Dayton
Dayton's income tax is 2.5%, per the city's individual return and its employer reconciliation form. Employers withhold and remit monthly or quarterly and reconcile once a year on Form DW-3, due on or before February 28. Montgomery County's combined sales tax rate is 7.50% for October 1 to December 31, 2026, and Ohio taxes residential and commercial cleaning except for a provider with less than $5,000 in calendar-year sales of it.
Payroll is where Dayton's city tax lands, and the county rate lands on taxable invoices. This page covers the city tax and its forms, the Montgomery County rate, the state wage change in January, and what it means for your books. State payroll registration is on my Ohio page.
The 2.5% rate appears on two city forms: the City of Dayton Individual Income Tax Return (Form R-1, Rev 09/2025) and the employer annual reconciliation (Form DW-3, Revised 1/2021). Employers withhold and remit monthly or quarterly using the DW-1 withholding form, then reconcile on the DW-3, due on or before February 28. The City of Dayton Division of Tax and Accounting Administration runs it.
The rate rests on those two forms rather than on a dated city web page, and the R-1 has no tax year filled in. This page doesn't cover the cutoff between monthly and quarterly remitting, or whether Dayton requires a separate business registration.
Source: City of Dayton, City of Dayton Individual Income Tax Return, Form R-1 (Rev 09/2025)
The Ohio Department of Taxation's county table for October 1 to December 31, 2026 puts Montgomery County's combined state and local rate at 7.50%. Under R.C. 5739.01, a provider with less than $5,000 in sales of this service in a calendar year isn't providing taxable building maintenance and janitorial service; otherwise, Ohio taxes residential and commercial cleaning. Snow and ice removal from parking lots, driveways, and sidewalks isn't janitorial service, though snow removal is a separately taxable service once the provider's sales exceed $5,000 in a calendar year. The rest is on my Ohio sales tax page.
Source: Ohio Department of Taxation, Sales and Use Tax Rates by County, October 1, 2026 to December 31, 2026
Source: Ohio Revised Code 5739.01 Definitions
With no local minimum wages in Ohio, the state rate covers Dayton crews: $11.00 an hour in 2026, with January 1 as an inferred effective date since the 2026 poster states none and the Ohio Constitution sets annual increases on that day. The Department of Commerce's 2027 poster sets $11.40 starting January 1, 2027. The same poster also moves the small-employer gross receipts threshold to $419,000.
Source: U.S. Department of Labor, Wage and Hour Division, State Minimum Wage Laws (2026-07-01)
Source: Ohio Revised Code 4111.02
Source: Ohio Constitution Article II, Section 34a
The DW-3 is an annual reconciliation, so the books keep a liability account for Dayton tax alone, apart from Ohio withholding. When February comes, I want every single dollar on that form to tie back to a pay run and a payment, with nothing left to explain. Collected sales tax stays in its own account, out of revenue, and taxable sales are tracked year to date against the $5,000 line. Labor goes in at the wage actually paid; my payroll page shows how.
I'm a bookkeeper, not a CPA or an Enrolled Agent. I keep the city withholding and the sales tax recorded and separate; whether you remit monthly or quarterly, where you stand against the $5,000 line, and how the DW-3 and sales tax returns get filed are questions for your CPA.
Rules checked against the sources above as of October 20, 2026. Rates and rules change; confirm current figures with the agency or your CPA.
About Figure Eight Financial
Figure Eight Financial is Dave Gordon’s bookkeeping practice for residential and commercial cleaning companies. I work with owners in Dayton and across the country, and I’m a Certified QuickBooks Online ProAdvisor.
Before bookkeeping I studied computer science at Penn State and spent a career at IBM as an engineer, so I build the books as a system: data comes in once, lands in the right place, and ties back to a statement. I’m a bookkeeper, not a CPA or Enrolled Agent. I keep the books your CPA works from, and the tax decisions stay with your CPA.
Credentials and memberships reported by Figure Eight Financial.
More about DaveHow I Help
Dayton's annual DW-3 is easier to face when the year's city withholding already sits in one liability account. That withholding is recorded apart from Ohio's, collected sales tax stays out of income, and taxable sales are tracked against the $5,000 line. Book a short call below and we'll look at where your Dayton numbers stand.
The core service. Transactions recorded and categorized, every account reconciled so the books and the bank agree, and monthly reports that arrive explained, split by residential and commercial and sliceable per contract.
The full picture of how this works for a cleaning companyFor the months where nothing got entered at all. I fill in the missing periods from the ground up, pulling bank feeds, statements, and receipts until every month has a complete set of records.
How catch-up bookkeeping worksFor books that exist but can’t be trusted. I audit what’s there, fix the unreconciled accounts, duplicate transactions, and wrong categories, and tie every balance back to a statement.
How cleanup bookkeeping worksYour crews paid on time, every pay period, with each payroll run recorded in the books so labor shows up against the jobs it belongs to.
How payroll worksRecurring invoices that match your contracts, an aging report you can trust, and follow-up on slow payers handled by a process instead of your evenings. Built for net-60 commercial accounts.
How invoicing and receivables workA file built right for a cleaning company from day one, or rebuilt after the DIY version drifts, and then I teach you to run it. I’m a Certified QuickBooks Online ProAdvisor, and this is honestly my favorite part of the job.
How a proper setup worksWe start with a short call about your business and where the books stand. The first conversation doesn’t cost anything.
I take a look at what you’ve got, your QuickBooks file, your spreadsheet, whatever exists.
You get a written proposal with the price, so the decision is yours with the number in hand.
Let's Connect
Cleaning in Dayton with a DW-3 coming up in February? Tell me how the year's withholding is tracked now. The first conversation doesn't cost anything.
