new job, spouse, sets your real tax rate.
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Ohio layoff at a glance
| State tax on severance | Flat 2.8% supplemental withholding |
| State income tax | Flat 2.8% |
| Unemployment weekly max | $624 for up to 26 weeks |
| Unemployment taxed by Ohio? | Yes |
How Ohio withholds on severance
Ohio withholds a flat 2.8% on supplemental wages like severance. On top of that, the federal government withholds a flat 22% (37% over $1 million) and FICA, 6.2% Social Security up to the $184,500 wage base plus 1.45% Medicare.
Ohio taxes income at a flat 2.8%, which is the rate that applies to severance whichever way it's withheld. If you also claim unemployment, Ohio pays up to $624 a week for up to 26 weeks, and taxes it on the state return. That's the Ohio layoff picture in one place, the severance tax here, the unemployment on its own Ohio page.
Worked example: $40,000 severance in Ohio
A single filer, $40,000 severance paid separately, with $60,000 of other 2026 income:
| Federal withholding (22%) | −$8,800 |
| FICA (Social Security + Medicare) | −$3,060 |
| Ohio withholding | −$1,100 |
| Net check | $27,040 |
| What it actually costs in tax | $12,310 |
Over-withheld by about $650, expect roughly that back as a refund at filing. The withholding is a fixed rate; your actual tax is your marginal rate on the severance stacked on your other income.
Stacking Ohio unemployment on top
Ohio sizes your weekly check off your recent wages, up to $624 a week, mid-pack nationally (23th of 51). There is no separate dependent add-on. Duration 20-26 indexed; base max $624, up to $842 with 3+ dependents.
| Weekly benefit range | $176 - $624 |
| How the amount is set | Off your recent wages |
| Maximum duration | 26 weeks (20-26 indexed; base max $624, up to $842 with 3+ dependents) |
| Waiting week | Yes, one unpaid week |
| Dependent allowance | None |
| Taxed by Ohio | Yes |
Stacked together, that $40,000 severance nets about $27,040 and Ohio's unemployment can add up to $16,224 over 26 weeks, about 11 months of a $4,000 budget before you need a paycheck. File through Ohio Department of Job and Family Services (ODJFS); nail down the exact figure in the runway calculator.
Questions about Ohio severance tax
Is severance taxed higher in Ohio?
No. It's withheld at a flat 22% federally and 2.8% by Ohio, but it's taxed as ordinary income at your normal rates. You settle up at filing.
Does Ohio tax my severance?
Yes, Ohio taxes severance as wages. Ohio withholds a flat 2.8% on supplemental wages like severance.
Will I get a refund or owe more?
It depends on your bracket. The flat 22% over-withholds for lower earners (refund) and under-withholds for those in the 32 to 37% brackets (set aside the difference). Enter your numbers above to see which way it goes for you.
Your Ohio layoff toolkit
- Ohio unemployment benefits weekly amount and duration
- Runway calculator how long your money lasts
- Ohio paycheck calculator take-home at your next job
- Ohio 1099 tax if you go freelance
An estimate for the 2026 tax year. State supplemental figures from the verified dataset, last verified 2026-07-24. Nothing you enter is stored. Not tax advice.