How Illinois State Taxes Work
Illinois keeps it simple with a single flat rate of 4.95 percent, the same rate it's had since 2017. There are no brackets: whether you earn $30,000 or $300,000, every dollar of Illinois taxable income is taxed at 4.95 percent. What sets Illinois apart from other flat-tax states is what comes off first. Illinois has no standard deduction. Instead it gives a personal exemption allowance of $2,925 for 2026, one for you, one for a spouse if you file jointly, and one for each dependent. People age 65 or older, or who are legally blind, get an extra $1,000 allowance.
That small exemption is why Illinois's flat rate takes a bigger real bite than it looks. Run a $55,000 single income through it and the taxable amount is about $52,075, the tax comes to roughly $2,578, and the effective state rate is 4.69 percent of gross pay, close to the full 4.95. Compare that to Georgia, which charges a slightly higher 4.99 percent flat rate but subtracts a $15,000 standard deduction first: the Georgia worker on the same salary pays about $582 less. The headline rate isn't the whole story; the deduction is.
What Gets Taken Out of Your Illinois Paycheck
Every Illinois paycheck carries federal income tax, Social Security at 6.2 percent and Medicare at 1.45 percent, the same FICA math as everywhere else, with Social Security capped at the $184,500 wage base for 2026. Illinois's flat tax rides on top at an effective 4.5 to 4.9 percent for most incomes. If your employer offers health insurance or a 401(k), those pre-tax deductions come out before taxes are figured, which lowers every line that follows.
Here's the good news for Illinois: no city or county charges an income tax, so there's no local line on your stub anywhere in the state, Chicago included. That's a real contrast with New York City or Philadelphia, where residents pay a second income tax on top of the state. Chicago and Cook County do set higher local minimum wages, but that's a wage floor, not a tax. The employer side and withholding details live in our Illinois paystub generator guide.
Hourly Pay and the 2026 Minimum Wage
An hourly wage just gets annualized first. Illinois's state minimum wage is $15.00 an hour in 2026, having reached that level in 2025, and it's well above the federal $7.25 floor. Chicago and Cook County require even more under their own ordinances, so check your local rate if you work in the metro. At $20 an hour, 40 hours a week is $800, about $41,600 a year, and a single filer at that rate with biweekly checks nets about $1,296 per check. Overtime past 40 hours pays time and a half, and every extra dollar runs through the same tax lines.
Overtime in 2026: your overtime is withheld like normal wages all year. The federal deduction of up to $12,500 of overtime premium ($25,000 joint, through 2028) is claimed on your federal return at filing. Illinois starts its tax from federal income, so watch the current-year Illinois instructions to see how the deduction flows through. Your W-2 carries the amounts, explained in our guide to
overtime on the W-2 and code TT.
