How the Illinois Paycheck Calculator Works

This calculator breaks down your Illinois paycheck by accounting for federal income tax, Illinois state income tax (4.95% flat rate), and FICA taxes (Social Security and Medicare). Illinois uses a flat tax system, meaning everyone pays the same percentage regardless of income level.

The calculation follows this formula:

Here’s what happens. Your gross pay gets reduced first by pre-tax deductions (401(k), health insurance, HSA). That gives you taxable income. Federal income tax applies using 2025 IRS tax brackets based on your filing status and allowances. Illinois state tax applies at a flat 4.95% rate to your taxable income, adjusted for basic and additional allowances claimed on your IL-W-4 form. Social Security takes 6.2% of gross pay up to $176,100. Medicare takes 1.45% of all wages, plus 0.9% additional on high earners. What’s left is your net pay.

Understanding Illinois State Tax

The 4.95% Flat Tax Rate

Illinois switched to a 4.95% flat income tax rate in 2025. Everyone pays the same percentage whether you make $30,000 or $300,000. This differs from progressive tax states like California where higher earners pay higher percentages. The flat rate makes calculations simple but means lower earners pay a higher effective rate compared to states with progressive brackets.

A $50,000 earner pays $2,475 in Illinois state tax (4.95% of taxable income). A $200,000 earner pays roughly $9,900. Same rate, different amounts. Compare that to California where the $50,000 earner might pay 6% and the $200,000 earner pays 9.3%.

Illinois Allowances Explained

Illinois uses two types of allowances on the IL-W-4 form. Basic allowances reduce your taxable income (typically claim 1 for yourself). Additional allowances can be claimed for a spouse, dependents, or other qualifying situations. Each allowance reduces annual taxable income by $2,425 in 2025. More allowances means less tax withheld per paycheck, but potentially a smaller refund or larger bill at tax time.

Local Taxes Not Included

This calculator doesn’t include local taxes. Chicago has additional local taxes that can add another layer of deductions. Some suburban municipalities also levy local taxes. These vary widely and typically aren’t withheld from paychecks. You pay them directly when filing local returns. Check with your city or county for specific local tax requirements.

Real Illinois Paycheck Examples

Annual Salary	Gross Biweekly	Federal Tax	IL State Tax	FICA	Net Biweekly
$40,000	$1,538.46	$115.00	$70.00	$117.69	$1,235.77
$60,000	$2,307.69	$230.00	$105.00	$176.54	$1,796.15
$80,000	$3,076.92	$380.00	$140.00	$235.38	$2,321.54
$100,000	$3,846.15	$530.00	$175.00	$294.23	$2,846.92
$150,000	$5,769.23	$980.00	$262.50	$441.35	$4,085.38

Note: Examples assume single filing status, 1 federal allowance, 1 IL allowance, no pre-tax deductions. Actual amounts vary.

Illinois vs. Other States Comparison

State	State Tax Rate	$100k Net Pay	vs. Illinois
Illinois	4.95% flat	$72,000	Baseline
Texas	0%	$76,000	+$4,000
Florida	0%	$76,000	+$4,000
California	~9.3%	$69,000	-$3,000
Indiana	3.15% flat	$74,000	+$2,000

Illinois sits in the middle. You pay more than zero-tax states (Texas, Florida) but less than high-tax states (California, New York). The 4.95% flat rate means consistent withholding regardless of income changes.

Edge Cases and Common Questions

What If I Move to Illinois Mid-Year?

You pay Illinois state tax only on income earned while living in Illinois. If you move from Texas to Illinois in July, your first six months of income has no state tax. Your last six months gets taxed at 4.95%. File a part-year resident return showing the split. Update your W-4 and IL-W-4 with your employer once you establish Illinois residency.

What If I Work in Illinois But Live in Another State?

You typically pay taxes where you work. If you live in Indiana but work in Illinois, Illinois withholds 4.95% state tax from your paycheck. Indiana then gives you a credit for taxes paid to Illinois when you file your Indiana return, so you don’t get double-taxed. Each state has reciprocal agreements and credits that prevent double taxation.

What About Chicago and Local Taxes?

Chicago doesn’t have a separate city income tax, but it does have high property taxes and sales taxes. Some suburbs have local taxes that aren’t withheld from paychecks. You pay these directly when filing local tax returns. The total tax burden in Chicago feels higher because of property taxes, not additional paycheck withholding.

What If Illinois Raises the Tax Rate?

Illinois voters rejected a progressive tax amendment in 2020, keeping the flat rate system. If the state raises the flat rate from 4.95% to 5.5%, your net pay drops proportionally. A 0.5% increase costs you roughly $500 annually per $100,000 of income. Watch for proposed rate changes during state budget discussions.

What If My Bonus Is Taxed Differently?

Bonuses get withheld at 22% federal (supplemental wage rate) and 4.95% Illinois. If your regular bracket is lower than 22%, you’ll get the difference back at tax time. If it’s higher, you’ll owe more. Illinois treats bonuses the same as regular wages (flat 4.95%), unlike states with progressive rates that might withhold higher percentages.

What If I’m Self-Employed in Illinois?

Self-employed individuals pay both halves of FICA (15.3% total) plus 4.95% Illinois state tax. You make quarterly estimated tax payments instead of withholding. Illinois requires quarterly payments if you expect to owe more than $500 in state tax. Missing estimated payments triggers penalties and interest.

What If I Retire in Illinois?

Illinois taxes most retirement income. 401(k) withdrawals, IRA distributions, and pensions all get taxed at 4.95%. Social Security benefits are exempt from Illinois state tax. This makes Illinois less attractive for retirees compared to states that don’t tax retirement income at all (Florida, Texas) or exempt most retirement income (Pennsylvania, Mississippi).

Understanding Gross vs. Net Pay in Illinois

The 30% Rule

Expect to lose roughly 30-35% of gross pay to all taxes (federal, state, FICA). A $75,000 salary nets around $52,000-55,000 after taxes. That’s $4,300-4,600 per month take-home. Always budget with net pay, not gross. Car payments, rent, and credit card minimums come from net, not gross income.

Benefits vs. Cash Pay

Pre-tax benefits reduce both federal and Illinois taxable income. If you’re in the 22% federal bracket, every $1,000 contributed to a 401(k) saves you $220 federal + $49.50 Illinois + $76.50 FICA = $346 in taxes. That’s a 34.6% immediate return on investment. Max out pre-tax accounts before taking taxable cash.

Should You Move to Illinois for Work?

When It Makes Sense

Move to Illinois if the job opportunity, salary, or cost of living (outside Chicago) justifies the 4.95% state tax. If you’re moving from California or New York, you’ll save on state taxes. If you’re moving from Texas or Florida, expect to pay an extra $4,000-5,000 annually on a $100,000 salary. Weigh that against career growth and compensation.

When It Doesn’t Make Sense

Don’t move solely for slightly higher gross pay without accounting for Illinois taxes and cost of living. A $105,000 offer in Illinois might net less than a $100,000 offer in Texas after taxes and housing costs. Chicago’s high property taxes and cost of living can offset salary gains.

Frequently Asked Questions

Does Illinois Tax Retirement Income?

Yes, except Social Security. 401(k) withdrawals, IRA distributions, and pension income all get taxed at 4.95%. This makes Illinois less retirement-friendly than states that exempt retirement income. Many retirees leave Illinois for states like Florida or Arizona specifically to avoid tax on retirement distributions.

What’s the Difference Between Basic and Additional Allowances?

Basic allowances (typically 1 for yourself) reduce taxable income. Additional allowances can be claimed for a spouse, dependents, or other qualifying situations. Each allowance reduces annual Illinois taxable income by $2,425. Claim what you’re entitled to on your IL-W-4 to avoid over-withholding.

Will Illinois Switch to a Progressive Tax?

Voters rejected a progressive tax amendment in 2020. Illinois currently requires a constitutional amendment to move away from the flat tax. While politicians occasionally propose progressive taxes, the constitutional requirement makes changes difficult. The flat rate is likely to stay for the foreseeable future.

How Accurate Is This Calculator?

Very accurate for standard W-2 employees using 2025 tax tables. Where it might differ: local taxes (not included), unusual deductions, union dues, or garnishments. For precise numbers, check your actual paystub. Small differences (under $50 per paycheck) are normal due to rounding and employer-specific withholding formulas.

Do I Need to File a Local Return in Illinois?

Depends on your city or county. Chicago doesn’t require a separate city income tax return. Some municipalities do. Check with your local government. Property owners pay property taxes directly to counties, not through paycheck withholding.

Can I Claim More Allowances to Increase Take-Home?

Yes, but be careful. More allowances means less tax withheld now and potentially a tax bill in April. If you claim too many allowances and under-withhold, you’ll owe penalties. Most people claim 1-2 basic allowances and additional allowances only if they have dependents or qualify for other credits.

Maximizing Your Illinois Take-Home Pay

Max Pre-Tax Accounts

Contribute to 401(k) ($23,500 limit in 2025), HSA ($4,300 single, $8,550 family), and FSA ($3,300). These reduce both federal and Illinois taxable income. On a $100,000 salary, maxing a 401(k) saves roughly $8,000 in total taxes (federal + state + FICA).

Adjust Withholding Strategically

If you get huge refunds, you’re over-withholding. Increase allowances to keep more money per paycheck. If you owe at tax time, decrease allowances. Aim for roughly breaking even to maximize cash flow without penalties.

Consider Property Tax Impact

Illinois has some of the highest property taxes in the nation. A $300,000 home in suburban Chicago might cost $6,000-9,000 annually in property taxes. Factor this into total cost of living when comparing Illinois to other states. Rent if property taxes make homeownership unaffordable.