How to Do Payroll in Illinois
A plain-English walkthrough of how to do payroll in Illinois: EIN, IDES and MyTax registration, IL-W-4 withholding, pay frequency, deposits, and W-2 filing.
Federal payroll rules, state-specific taxes, wage and hour law, and filing deadlines, explained in plain English for Illinois small business owners, not accountants.
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Every employer owes federal payroll taxes, FICA and FUTA, on top of whatever Illinois requires, whether that's state income tax withholding, unemployment insurance, or another state-specific program.
Minimum wage, overtime, final paycheck timing, and pay stub requirements can all differ from the federal baseline. Getting the Illinois-specific rule wrong is one of the most common (and costly) payroll mistakes.
Late deposits, missed filings, and new-hire reporting misses each carry their own penalties. Knowing the Illinois filing calendar in advance is the easiest way to avoid them.
A plain-English walkthrough of how to do payroll in Illinois: EIN, IDES and MyTax registration, IL-W-4 withholding, pay frequency, deposits, and W-2 filing.
Step-by-step guide to registering with Illinois IDES as a new employer. Get your employer account number, understand SUI rates, and learn quarterly UI-3/40 filing requirements.
Learn how Illinois income tax withholding works for employers in 2026 — flat 4.95% rate, IL-W-4 form, IL-941 filing via MyTax Illinois, payment schedules, and the Chicago head tax.
Illinois minimum wage rates for 2026: statewide $15.00/hr, Chicago $16.20/hr, youth $13.00/hr, and tipped $9.00/hr. Complete employer guide with compliance tips.
Exact steps for Illinois new employer registration: federal EIN, a MyTax Illinois withholding account, IDES registration, and new hire reporting.
Complete guide to Illinois payday laws for 2026. Pay frequency requirements, semi-monthly timing rules, final paycheck deadlines, Wage Payment and Collection Act, strict deduction rules, pay stub requirements, and direct deposit rules.
Complete Illinois payroll compliance guide for 2026 — IDES SUI rates, income tax 4.95%, PFML launching 2026, $14/hr minimum wage, Chicago $16.20/hr, IDES registration, and compliance calendar.
Complete guide to Illinois payroll taxes for 2026 — flat 4.95% income tax withholding, SUI rates 0.675%–6.875% via IDES, no SDI program, filing schedules, and payment portals.
Illinois SUI rates for 2026: new employer rate 3.175%, experienced range 0.675%–6.875%, $13,271 wage base. Learn how IDES calculates your rate and how to keep it low.
Official Illinois payroll agency directory for employers: tax registration, unemployment insurance, new-hire reporting, and wage-and-hour contacts in one place.
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| Minimum wage | $15.00 |
|---|---|
| State income tax withholding | Illinois Form IL-W-4 |
| SUI new-employer rate | 3.350% |
| SUI taxable wage base | $14,250 |
| Payday frequency rule | Wages must be paid at least semi-monthly, no later than 13 days after the end of the pay period (executive/administrative/professional employees and commissions may be paid monthly). |
| New-hire reporting deadline | 20 days |
Verified 2026-07 against official Illinois sources.
Every Illinois employer owes federal payroll taxes: Social Security and Medicare withholding under FICA, and federal unemployment tax (FUTA), regardless of what Illinois itself requires. On top of that federal baseline, most states layer on their own obligations: income tax withholding, state unemployment insurance (SUI), and in some cases disability or paid-leave programs. Whether each of these applies, and at what rate, depends on Illinois law. The first step for any new employer is registering with the right state agencies before running the first payroll. Our new employer payroll setup checklist walks through that process.
Minimum wage and overtime rules start with the federal Fair Labor Standards Act (FLSA), but Illinois may set a higher minimum wage, stricter overtime triggers, or additional rules around tipped employees and meal or rest breaks. Overtime is generally 1.5 times the regular rate after 40 hours in a workweek under federal law, though some states calculate it differently. The FLSA employer guide covers the federal floor that every employer must meet before layering on Illinois-specific requirements.
Final paycheck timing, new hire reporting deadlines, and pay stub requirements also vary by state. Missing a new hire report or paying a final check late can trigger penalties even when the payroll math itself was correct. New hires must be reported to the state's new hire registry, typically within a short window of the hire date, and every employer needs a state UI account number before the first unemployment filing is due.
For ongoing compliance, most employers file federal Form 941 quarterly, deposit federal withholding on a schedule based on prior-year liability, and file state withholding and unemployment returns on whatever schedule Illinois assigns. Our federal payroll compliance checklist lays out the recurring tasks by frequency: new hire, every payroll, monthly, quarterly, and annual.
Rates, wage bases, and deadlines change from year to year and are specific to Illinois. See the guides below for current Illinois figures, or check directly with your state's revenue and labor agencies before filing.
Employers in Illinois pay federal payroll taxes: Social Security and Medicare (FICA) and federal unemployment tax (FUTA), plus any state-level payroll taxes that apply, such as state income tax withholding and state unemployment insurance (SUI). Rates and wage bases vary and change annually, so always confirm current figures with your state's labor and revenue agencies.
Minimum wage in Illinois is set by a combination of federal and state law, and the higher of the two rates always applies. Rates are reviewed regularly and can change from year to year, so check your state labor department's website for the current figure before running payroll.
New employers generally need a federal Employer Identification Number (EIN) from the IRS, plus registration with Illinois's revenue department for state income tax withholding (where applicable) and its labor or workforce agency for state unemployment insurance. See our Illinois guides for step-by-step registration instructions.
This site is for general informational purposes only and does not constitute legal, tax, or professional advice. Employment laws, tax regulations, and compliance requirements change frequently and may not be reflected here. Always consult a qualified attorney, CPA, or HR professional familiar with Illinois law before making payroll or compliance decisions for your business.