Illinois Payroll Compliance
Every rate, wage base, and local override Illinois employers need for 2026 — sourced from IDOR, IDES, the Illinois Dept. of Labor, and the City of Chicago — including the three-tier wage system that trips up multi-location employers.
Minimum Wage & Hours
Illinois’s statewide minimum wage completed its scheduled climb on January 1, 2025, reaching $15.00/hour, where it holds through 2026 — the final step of the 2019 schedule enacted by Public Act 101-0001. No further statewide increase is scheduled without new legislation. Chicago and Cook County both set their own higher local rates (see below).
| Item | 2026 Value | Notes |
|---|---|---|
| Statewide minimum wage | $15.00/hr | Held flat since Jan 1, 2025; no scheduled increase |
| Tipped cash wage (statewide) | ~$9.00/hr | Tip credit up to 40% permitted where no local ordinance applies |
| Youth wage (under 18, <650 hrs/yr) | $13.00/hr | Statewide; does not apply within Chicago or Cook County ordinances |
| Overtime rule | 40 hrs/week | Federal FLSA; Illinois has no daily overtime threshold |
| Pay frequency | Semi-monthly / biweekly | Illinois Wage Payment & Collection Act; paid within 13 days of period end |
| Statute | 820 ILCS 105 | Illinois Minimum Wage Law |
Chicago & Cook County Wage Rules
Illinois runs a genuine three-tier wage system. Chicago sets its own rate for employers with 4+ employees, adjusted every July 1 by CPI (capped at 2.5%). Cook County sets a separate, lower rate that applies to suburban Cook County — but not inside Chicago, and more than 100 Cook County municipalities have opted out of the county ordinance entirely, reverting those towns to the state rate. Employers must check the specific municipality, not just the county.
| Jurisdiction | 2026 Rate | Notes |
|---|---|---|
| Chicago (4+ employees) | $17.05/hr | Effective July 1, 2026; up from $16.60 |
| Chicago tipped | $12.96/hr | Tip credit paused at 24% through June 30, 2028 |
| Chicago (1–3 employees) | $15.00/hr | Falls back to the Illinois state rate |
| Cook County (non-Chicago) | $15.40/hr | Effective July 1, 2026; ~100+ municipalities have opted out |
| Cook County tipped | $9.25/hr | Tip credit still permitted at the county level |
| Rest of Illinois | $15.00/hr | Statewide rate applies |
State Income Tax Withholding
Illinois applies a single flat 4.95% rate to all taxable wages — no brackets to look up, regardless of income level. Chicago imposes no separate city income tax, so 4.95% is the entire state-and-local withholding calculation anywhere in Illinois.
| Item | 2026 Value | Notes |
|---|---|---|
| Withholding rate | 4.95% flat | 35 ILCS 5/701; same rate at every income level |
| Line 1 exemption allowance | $2,925 | Per allowance claimed on Form IL-W-4, Line 1 |
| Line 2 additional allowance | $1,000 | Per allowance claimed on Form IL-W-4, Line 2 |
| Required certificate | Form IL-W-4 | No form on file = withhold at 4.95% with zero allowances |
| Employer return | Form IL-941 | Filed quarterly via MyTax Illinois regardless of deposit schedule |
| Deposit frequency threshold | $12,000 lookback | Above this: semi-weekly/monthly deposits; below: quarterly |
| Reciprocity | IA, KY, MI, WI | Residents of these states working in IL may be exempt from IL withholding |
| Local income tax | None | Chicago and all Illinois municipalities are barred from imposing one |
Paid Leave
Illinois has no state paid family or medical leave program (bills have been introduced but not enacted as of 2026), but it does mandate general-purpose paid leave through the Paid Leave for All Workers Act (PLAWA) — and Chicago and Cook County both layer their own, richer local ordinances on top.
| Program | Entitlement | Notes |
|---|---|---|
| PLAWA (statewide) | 40 hrs/year | Any reason, no documentation; 1 hr per 40 worked; effective Jan 1, 2024 |
| Chicago Paid Leave Ordinance | 40 + 40 hrs/year | Separate paid-leave AND paid-sick-leave banks; 1 hr per 35 worked; supersedes PLAWA in Chicago |
| Cook County Paid Leave Ordinance | 40 hrs/year | Mirrors PLAWA; applies outside Chicago in non-opt-out municipalities |
| State paid family/medical leave | None | HB3483/SB2413 pending, not enacted as of 2026 |
| Federal FMLA | Applies | Unpaid, job-protected; 50+ employee threshold within 75 miles |
| PLAWA payout at separation | Not required | Unlike accrued vacation, PLAWA leave need not be paid out |
Unemployment Insurance (SUI)
Illinois unemployment insurance is administered by the Illinois Department of Employment Security (IDES), a separate agency from the Department of Revenue that handles withholding — employers must register with both. For 2026, the taxable wage base is $14,250 per employee, confirmed directly on IDES’s own quarterly reporting form.
| Item | 2026 Value | Notes |
|---|---|---|
| SUI taxable wage base | $14,250 | Per employee, per year |
| New employer rate | ~3.2% – 3.6% | Includes the 0.55% Fund Building Rate component — confirm exact figure via IDES EA-50 |
| Experienced employer range | ~0.7% – 7.0% | Based on 3-year benefit charge history; confirm exact range via IDES |
| Quarterly return | Form UI-3/40 | Employer’s Contribution and Wage Report, filed via IDES TaxNet or MyTax Illinois |
| Filing deadlines | Apr 30 / Jul 31 / Oct 31 / Jan 31 | Quarterly, same schedule as most states |
| Registration threshold | $1,500/quarter or 20 wks | Either trigger creates SUI liability |
| State disability insurance | None | Illinois has no state-run short-term disability program |
Official Illinois .gov Resources
Verify every figure and register for accounts at the source. Illinois requires separate registration with IDOR (withholding) and IDES (unemployment) — and Chicago/Cook County employers need a third and fourth set of local resources.