Overview
Illinois keeps things simple with a flat state income tax rate. There are no filing statuses to track—the calculation is based entirely on the employee’s basic and additional allowances from Form IL-W-4.
What Makes Illinois Unique: Illinois has a flat income tax rate of 4.95% but also imposes a State Disability Insurance (SDI) payroll tax, setting it apart from most states with flat-rate systems.
State Income Tax (SIT)
Illinois imposes a flat state income tax rate of 4.95% for 2026. Withholding is straightforward: employees claim basic allowances (worth $2,925 each) and additional allowances (worth $1,000 each) on Form IL-W-4. There is no standard deduction and no filing status selection. The supplemental rate matches the regular rate at 4.95%.
| Tax Structure | Flat rate: 4.95% |
| State Withholding Form | Form IL-W-4 |
| No Filing Statuses | Calculation based on allowances only |
| Basic Allowance Value | $2,925 per allowance |
| Additional Allowance Value | $1,000 per allowance |
| Supplemental Rate | 4.95% |
Supplemental Wages
Illinois supports the following supplemental calculation methods. When using the flat method, the supplemental rate is 4.95%.
Employer State Unemployment Tax (SUTA)
Your assigned SUTA rate will be based on your company’s experience with unemployment claims. New employers typically start at the default rate of 3.175%.
| Tax Type | Employer-paid only |
| Default New Employer Rate | 3.175% |
| Rate Assignment | Experience-rated; assigned annually by the state |
How to Set Up Illinois Payroll Withholding
Follow these steps to begin withholding Illinois payroll taxes for your employees:
- Obtain your Federal EIN at irs.gov
- Register with the Illinois Department of Revenue at mytax.illinois.gov
- Register for SUTA with the Illinois Department of Employment Security at ides.illinois.gov
- Submit a Netchex tax team request to enable Illinois SIT and SUTA
- Have each employee complete their tax forms with an automated onboarding task in Netchex, digitally storing tax forms
- Configure any additional tax settings in the employee profile
Once setup is complete in Netchex, the system will automatically calculate, withhold, and remit all Illinois payroll taxes on your behalf.
Illinois Payroll Tax Filing Deadlines
The following are general filing and deposit deadlines for Illinois payroll taxes. Deadlines may vary based on your employer size and deposit frequency. Always verify current schedules at Illinois Department of Revenue.
| Tax | Deposit Frequency | Typical Due Date |
| SIT Withholding | Semi-weekly or Monthly | Varies; see Illinois IL-700-T |
| Quarterly Return (IL-941) | Quarterly | Last day of month following quarter |
| Annual Reconciliation (IL-W-3) | Annual | January 31 |
| SUTA | Quarterly | April 30, July 31, Oct 31, Jan 31 |
Note: Deadlines are subject to change. Always confirm current requirements directly with Illinois Department of Revenue at https://tax.illinois.gov/.
Resources & Links
The following official resources will help you stay current on Illinois payroll tax requirements:
Frequently Asked Questions: Illinois Payroll Taxes
Does Illinois use the federal W-4 for state withholding?
Yes. Illinois employees use the Illinois-specific Form IL-W-4 for state withholding.
What is Illinois’s flat income tax rate?
Illinois has a flat income tax rate of 4.95%.
What is Illinois’s SUTA wage base?
Illinois’s SUTA wage base is $13,590 per employee per year (2025). Verify at ides.illinois.gov.
Does Illinois have local payroll taxes?
Chicago imposes a Personal Property Lease Transaction Tax and certain city-level taxes, but Illinois does not have broad local income taxes.
What is Illinois’s supplemental withholding rate?
Illinois’s supplemental withholding rate is 4.95% (flat).
Disclaimer: This content is provided for general informational purposes only and does not constitute legal, tax, or accounting advice. Netchex does not provide tax or legal guidance and makes no representations regarding the accuracy or applicability of this information. Laws and regulations may change. The information on this page reflects payroll tax guidelines as of March 2026. For the most current requirements, please refer to the Resources & Links section above.
Let Netchex Handle the Complexity
Staying compliant with payroll taxes doesn’t have to be stressful. Netchex automatically calculates, withholds, and files your payroll taxes so you can focus on what matters most — your people.
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