Illinois Payroll Taxes (2026)
What comes out of a Illinois paycheck, what the employer pays on top, and the wage bases and rates that apply for the 2026 tax year. Written for whoever has to reconcile the numbers — employee or employer.
Tax year 2026 · Updated 2026-08-29 · Illinois tax authority
Employee-side taxes in Illinois
| Tax | Rate | 2026 limit |
|---|---|---|
| Federal income tax | Publication 15-T percentage method from Form W-4 | Varies |
| Social Security | 6.2% of wages | $184,500 wage base |
| Medicare | 1.45% of all wages | No cap |
| Additional Medicare Tax | 0.9% above $200,000 of wages | Employee only |
| Illinois income tax | Flat 4.95% of taxable income | Withheld each pay period |
On a $60,000 salary, a single filer in Illinois has about $12,435 withheld across the year and takes home $47,565. The Illinois paycheck calculator breaks it down per paycheck.
Employer-side taxes in Illinois
| Tax | Rate | Wage base | Cost on a $60,000 employee |
|---|---|---|---|
| Social Security (employer match) | 6.2% | $184,500 | $3,720 |
| Medicare (employer match) | 1.45% | No cap | $870 |
| FUTA (federal unemployment) | 0.6% effective after the 5.4% credit | $7,000 | $42 |
| IL SUI (new employer rate) | 3.45% | $13,916 | $480 |
Employing someone on $60,000 in Illinois therefore costs roughly $5,112 above salary in payroll tax alone — about 8.5% of pay — before benefits, workers' compensation or equipment. Experience rating means an established employer's SUI rate can be well above or below the new-employer figure shown here.
Unemployment insurance in Illinois
The Illinois taxable wage base for 2026 is $13,916 per employee, and the new-employer rate is 3.45%. That is at the low end nationally, which keeps unemployment tax to a small fixed cost per employee.
Employers in a federal credit reduction state lose part of the 5.4% FUTA credit and pay more than the standard 0.6%. The list is published with Form 940 Schedule A after year end and changes annually.
Illinois minimum wage and pay rules
The Illinois minimum wage for 2026 is $15.00 an hour. Illinois reached $15.00 in 2025; Chicago and Cook County set higher local minimums. Overtime follows the federal rule of one and a half times the regular rate after forty hours in a workweek.
Registration and filing
An employer with staff in Illinois generally needs a state withholding account, a state unemployment insurance account, and must report new hires to the state directory within the statutory window — twenty days under federal law, shorter in several states. Deposit schedules for state withholding depend on the size of your liability and are set by the state; federal deposit schedules are monthly or semi-weekly based on your lookback period.
Details and forms are on the Illinois revenue authority site. Nothing here is a substitute for their current publication — rates and thresholds change, sometimes mid-year.
Frequently asked questions
What payroll taxes do employers pay in Illinois?
The employer half of Social Security and Medicare at 7.65%, FUTA at an effective 0.6% on the first $7,000 of wages, and Illinois unemployment insurance on the first $13,916 of each employee's wages at an experience-rated percentage.
What is the Illinois SUI wage base for 2026?
$13,916 per employee. The new-employer rate is 3.45%; established employers are experience rated.
Does Illinois have a state income tax to withhold?
Yes. Illinois has no standard deduction; the flat rate applies above a per-allowance exemption.
How much does an employee really cost in Illinois?
Payroll taxes alone add about 8.5% to a $60,000 salary. Benefits, workers' compensation, equipment and space typically take the full loaded cost to 1.25 to 1.4 times salary.
Related
For the employee view, the Illinois paycheck calculator shows every line on a Illinois paycheck. The employer payroll tax calculator covers the employer side generally.