Illinois payroll from downstate to downtown.
Illinois payroll compliance is no day at the lake. Luckily, Gusto delivers compliant HR, payroll, benefits, and more for Illinois employers—all in one intuitive, integrated platform. Pay your team in a snap while staying on top of statewide and city-specific regulations from Chicago to Champaign.
Compliance without complexity
From Chicago labor law postings to statewide PLAWA, we handle the nitty gritty so you don’t have to.
Automated and off your plate
Every time you run payroll, we handle all your federal, state, and local taxes while automating overtime and minimum wage calculations.
Fully loaded payroll & HR
Our payroll platform comes dragged through the garden with HR, benefits, bill pay, time tools, and more—all for one low monthly price.
Automated Illinois payroll taxes
Easy, accurate payroll in just a few clicks.
Every time you run payroll we calculate, file, and pay all your federal, state, and local taxes including IL-941s, IL-501s, FICA, FUTA, and SUI. We automate minimum wage increases across the county, city, and state while keeping you compliant with meal breaks and overtime. Deductions are automatic, paystubs are securely stored, and you can rest easy knowing payroll is accurate and on time.
Compliant PTO & benefits
Custom benefits that go beyond compliance.
We don’t just offer attractive benefits packages—we keep you compliant while we’re at it. Set up Chicago dual-accrual leave, statewide PLAWA, or create unlimited PTO policies for the whole team. We can connect with My Illinois Savings, or you can set up your own 401(k) along with health, dental and vision, workers’ comp, wellness and commuter benefits, and more.
✔ Qualified 401(k) retirement plans
✔ Mobile employee self-service
✔ Statewide PLAWA accrual
Intuitive & Integrated
Gusto gives you the time to build your business.
We don’t just make payroll a breeze—we give you the time, tools, and peace of mind to get back to doing what you love. With people-first hiring and onboarding, mobile-friendly time and scheduling, and powerful performance management, we help you build a business worth working for. Blue collar or white, Cubs or Sox, we’ve got you covered.
Key Illinois regulations payroll professionals need to know
Illinois minimum wage
Illinois is gradually raising its minimum wage over the next few years. In January 2025, non-tipped workers will need to earn at least $15 an hour. Tipped workers will need to earn at least 60% of that amount.
Here’s how Illinois minimum wage will increase for non-tipped workers:
As of January 1, 2020: $9.25/hour
As of July 1, 2020: $10/hour
As of January 1, 2021: $11/hour
As of January 1, 2022: $12/hour
As of January 1, 2023: $13/hour
As of January 1, 2024: $14/hour
As of January 1, 2025: $15/hour
Tipped workers will see their minimum wage increase as follows:
As of January 1, 2020: $5.55/hour
As of July 1, 2020: $6/hour
As of January 1, 2021: $6.60/hour
As of January 1, 2022: $7.20/hour
As of January 1, 2023: $7.80/hour
As of January 1, 2024: $8.40/hour
As of January 1, 2025: $9/hour
Youth workers under 18 (working less than 650 hours per calendar year) will increase as follows:
As of January 1, 2020: $8/hour
As of July 1, 2020: $8/hour
As of January 1, 2021: $8.50/hour
As of January 1, 2022: $9.25/hour
As of January 1, 2023: $10.50/hour
As of January 1, 2024: $12.00/hour
As of January 1, 2025: $13.00/hour
Both Chicago and Cook County have set higher minimum wages than the state of Illinois. If your local government sets a higher wage, then you need to follow the higher standard.
Illinois pay stubs
Each paycheck should be accompanied with a pay stub that includes:
The number of hours worked during the pay cycle
Rate of pay
Overtime pay
Number of overtime hours
Gross wages
Itemized deductions for the pay cycle
Year to date Itemized deductions
Illinois pay periods
Illinois employers must pay employees at least twice per month using a standard schedule. Here are your options:
Pay employees semi-monthly or bi-weekly, at most 13 days following the end of the pay period.
Pay employees weekly, at most seven days following the end of the pay period.
Determining time worked in Illinois
Illinois employers must track the number of hours each employee works. Once an employee puts in more than 40 hours during a workweek, you must pay overtime.
Illinois overtime pay and tracking
When you ask employees to work overtime, you’ll need to pay them for the effort. Employees are entitled to time and a half once they work more than 40 hours in a week. Include details of their overtime hours and pay rate on their pay stub.
Illinois final wage payment
If an employee parts ways with your company for any reason, you must pay the employee’s final compensation in full—either immediately or on your next scheduled payday. Include wages, earned commissions, and bonuses. You also must pay employees for unused vacations and holidays.
Run payroll and benefits with Gusto
Income tax withholding in Illinois
Illinois employers must withhold 4.95% of an employee’s taxable wages for state income taxes, but there are no municipality taxes.
Illinois benefits
Illinois employees are entitled to federal Social Security and Family and Medical Leave Act (FMLA) benefits. Additional Illinois state requirements include:
Sick leave:. The state law allows employees to use a portion of this time to care for sick relatives instead of themselves. Municipalities might also have their own regulations.
Workers’ compensation: With limited exceptions, all Illinois businesses must get workers’ compensation insurance.
Health insurance: According to the federal Patient Protection and Affordable Care Act (ACA), Illinois businesses with at least 50 full-time (or equivalent) employees must offer health insurance benefits. Illinois employers are allowed to withhold health insurance costs from employee paychecks.
Voting: Employers in Illinois must offer employees two hours time off during open polling hours to vote.
Finding the right payroll provider in Illinois—Why Gusto?
1. Unlimited payroll
Some online payroll platforms cap how many times your business can run payroll. With Gusto, your business can run payroll as often as you need. Our flexible payroll management platform is designed to meet your team’s needs regardless of how many employees you have or the number of states in which you operate. By using Gusto, you can run payroll in just a few clicks for your team, including independent contractors, employees based in different states, and employees paid at differing rates. You can also customize your pay schedules in any way you want. With dozens of payroll features, Gusto easily adapts to the rhythm of your workplace.
2. Tax filings and payments
Whether your business is headquartered in Chicago or you operate satellites in Springfield, Gusto completes your tax filings and payments no matter where in Illinois your business is situated. Our platform works seamlessly with local, state, and federal tax authorities to make sure your company doesn’t miss a beat.
Everything is just easy and intuitive. I rarely have to call anyone for anything — I can just do it all myself in the app.
Brandon Hawkins, Owner of 1114 Group, LLC
You can fulfill most of your tax-filing and payment obligations without leaving the Gusto platform. We’ll even help your new hires right in our system and report their hiring to relevant authorities. Come year-end tax time, you can use Gusto to quickly gather and submit all wages, payments, and tax liabilities that your business has made under the Federal Unemployment Tax Act (FUTA). We continuously update our system so your business remains on top of all new payroll regulations and obligations.
3. Forms and reports
Through Gusto, you can automatically generate digital copies of W-2s, 1099s, year-end tax forms, quarterly tax forms, and customized payroll reports. You can also send employees copies of their forms and get them e-signed, e-faxed, and e-filed directly from the platform.
With Gusto, you also have access to advanced payroll features so you can create and download reports exactly as you need them, at no additional cost.
4. Employee benefits
Easily provide your employees with the benefits they want and need—all from the Gusto platform. Use Gusto to offer and administer all your employee benefits, such as:
Health insurance
401(k) programs
Flexible spending accounts
And more
FAQs
Illinois payroll requires navigating a flat state income tax plus complex Chicago/Cook County local regulations, including separate minimum wages and dual paid leave ordinances. Gusto automates state tax withholding, paid leave tracking, minimum wage and overtime, and compliance across jurisdictions so you can get back to running your business. Check out this guide on our Illinois payroll service to learn more.
Illinois employers must comply with state income tax withholding, SUI reporting, PLAWA statewide paid leave, ODRISA meal break/rest day rules, and, if you’re in Chicago or Cook County, additional minimum wage, paid sick leave, paid leave, scheduling, and labor law posting requirements.
In Illinois, businesses must track employee hours worked, wages, bonuses, commissions, and overtime pay. Employers must also track earned vacations and holidays, as employers may be required to pay the monetary equivalent of these days off if the employee leaves the company.
Illinois doesn’t have their own healthcare requirement, but under the ACA, businesses with more than 50 employees are required to provide healthcare to their employees. Employees in Illinois are free to opt out of coverage without an individual penalty.
In Illinois,payroll providers must track employee hours worked, wages, bonuses, commissions, and overtime pay. Illinois payroll providers must also track earned vacations and holidays, as employers may be required to pay the monetary equivalent of these days off if the employee leaves the company.
Employees in Illinois get paid at least twice a month. Some employers will pay their employees semi-weekly or biweekly, whereas others will issue weekly checks. Employers on a semi-monthly or biweekly pay schedule must pay employees no later than 13 days following the end of a pay period, and employers on a weekly pay schedule must pay employees no later than seven days after the end of a pay period. Certain industries may be exempt from these payment schedules.
If you have 5+ employees and have been in business 2+ years, yes. Employers can choose to enroll in a qualified plan, or you can enroll in the state-facilitated Roth IRA plan, My Illinois Savings, at zero cost. Whether you want to use the state-sponsored plan or offer your employees more comprehensive retirement options with Gusto, we can get you set up.
Chicago has its own minimum wage that increases annually on July 1 according to the Consumer Price Index or 2.5%, whichever is lower. The city also has a unique dual paid leave system, paycheck notice requirements, fair workweek scheduling rules, and specific labor law poster requirements. Gusto will automatically update minimum wage for Chicago-based businesses, and paid leave can be set up to accrue automatically.
Chicago specifically has more stringent labor law poster requirements than the rest of the state. Employers who meet the requirements must post Chicago Fair Workweek posters and Chicago Labor Law posters. Gusto offers a labor law poster compliance service as an add-on to all of our plans.