Employer Costs, Take-Home Pay, and Tax Wedge for an Average Manufacturing Wage Worker in OHIO    

Annual Amount


Total Cost to Employer* $29,544 **
Take-Home Pay $22,518 19
Take-Home Pay, % of Employer Costs 76.2% **
Tax Wedge* $7,026 **
Tax Wedge, % of Employer Costs 23.8% **
Gross Earnings $27,200  
Taxes Withheld from Worker's Paycheck    
Social Security/Medicare Payroll Tax $2,081  
Federal Income Tax $2,048  
State Income Tax $554 33
Total Taxes Withheld $4,682  
Hidden Taxes Paid by Employer on Worker's Behalf    
Social Security/Medicare Payroll Tax $2,081  
Workers' Compensation Contribution N/A **
State Unemployment Insurance Tax $207 23
Federal Unemployment Insurance Tax $56  
Total Employer-Paid Taxes N/A  
Employer-Paid (hidden) Share of the Tax Wedge N/A **
Source: Dean Stansel, "The Hidden Burden of Taxation: How the Government Reduces Take-Home Pay," Cato Institute Policy Analysis No. 302, April 15, 1998.    

*Total cost to employer does not include the cost of fringe benefits (such as employer contributions to private health insurance plans and pensions) and tax and regulatory compliance. The tax wedge does not include the host of other taxes--property taxes, sales taxes, gas taxes, cigarette taxes, etc.--that workers must pay with their remaining take-home pay.
**Ohio is one of the seven jurisdictions in which the workers' compensation system does not allow private insurers to provide workers' compensation insurance. Instead, employers must pay into a monopolistic state fund. As a result, comparable estimates of the workers' compensation costs were not available. Therefore, the estimates for total employer costs and the tax wedge in these states are not directly comparable because they do not include an estimate for workers' compensation costs (which were, on average, $1,395). These states were not included in the rankings for those items.


Last Updated on 4/8/98
By Mark LaRochelle