Payroll and Benefits Guide United States – Illinois
Last updated: Mar 03, 2026
Contribution
| Employer Payroll Contributions | |
| 0.75% – 7.85% | State Unemployment Insurance (SUI), applied on the first 13,916 USD of each employee’s wages.Rates are determined based on the employer’s experience rating and the applicable tax schedule. |
| 3.65% or 3.75% | State Unemployment Insurance – New Employer, applied on the first 13,916 USD of each employee’s wages. |
| 6.20% | Federal Insurance Contributions Act (FICA) - Social Security, applied on salary up to 176,100 USD per year. |
| 1.45% | Federal Insurance Contributions Act (FICA) – Medicare.
An additional 0.9% should be withheld from employees earning above 200,000 USD per year. |
| 0.60% – 6.00% | Federal Unemployment Tax Act (FUTA), applied on salary up to 7,000 USD per year.Employers who pay their state unemployment tax in full and on time are eligible for a 5.4% tax credit, reducing the FUTA rate to 0.6%. |
| 12.65% – 25.25% | Total Employment Cost |
| Employee Payroll Contributions | |
| 6.20% | Federal Insurance Contributions Act (FICA) - Social Security, applied on salary up to 176,100 USD per year. |
| 1.45% | Federal Insurance Contributions Act (FICA) – Medicare.An additional 0.9% should be withheld from employees earning above 200,000 USD per year. |
| 7.65%-8.55% | Total Employee Cost |
| State Employee Income Tax | Annual |
| State Tax – Single & Married – Joint Filing | |
| 4.95% | Flat Tax Rate |
| Personal Exemption | |
| Per Taxpayer | 2,850 USD |
| Federal Employee Income Tax | Annual |
| Federal Tax – Singles | |
| 10.00% | Up to 11,925 USD |
| 12.00% | 11,925 – 48,475 USD |
| 22.00% | 448,475 – 103,350 USD |
| 24.00% | 103,350 – 197,300 USD |
| 32.00% | 197,300 – 250,525 USD |
| 35.00% | 250,525 – 626,350 USD |
| 37.00% | Above 626,350 USD |
| Federal Tax – Married – Joint Filing | |
| 0.00% | Up to 23,850 USD |
| 12.00% | 23,850 – 96,950 USD |
| 22.00% | 96,950 – 206,700 USD |
| 24.00% | 206,700 – 394,600 USD |
| 32.00% | 394,600 – 501,050 USD |
| 35.00% | 501,050 – 751,600 USD |
| 37.00% | Above 751,600 USD |
| Federal Tax – Heads of Household | |
| 10.00% | Up to 17,000 USD |
| 12.00% | 17,000 – 64,850 USD |
| 22.00% | 64,850 – 103,350 USD |
| 24.00% | 103,350 – 197,300 USD |
| 32.00% | 197,300 – 250,500 USD |
| 35.00% | 250,500 – 626,350 USD |
| 37.00% | Above 626,350 USD |
| Standard Deduction and Personal Exemption | |
| 15,000 USD | Single |
| 30,000 USD | Married Filing Jointly |
| 22,500 USD | Head of Household |
Minimum Wage
General
The minimum wage in Illinois is 15.00 USD per hour.
The Federal minimum wage rate is 7.25 USD per hour.
Payroll
Payroll Cycle
In general, employees in Illinois are paid semi-monthly or monthly. When the pay cycle is semi-monthly, the employee must make the payment within 13 days before the end of the pay period.
13th Salary
There are no provisions in the law regarding 13th salaries.
Working Hours
General
In Illinois, the workweek is a maximum of 40 hours per week or 8 hours per day.
Overtime
Illinois adheres to the Fair Labor Standards Act (FLSA), and work in excess of 40 hours per week is considered overtime and paid at the rate of 150% of the regular pay.
If employees are scheduled to work on weekends or rest days, no additional payment is required.
However, should an employer request an employee to work in exceptional circumstances on these days, overtime is paid at the rate of 150% of the regular pay.
Leave
Annual Leave (vacation)
Illinois does not have any state laws that govern paid time off. However, it is common for employers to decide whether to offer paid or unpaid vacation leave.
This must comply with employment law and must be stipulated in the collective bargaining agreements, however, on 13 March 2023, the Illinois Governor signed the Paid Leave for All Workers Act (Act), requiring Illinois employers to provide employees with up to 40 hours of paid time off during a 12-month period to be used for any reason, which takes effect on 1 January 2024.
Public Holidays
Public holidays are not mandatory paid days off, but employers commonly allow workers to take federal holidays as paid days off.
Some companies might also agree to allow workers to take off state holidays; workers can find specific state holiday dates from their local government.
Usually when an agreed public holiday falls on a weekend, a day off in lieu is given on the Friday before or the Monday after the holiday.
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 Jan 2025 | Wednesday | New Year’s Day | |
| 20 Jan 2025 | Monday | Martin Luther King Jr. Day | |
| 17 Feb 2025 | Monday | Presidents Day | |
| 26 May 2025 | Monday | Memorial Day | |
| 19 Jun 2025 | Thursday | Juneteenth | |
| 4 Jul 2025 | Friday | Independence Day | |
| 1 Sep 2025 | Monday | Labor Day | |
| 13 Oct 2025 | Monday | Columbus Day | |
| 11 Nov 2025 | Tuesday | Veterans Day (applicable to veterans and active military only) | |
| 27 Nov 2025 | Thursday | Thanksgiving Day | |
| 28 Nov 2025 | Friday | Day After Thanksgiving | |
| 25 Dec 2025 | Thursday | Christmas Day |
Sick Days
It is common for an employer to follow the Family and Medical Leave Act (FMLA) which provides certain employees with up to 12 weeks of unpaid, job-protected leave per year for certain family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child).
Employees are eligible for FMLA if they have worked for their employer for at least one year, completed a minimum of 1,250 hours over the past year, and worked at a location where the company employs 50 or more employees within 75 miles.
FMLA eligible employees are entitled to:
- 12 working weeks of leave in any one year for a child’s birth and to care for the newborn child within one year of birth.
- Leave for the adoption or foster care of a child and care for the newly placed child within one year of placement.
- Care for the employee’s spouse, child, or parent who has a severe health condition.
- Leave in the event of a serious health condition that makes the employee unable to perform the essential functions of their job.
- Any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty.”
Or
- 26 working weeks of leave during a single one-year period to care for a covered service member with a serious injury or illness if the eligible employee is the service member’s spouse, son, daughter, parent, or next of kin (military caregiver leave).
In addition to the FMLA, employers with more than 16 employees must provide one hour of paid sick leave for every 30 hours worked, up to a maximum of 48 hours of paid sick leave.
Illinois has an exception for Chicago and Cook County. Employees are entitled to 1 hour of paid sick leave for every 40 hours worked, with a maximum annual accrual of 40 hours.
Employees can carry over 20 hours of paid sick leave however, the employee is FMLA eligible, employees may carry over an additional 40 to use for FMLA leave.
To be eligible for paid sick leave, employees must work for their employer for six months, at least 2 hours within the city or the county in any two weeks, and at least 80 hours during any 120 days.
Maternity Leave
Maternity leave falls under the FMLA (see Sick Leave).
Paternity Leave
Paternity leave falls under the FMLA (see Sick Leave).
Parental Leave
Parental leave falls under the FMLA (see Sick Leave).
Other Leave
- Jury Duty: Full-time employees are entitled to job-protected, unpaid leave for jury duty or as a witness in a case, responding to a subpoena, or acting as a plaintiff or defendant in the courts. Employees must provide a copy of the jury summons to the employer as evidence of requirement, giving a minimum notice of 10 days.
- Voting Leave: Employees who are registered to vote must be allowed up to two hours of paid leave to vote in a general or special election between the opening and the closing hours of polls. In Illinois, polls are open from 6:00 a.m. to 7:00 p.m. Employees must provide reasonable notice to their employers to take time off to vote.
- In addition to the federal law USERRA, Illinois law provides protection against discrimination for members of U.S. armed forces, reserves, National Guard, commissioned corps of the public health service, and any other category of persons designated by the president in a time of war or emergency.
- The Illinois Service Member Employment and Reemployment Rights Act (ISERRA) applies to the Armed Forces of the United States or National Guard, but also anyone on state active duty or service for any federally recognized auxiliary of the United States Armed Forces when performing official duties in support of military or civilian authorities as a result of an emergency.
- The Illinois Family Military Leave Act provides unpaid family military leave to an employee who is the spouse, parent, child, or grandparent of a person called to military service lasting longer than 30 days. The State of Illinois requires employers with 15-50 employees to have 15 days of leave and 30 days of leave for employers with more than 50 employees. In the case of a bereavement, an employee must provide notice at least two days before the leave is due and may be required to provide an employer with appropriate documentation, such as a death certificate or published obituary. This leave entitles the employee to attend the funeral or alternative to a funeral, plans necessitated by the death, or grieve the child’s death. The Child Bereavement Leave Act (under the Family and Medical Leave Act) requires employers with more than 50 employees to provide their employees who have suffered the loss of a child with up to two weeks (10 working days) of unpaid bereavement leave. The leave will increase to 6 weeks should the same employee lose more than one child during a 12-month period. Employees must use the leave within two months of the child’s death.
Termination
Termination Process
Except in mass dismissals or as provided for in an employment contract or a collective bargaining agreement, U.S. law does not impose a formal “notice period” to terminate an individual employment relationship, and employment is stipulated “at will.”
This means that either the employer or the employee may end the employment relationship without giving either notice or reason, provided it is not illegal, notable discrimination on the grounds of a category protected by law, etc., and as per the Federal Worker Adjustment and Retraining Notification Act (WARN).
The employment contracts of executives and other highly skilled individuals often incorporate a “just cause termination” clause which mandates that the employer may only terminate the employee for “cause” and lists the permissible grounds.
In such cases, the parties negotiate the foundations for a “just cause” termination.
| Salary payment interval / date | Final payment on termination | Bank account/payment-method requirement |
|---|---|---|
Wages must be paid at least semi-monthly, and for those pay periods:
|
Upon separation (termination or resignation), all “final compensation” (wages, commissions, earned bonuses, monetary equivalent of vacation) must be paid at the time of separation if possible and in no event later than the next regularly scheduled payday for the employee. | Wages and final compensation must be paid in lawful money and may be by check redeemable on demand, by deposit into a bank/financial institution account designated by the employee, or by payroll card (subject to statutes for payroll cards). The law does not mandate payment only via bank account for all employees. |
Notice Period
In Illinois, most employees are employed “at-will,” and either party can terminate the employment relationship without notice.
An employer’s policy or employee contract governs whether earned or unused vacation is paid on separation.
While there is no official notice period standard practice is 2 weeks.
In mass dismissal cases the Worker Adjustment and Retraining Notification Act (WARN Act) must be followed, and employers must give 60 days’ notice to impacted employees.
Severance Pay
Except as otherwise provided in an employment contract or collective bargaining agreement, severance pay is not required.
Many employers choose to offer severance pay based on the employee’s length of employment.
Probation Period
There are no provisions in the law regarding probation or trial periods.
However, it is common practice for employers to set a performance evaluation after an initially stated period of employment of 90 days.
Minimal Statutory Termination Costs
Some states require PTO balances to be paid out during termination, also any bonuses or commissions that were promised in the employment contract
Immigration
Foreign nationals without permanent resident status or a work visa are not permitted to work in the United States.
An employer seeking to hire a foreign national may file a petition with the United States Department of Homeland Security/United States Citizenship and Immigration Services (USCIS) for an employment visa on behalf of the prospective employee.
If the petition is approved, the prospective employee must obtain a “visa stamp” from a United States embassy or consulate (Canadian citizens are exempt from this requirement).
To get a temporary U.S. work visa, an employer must file a petition with U.S. Citizenship and Immigration Services (USCIS).
An approved petition must be part of the visa request. The types of visas include:
- H-1B – for applicants with a college degree hired to do specialized work. The visa is valid for three years and can be extended for an additional three years. The visa is connected to the employer that filed the petition. If there is a change of employer, the new employer must repeat the process. There are 65,000 H-1B visas available each year.
- H-1B1 – for applicants with a college degree from Chile and Singapore. The US government grants up to 1,400 visas to Chilean citizens and 5,400 from Singapore each year.
- H-2A – for temporary or seasonal agriculture work. It is limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
- H-2B – for temporary non-agricultural work. These visas are limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
- L – for intercompany transfers (people transferred from a foreign company to a US branch of the company.) The applicant must have been employed at the company for a year before the transfer and work in a managerial level position or higher with specialized knowledge.
- 0 – for people with extraordinary ability in science, arts, education, business, or athletics.
The standard procedure is to obtain a short-term work visa and then apply for an immigrant visa after the employee has started working in the United States.
For those seeking employment-based immigrant visas:
- E-1 – highest priority employment for those with extraordinary ability in science, arts, education, business, and athletics.
- E-2 – for those with advanced degrees or exceptional ability.
- E-3 – for skilled workers and professionals, as well as unskilled workers.
- E-4 – members of certain immigrant groups.
- E-5 – immigrant investors in US companies (substantial investment).
Alternatively, an employer may sponsor a potential employee’s application for permanent resident status, referred to as a “green card,” if the employee can establish that the potential employee is a multinational executive/manager transferee, has unique skills, or has been offered a job in the United States.
The employer must have been unable to recruit a U.S. worker who meets the position’s minimum requirements.
All employers are obligated to verify that all individuals they employ are authorized to work in the United States.
VAT
General
Illinois has a State sales tax of 6.25%. Municipalities can add up to 4.75% in Local sales tax.
Stay up to date on payroll & employment law changes
Version History
Payroll contributions and personal income tax rates have been updated.
VAT: Illinois minimum combined sales tax rate of 7.821% (state tax at 6.25% and local tax is between 0% and 4.75%).
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Payroll and Benefits Guide
in United States – Illinois
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 Jan 2025 | Wednesday | New Year’s Day | |
| 20 Jan 2025 | Monday | Martin Luther King Jr. Day | |
| 17 Feb 2025 | Monday | Presidents Day | |
| 26 May 2025 | Monday | Memorial Day | |
| 19 Jun 2025 | Thursday | Juneteenth | |
| 4 Jul 2025 | Friday | Independence Day | |
| 1 Sep 2025 | Monday | Labor Day | |
| 13 Oct 2025 | Monday | Columbus Day | |
| 11 Nov 2025 | Tuesday | Veterans Day (applicable to veterans and active military only) | |
| 27 Nov 2025 | Thursday | Thanksgiving Day | |
| 28 Nov 2025 | Friday | Day After Thanksgiving | |
| 25 Dec 2025 | Thursday | Christmas Day |
Questions & Answers