Paycheck Calculator Illinois - IL

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Illinois - IL Paycheck Calculator: Hourly and Salary

Illinois, A home to world's famous city; Chicago and the very first McDonald's, which you, me, and everyone loves.

This midwestern state is not just about big city living. It has a wide variety of wonders, attractions, and opportunities. Moreover, it also has features like a variety of seasons, unique food trends, numerous museums & rich history, freshwater beaches, and plenty of genuinely groovin' music scenes and sports.

Apart from these tourist attractions, this state offers various job opportunities, especially for Physicians and surgeons, JavaScript developers, Software Developers, machine engineers and developers, food scientists, and much more.

Along with a good job and wonderful outdoor, you'll also be needing a house when you make your move. The median home value of in Illinois is under $185,000, and median rent being $1,550, you won't find it challenging to find an affordable house for you and your family. However, this state has the second-highest effective real-estate tax in the country with a rate of 2.32%.

The cost of living in this state is higher than the national average in some counties but is ranks 21st for the cost of living among other U.S. states (According to 2019 MERIC data series). Therefore, it is still quite reasonable as compared to other cities and states like Los Angeles, New York City, and San Francisco.

Another important factor one must know before moving to Illinois is the quality of education. This state ranks in the top third of the US in K-12 education, with top-notch schools, colleges, and universities, especially in Chicago.

Besides, all the perks, as mentioned earlier, this state also some cons like high property taxes, intense winters, heavy traffic, and weird laws like getting arrested for making faces at a dog.

So, if have made up your mind for moving to this 6th most populous state (12.8 million), and start your new life with a new house, plans, and business or job, then there's a lot to consider, including to what you are going to take home in paycheck as an employee or pay in paycheck as an employer. Wherefore, you must continue reading to know everything about How to calculate Paycheck in Illinois.


Illinois Tax Facts:

  • The Cost of Living in Illinois is affordable, with the cost of living index of 94.5 and an average rent of $974, which is $40 below the average rent in the United States. Moreover, the average apartment rent in Chicago is $1800 monthly.
  • The sales tax rate in Illinois is 6.25%, and when combined with other local taxes, it can range from 6.25% to 11%.
  • Along with Federal Taxes that range from 0% to 37%, the resident of Illinois are also entitled to pay state income tax on a flat rate of 4.95%. The Supplemental Wages and bonuses must also be charged at the same state income tax rates.
  • No city or county in Illinois charges any local income tax.
  • The average household income of Illinois residents is $61,229 (According to United States Census Bureau).
  • The Minimum wage for an employee working in Illinois is $8.25 (As in 2019), and the Cash Minimum Wage for Tipped Employees is $4.95 with the Maximum Tip credit of $3.30.
  • No disability insurance tax is to be deducted from the employee's wage. However, Employers are required to pay State Unemployment Insurance (SUI) tax for each employee.
  • Illinois State has a reciprocal tax agreement concerning income tax with four bordering states: Kentucky, Wisconsin, Iowa, and Michigan. This agreement allows the employees to pay taxes only to their home state while living in one of these states and working in another.

How to calculate Take-Home Pay in Illinois?

To calculate Take Home Pay or Paycheck, you need to go through several steps that include calculation of Gross Pay, Pre-Tax Deductions, Federal Taxes, State Taxes, Post Tax Deductions, Local Tax, etc.

To make it easy for you, we have divided this guide into steps, which would give a general idea. However, there may be some differences or additional taxes that you may be subjected to, according to your situation. As it's a comprehensive guide, we can only discuss general aspects.

Step 1 - Calculating Gross Pay:

  1. To calculate Gross Pay, first, you need to determine the Pay Type of an employee. It is whether an employee is paid on an hourly basis or salary basis.

Hourly Employees:

Hourly Base Employees are paid for each hour they work in a day or a week, at the mutually agreed hourly rate. However, the mutually agreed hourly rate must be as per the Federal and State Minimum Wage law.

Hourly Employees are also entitled to receive overtime, for each excess hours worked after Regular worked hours in a day or week. The overtime rate in most of the states is one and a half times the regular hourly rate.


Salaried Employees:

Salaried employees receive a fixed but mutually agreed on pay, for a decided pay frequency, usually semi-monthly or monthly. However, for gross payment determination for a pay period, the annual salary is divided by the pay frequency.

Most of the salaried employees are exempted from Overtime law. Therefore, they are not entitled to receive overtime, regardless of how many excess hours they work. However, some exceptional salaried employees may be eligible to receive overtime according to federal or state law.


  1. Remember, Supplementary Wages like bonuses, commissions, and paid leaves, as well as double time and fringe benefits, are also taxable wages. Therefore they must also be included in gross pay before federal and state tax calculation.

Step 2 – Subtracting Pre-Tax Deductions (If Any):

A pre-tax deduction is an amount deducted from employee's gross pay before any withholding tax is deducted. These deductions have several advantages, including the reduction of taxable wages. Hence, increasing the take-home pay of an employee. However, not all deductions can be considered as free from all taxes, which means some of the deductions may require specific taxes to be withheld.

Some of the standard Pre-tax deductions are:

  • Health Savings Accounts or FSA or HSA plans
  • Commuter Benefits
  • Healthcare Insurance
  • Short-Term Disability
  • Dental Insurance
  • Medical Expenses and Flexible Spending Accounts
  • Vision Benefits
  • Retirement funds like a traditional 401(k)

Note: Pre-Tax deduction rate changes from year to year, according to inflation and costs of living by the federal government. Therefore, you must keep yourself updated with all rates before making any deductions.


Step 3 – Calculate and Subtract Federal Taxes:

Federal Taxes are taxes deducted from almost every employee, regardless of which state or county they work in.

Federal Taxes are calculated according to the details provided by the employee on Form W-4, which comprises of income, filing status, number of dependents, number of allowances, number of jobs, etc.

The details are form W-4, are assessed and used by the employer to deduce the federal tax bracket, in which the employee's taxable wage lay upon.

Federal Taxes ranges from 0% to 37% have seven tax brackets, depending on filing status, income, and the number of allowances claimed. Below is the income tax details for the year 2019-2020:

Single Filers
Taxable Income Rate
$0 - $9,700 10%
$9,700 - $39,475 12%
$39,475 - $84,200 22%
$84,200 - $160,725 24%
$160,725 - $204,100 32%
$204,100 - $510,300 35%
$510,300+ 37%

Married, Filing Jointly
Taxable Income Rate
$0 - $19,400 10%
$19,400 - $78,950 12%
$78,950 - $168,400 22%
$168,400 - $321,450 24%
$321,450 - $408,200 32%
$408,200 - $612,350 35%
$612,350+ 37%

Married, Filing Separately
Taxable Income Rate
$0 - $9,700 10%
$9,700 - $39,475 12%
$39,475 - $84,200 22%
$84,200 - $160,725 24%
$160,725 - $204,100 32%
$204,100 - $306,175 35%
$306,175+ 37%

Head of Household
Taxable Income Rate
$0 - $13,850 10%
$13,850 - $52,850 12%
$52,850 - $84,200 22%
$84,200 - $160,700 24%
$160,700 - $204,100 32%
$204,100 - $510,300 35%
$510,300+ 37%

Note: Employees must make sure their information in Form W-4 is updated if any significant event takes place in their lives like a child's birth, divorce, or marriage. Moreover, they are also suggested to cautiously decide the number of Allowances that they need to claim, as more number of allowances claim can lead to penalties from the IRS and less than required number will lead to lower take-home pay.


Step 4 – Deduct FICA Taxes:

Along with Federal Withholding, employers are also required to withhold Federal Insurance Contributions Act (FICA) taxes from the employee's paycheck as well as pay a matching amount themselves to the IRS.

There are two types of FICA taxes:

  1. Social Security:

Employers are entitled to withhold 6.2% from the first $132,900 (wage base limit for 2019), taxable wages earned by the employee. Moreover, the employer is also required to pay an equal amount to the IRS for each employee.


  1. Medicare:

Medicare tax is another type of FICA Tax that an employer must withhold from the taxable gross wage of the employee, at the rate of 1.45%. Unlike social security, there is no wage base limit. However, if the employee earns more than the defined threshold than he/she is subjected to an additional 0.9% of the Additional Medicare Tax rate, for every dollar earned above the threshold amount.

Like Social Security, IRS also requires the employer to pay an equal amount of Medicare tax for each employee.



Step 5 – Payment of FUTA Taxes

The Federal Unemployment Tax Act (FUTA) is a tax that the IRS requires the employer to pay without deducting anything from the employee's paycheck.

The FUTA Tax rate for 2019 is 6.0% of the first taxable wage up to $7000 of an employee. However, once the taxable wage limit is crossed for a particular employee, then the employer no longer has to pay this tax.

What to reduce FUTA Tax?

Yes! Then you must pay State Unemployment Insurance (SUI) tax in full and on time and get a FUTA tax credit of up to 5.4%. Which means, you saved a whopping 90% from FUTA Tax.


Step 6 – Subtract Post-Tax Deductions (If any):

Although, employers are not required to withhold any amount as a post-tax deduction, unless if an employee voluntarily asks to do so. However, there are some deductions ordered by the court like child support or wage garnishment, which the employer is entitled to deduct.


Step 7 – Withhold Illinois State Payroll Taxes:

As you are done with your federal payroll taxes, now is time to withhold Illinois state income tax. This tax is to be withheld from the employee's paycheck. The state charges a flat rate of 4.95% for Income tax on its residents, regardless of income level and filing status.

Moreover, the supplemental wage tax rate, according to Illinois State, is also the same 4.95%.

Employers are required to withhold the amount based on the information, including the number of allowances to claim, provided by the employee in Form IL-W-4, in which an employee must update the form if any significant event takes place in their lives like child's birth, divorce or marriage.


Step 8 – Withhold Local Tax:

No City or County of Illinois charges any Local Income Tax on its residents.


Step 9 – Pay State Unemployment Tax (SUI):

As the employees pay state Income Tax, the state also requires the employers to pay State Unemployment (SUI) Tax for each employee's first income of $12960. The tax rate range from 0.525 – 6.925% (includes 0.525% fund building surtax).

However, there is a piece of good news for new employers as they only have to pay on a flat rate of 3.225% (includes 0.525% fund building surtax) on the wages earned by each employee.


Note: Paying SUI taxes in full and on time, can get the employer, a FUTA tax credit of up to 5.4.


Step 10 – Calculate Pay Check:

Once you are done with all elements (steps) discussed earlier, you will have a net pay amount for each employee. Now all you have to do is pay employees on time. Also, to file all Federal Taxes, State Taxes, FICA, and FUTA taxes on time, to avoid any penalties.


Federal and Illinois State Payroll Laws:

  • The state requires the employer to pay their employees on a daily, weekly, bi-weekly, or semi-monthly basis, except for commission as well as professional, executive, and administrative employees are allowed to be paid monthly.
  • The difference of days between paydays and pay period must be as follows:
    • Monthly Pay Period: Payday must be before or on the 21st day after the end of the pay period.
    • Semimonthly or biweekly pay periods: Payday must be no later than 13 days after the end of the pay period.
    • Weekly pay periods: Payday must be no later than 7 days after the end of a pay period.
    • Daily pay periods: Payday must be no later than 24 hours after the end of the pay period.
    • Terminated employees must be paid on the up-coming scheduled payday.
  • For the Overtime, Illinois State follows the same rules as stated by the FLSA law, where the employer is required to pay their employees with one and half times the regular hourly rate for each excess hour worked after 40 hours in a workweek. However, some employees are exempted from this law.
  • The state requires employers to provide at least 24 hours of work break in a workweek.
  • Illinois State requires the employees to receive 20 minutes of an UNPAID lunch break after seven and a half hours of continuous work. However, for workers under the age of 16, are entitled to receive a lunch break on 30 minutes, if they are scheduled to work for more than 5 consecutive hours.
  • Illinois labor laws do not require the employees to receive severance pay from employers.
  • The minimum wage rate for Employees working in Illinois is $8.25, and it is scheduled to increase to $15 in 2025.
  • The Cash Minimum wage for the Tipped Employees is $4.95. However, the employers must ensure that the employee is paid equal to or more than standard minimum wage when tips received are combined with the tipped wages.
  • Illinois State doesn't require the employer to provide vacation benefits, either paid or unpaid. Moreover, they are also not required to provide sick leaves, holiday leaves, jury duty leaves, or bereavement leaves.
  • The state requires employers to withhold Supplemental Wages and bonuses at the same rate of flat 4.95% as standard wages.
  • Just as Federal Income Tax Withholding Allowances, the Illinois Residents can also claim State Income Tax Withholding Allowances, by providing its details on Form IL-W-4.

How to Increase your Take Home Pay in Illinois:

There are numerous legal ways through which you can increase your paycheck amount while working in Illinois. Here are a few of them:

  • Perform well enough and then ask for pay raise from your employee.
  • If your employer doesn't entertain your pay raise request, and you are confident enough about your skills and your market demand, then you can go looking for another job with a better salary and incentives.
  • You can also look for the second job as part-time to increase your income.
  • The standard deduction is not allowed in Illinois. However, the filer can claim personal exemptions from State Income Tax to increase the Take Home Pay.
  • There are several tax credits available to claim from the Illinois State income tax like the property tax credit, the education expense credit, and the earned income credit, so avail them wisely.
  • Work overtime, if you are an eligible employee and employer pays for it.
  • Try to seek and earn another form of supplemental wages like bonuses, commissions, prizes, and stock options.
  • If you foresee hefty medical expenses coming ahead, then you must increase your contribution towards FSA and HSA as these are pre-tax deductions and will help you avoid taxes on your paycheck. However, this will decrease your take-home pay amount as you can only redeem this contribution for medical expenses.
  • If you require cash in hand and don't foresee any medical expenses in the near future, then you can temporarily suspend your pre-tax contributions such as FSA and HSA and increase your take-home pay amount.
  • Try seeking benefits provided by the company or employers to their employees like free gym, parking, etc. that would cut down your expenses and increase your savings.
  • Revise the number of Allowances you can claim on Form W-4 for Federal Income Tax and Form IL-W-4 for State Income Tax. See if you are eligible to claim more allowances as it can have a significant impact on your paycheck.
Also Check: Illinois Sales and Reverse Sales tax Calculator to Calculate the amount of tax included in a gross price as well as the amount you should add to a net price.

FAQs

Answer: Following are the taxes that are taken out from the employee's paycheck working in Illinois:

  • Federal Income Tax: This tax is charged at the progressive rate ranging from 0% to 37%, with seven tax brackets depending on your filing status and income level.
  • FICA Tax: This Tax comprises of two taxes that are charged to an employee. One is the Social Security tax of 6.2%, and the other is Medicare Tax of 1.45%; moreover, if an employee's annual income is more than the defined threshold than he has to pay an additional Medicare tax of 0.9%.
  • State Income Tax: Illinois charges a flat rate of 4.95% for Income tax on its residents, regardless of income level and filing status.

Answer: Yes, it is a High Tax State. According to business and economic forecasting publisher Kiplinger's new report, Illinois is the least "tax-friendly" state when combining the state income tax with all other taxes a resident has to pay.

Answer: $60000 a year after tax in Illinois would be $44,111 as you will be taxed with $15,888.

Answer: The Livable Hourly Salary for a single adult with no child is $31.54, and for a couple (one working) with one child is $24.83.

Answer: The Minimum Wage in Illinois is $8.25, and for tipped employees, it is $4.95, with a maximum tip credit of $3.30.

Answer: The Minimum wage in Chicago is $13 (in 2019).

Answer: Yes, The State Minimum wage for Illinois is scheduled to increase to $15 an hour in 2025.

Answer: A livable wage for a single adult with one child is $22.96, and for a single adult, it is $11.08.

Answer: Following are the Payroll Taxes that an employer and employee need to pay:

  • Federal Income Tax: This tax is withheld from the employee's paycheck and charged at the progressive rate ranging from 0% to 37%, with seven tax brackets depending on your filing status and income level.
  • The Federal Insurance Contributions Act (FICA) Tax: This Tax comprises of two taxes that are charged to both employer and employee. One is Social Security tax of 12.4% (where 6.2% is paid by the employee, and the matched amount is paid by the employer), and the other is Medicare Tax of 2.90% (1.45% 6.2% paid by the employee and the matched amount is paid by the employer). Moreover, if an employee's annual income is more than the defined threshold, then the employee has to pay an additional Medicare tax of 0.9%.
  • The Federal Unemployment Tax Act (FUTA): The employer only pays this Tax. The FUTA Tax rate is 0% of the first taxable wage up to $7000 of an employee.
  • State Income Tax: The employee pays this tax. Illinois charges a flat rate of 4.95% for Income tax on its residents, regardless of income level and filing status.
  • State Unemployment Insurance (SUI) Tax; Paid by employer, ranges from 0.525% to 6.925% on a wage base of $12960. However, the new employer only has to pay at a flat rate of 3.225%.

Answer: Illinois Residents are charged at a flat rate of 4.95% for State Income Tax, regardless of income level and filing status.

Answer: According to Illinois State Revenue, the standard deduction is not allowed in Illinois. However, they can claim a personal exemption of $2,175.

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