Ohio needs a dedicated state path

Ohio cannot be represented safely in this calculator by one generic flat state percentage. The audited engine uses a dedicated 2026 path that distinguishes business and nonbusiness income where the model requires it before producing the state estimate. That distinction matters in a W-2 versus sole-proprietor comparison because the employee and contractor sides can reach the Ohio calculation with different types of income.

The state-aware result also keeps federal taxable income, state starting income and state taxable income separate. This avoids the shortcut of treating gross salary or gross contractor revenue as if it were automatically the correct Ohio tax base.

Ohio local taxes are outside the statewide result

Ohio compensation decisions can be affected by municipal or other local obligations that vary by location. The statewide calculator does not pretend one local rate applies everywhere. Instead, it keeps the audited statewide income-tax calculation inside the model and leaves location-specific obligations outside the headline break-even result.

If local taxes are material to your situation, treat the calculator’s break-even amount as a starting point and add those costs separately. The same principle applies to business licensing, entity-level costs, industry-specific fees and filing situations that fall outside the documented single-filer sole-proprietor scope.

Break-even is more useful than a rule-of-thumb premium

Enter the W-2 salary, contractor offer, business expenses, health insurance and realistic billable hours. The solver searches for the contractor gross needed to approximately reproduce the W-2 estimated take-home under the same federal and Ohio engine. If the offer falls short, the counter-offer output shows the minimum annual and hourly amount needed to reach modeled break-even.

That minimum is not necessarily the rate you should accept. Contract duration, unpaid time off, benefits, retirement contributions, classification risk and desired profit can justify a margin above the financial floor. Test several billable-hour assumptions before choosing an hourly target.