Clayton to Dayton
Ohio municipal income tax, Chapter 718 framework · credit set by Clayton ordinance · tax year 2026
Work city takes
2.5%
Dayton, on income earned there
Home city charges
2.5%
Clayton, residents
Credit back
$1,500
a share of the work tax
Cost of the commute
$0
a year, above working at home
What it costs you
no extra local taxClayton credits only part of what Dayton takes, so the remainder is taxed twice. Solid is what you pay; the faded part of the Clayton bar is the credit it hands back. Municipal income tax only — state, federal and payroll tax apply on top, and an Ohio school district income tax may too.
What this commute actually costs
- Here is the good news. Working in Dayton costs you nothing extra in local tax. Clayton charges residents about 2.5%, and it credits back every dollar Dayton collects from you. Either way your bill is $1,500 a year. What changes is which city keeps the money, not how much of it you hand over.
- Nothing to pay, and nothing to spare. Clayton's credit stops precisely where Dayton's tax stops. The two cancel exactly, which is a comfortable place to be and a fragile one.
- Dayton pulls workers in from 11 different places, and this route from Clayton ranks 4 of them by size. About 1,385 people travel it. Being busier does not make it cheaper. The rate you pay depends on your home city, not on how crowded your road is.
- This pairing is neutral to the worker. Dayton withholds about 2.5% on income earned there, and Clayton, which levies about 2.5% on residents, credits that payment in full without reaching its own ceiling. Liability at the reference salary is therefore $1,500 — precisely what the same earnings would attract with no commute at all. What the arrangement alters is the division of revenue between Dayton and Clayton, not the sum leaving the worker's pay.
- This pairing sits exactly on its limit. Dayton's rate and the ceiling Clayton places on its credit coincide to the cent, so the credit absorbs the work-city tax precisely and not a dollar further. The commute is costless today and has no margin whatsoever: any increase by Dayton, or any reduction in the ceiling by Clayton, falls directly on the worker from the first dollar.
- Dayton is a major regional workplace, drawing recorded flows from 11 separate origins in this dataset. The route from Clayton ranks 4 among them by worker count, at roughly 1,385. Rank is not a proxy for tax outcome: every origin faces the same Dayton rate, and what differs between them is the home municipality's credit, so a smaller route can carry a considerably worse result than a larger one.
Where the money goes
A $75,000 salary
- Federal income tax$7,670
- Social Security and Medicare$5,738
- State income tax$1,346
- Yours$60,246
| Federal income tax10.23% | $7,670 |
|---|---|
| Social Security and Medicare7.65% | $5,738 |
| State income tax1.79% | $1,346 |
| Yours80.33% | $60,246 |
The arithmetic, step by step
| Dayton takes, on income earned there | $1,500 |
|---|---|
| Clayton charges residents | $1,500 |
| Less the credit Clayton gives back | $1,500 |
| Total local tax | $1,500 |
| If you also lived in Dayton | $1,500 |
| Difference | $0 |
On a reference salary of $60,000 a year. Both rates and the credit ceiling are shares of income, so every figure scales with your own pay.
What this page does not cover
- Do not add the two rates up, and do not assume the bigger one simply wins. Neither is how Ohio works. Both Dayton and Clayton charge you. Clayton may then hand back what Dayton took, or part of it, or none of it. Everything on this page turns on which of those it does.
- The credit rule on this page belongs to Clayton, not to the state. Its council sets it and its council can change it. Nothing needs to happen in Dayton or at the state level for these numbers to move. Check the current rule before you rely on it.
- This page covers city income tax only. Your school district may charge its own on top, and many in Ohio do. That one follows your address in Clayton rather than your workplace in Dayton, and it is not credited against anything.
- Do not read this as your whole tax bill. It is the part that answers to the commute between Clayton and Dayton. State and federal tax carry on regardless, unchanged by which side of a city line your desk is on.
- The dollar figures rest on one assumed salary, sixty thousand. Double your pay and they double. Halve it and they halve. What stays put is the relationship between what Dayton charges and what Clayton gives back, which is the part worth carrying away.
- Two misreadings bracket the correct answer and both are common. Ohio does not simply add the two rates together, which would overstate the charge; nor does it apply only the higher of them, which is Pennsylvania's rule and would understate it wherever the credit is partial. Dayton taxes what is earned within its boundaries, Clayton taxes its residents on everything, and Clayton then credits some, all or none of what Dayton collected. The credit is the entire mechanism, and it is set by Clayton rather than by the state.
- The credit rule modeled here is Clayton's own, adopted by ordinance and amendable by Clayton alone. Ohio's uniform framework governs definitions, filing and withholding; it does not compel any municipality to credit tax paid to another. A council vote in Clayton can therefore change every figure on this page without anything altering in Dayton or in state law, which is a materially different exposure from a rate set by statute.
- Ohio school district income tax is a separate levy from municipal income tax and is excluded from these figures. It is imposed by school district of residence rather than by municipality, it is unaffected by employment in Dayton, and no municipal credit applies to it. A resident of Clayton whose school district levies one owes it in addition to everything shown here, which is why the totals on this page are a municipal position rather than a complete local one.
- Only municipal income tax is modeled. Ohio's state income tax, federal income tax and payroll taxes all apply in addition and are invariant to the boundary between Clayton and Dayton, which is precisely why they are excluded: isolating the layer that responds to the commute is the point of the comparison. A complete tax position requires adding them; a comparison of the two locations does not.
- Dollar figures are computed against a stated reference salary of sixty thousand rather than a municipal wage average, which no published source provides for Ohio municipalities. Both rates and the credit ceiling are proportional to income, so every figure scales linearly: the Clayton to Dayton differential doubles at twice the salary and halves at half of it, and the rate relationship holds at every level. The one caveat is that whether the ceiling binds at all is itself scale-invariant here, because it too is expressed as a share of income rather than as a fixed dollar cap.
Questions people ask
Do I pay local tax twice — once where I work and once where I live?
Both places charge you, but the city you live in gives back some of what the other one took. Dayton taxes you for working there at about 2.5%; Clayton then charges its own about 2.5% and credits part of the first against it. Whether anything is left over depends on how generous that credit is.
Does working in a different town cost me anything?
Nothing extra. The tax is redirected rather than increased, so this particular crossing costs you no more than working in Clayton would.
Is this a common enough commute to be worth modeling?
Yes — 1,385 people make this exact journey, according to the federal employment survey that tracks where workers live against where they work. Routes below a volume floor are not published, so a page existing here means the commute is real and measured.
Both towns charge the same — does the boundary matter at all then?
Not for what you pay. Both sides charge about 2.5%; the line only determines who banks it.
How does a resident credit allocate liability between two municipalities?
Both jurisdictions assert a claim: Dayton on the basis of work location at about 2.5%, Clayton on residence at about 2.5%. The residence municipality grants a credit for tax paid to the work municipality, commonly capped as a share of income. Net liability is the residence tax less that credit, floored at zero, plus the work tax.
Why is the marginal cost of this crossing zero?
Marginal liability from working outside the residence jurisdiction is zero on this route. The crossing alters the distribution of revenue between jurisdictions but not the employee's total. ⚠️ This is route-specific and does not generalise to other pairs in the same dataset.
What is the basis for including this route?
Route volume is 1,385 workers, sourced from Census LODES origin-destination data. Pairs below the publication threshold are excluded rather than imputed, so page existence reflects measured commuting volume.
What is the effect of identical rates either side of the boundary?
Both jurisdictions levy about 2.5%, so the governing rate is identical regardless of which rule allocates it. The boundary affects revenue attribution between authorities, not employee liability.