If you live or work in Illinois, understanding your payroll and income taxes is essential for accurate budgeting and compliance. In this guide, we’ll cover Illinois state income tax rates, payroll deductions, and key updates for 2025. Plus, you can use our Illinois Paycheck Calculator to see exactly how much you’ll take home after taxes.

Illinois State Income Tax Rate 2025

Illinois has a flat income tax rate, meaning everyone pays the same percentage regardless of their income level.

1. 2025 Illinois State Income Tax Rate: 4.95% (unchanged from 2024)

2. Applies to wages, salaries, bonuses, and other taxable income

3. No local or city income taxes in Illinois

Example: If your annual gross income is $60,000, you’ll pay $2,970 in state income tax before other deductions.

Payroll Taxes in Illinois – What’s Withheld

When you receive a paycheck in Illinois, several taxes and deductions are typically withheld:

1. Federal Taxes

1. Federal Income Tax – Based on IRS tax brackets & your W-4 form.

2. Social Security Tax – 6.2% (on wages up to $168,600 in 2025).

3. Medicare Tax – 1.45% (no income cap; additional 0.9% for incomes over $200,000).

2. Illinois State Taxes

1. State Income Tax – Flat 4.95% rate.

3. Other Deductions (if applicable)

1. Retirement contributions (401k, IRA)

2. Health insurance premiums

3. Union dues or other voluntary deductions

Illinois Minimum Wage & Overtime Rules 2025

1. Minimum Wage (2025): $15.00/hour (statewide)

2. Tipped Workers: $9.00/hour (employers must ensure tips bring total earnings to at least $15.00/hour)

3. Overtime Pay: 1.5x the regular hourly rate for hours worked beyond 40 per week.

For more details, see the Illinois Department of Labor guidelines.

Employer Payroll Responsibilities in Illinois

If you’re an employer in Illinois, you must:

1. Withhold federal and state income taxes from employee wages.

2. Contribute to unemployment insurance (IDES).

3. Submit payroll tax reports to the IRS and the Illinois Department of Revenue.

4. Provide accurate pay stubs showing gross pay, deductions, and net pay.

   How to Calculate Your Take-Home Pay in Illinois

   To estimate your paycheck:

   1. Start with your gross pay (hourly rate × hours worked OR annual salary ÷ pay periods).

   2. Subtract federal income tax based on your W-4.

   3. Subtract Social Security (6.2%) and Medicare (1.45%).

   4. Subtract Illinois state tax (4.95%).

   5. Subtract any benefits or retirement contributions.

   Or simply use our Illinois Paycheck Calculator — it does the math instantly.

   Final Takeaway

   Whether you’re an employee checking your take-home pay or an employer managing payroll, knowing the 2025 Illinois payroll and income tax rules is crucial. Bookmark this guide for quick reference and use our Illinois Paycheck Calculator to ensure your numbers are always accurate.