Hiring Your First Employee in Illinois (2026)
The Illinois-specific steps for a first W-2 hire, layered on top of the federal checklist. Every figure links to the state agency or official source we checked.
Minimum wage
$15.00/hour statewide (2026). Chicago and some other localities set higher rates.
State unemployment tax (SUTA)
The standard 2026 new-employer rate is 3.35%, and new employers in some sectors, such as construction, pay more. Only the first $14,250 of each worker's 2026 wages is taxable.
Income tax withholding registration
Register with the Illinois Department of Revenue (MyTax Illinois) for income tax withholding, and separately with IDES for unemployment insurance. Employees file Form IL-W-4.
New-hire reporting
Report within 20 days of the hire date to the Illinois New Hire Directory. Illinois also requires reporting certain independent contractors.
Workers' compensation
Required for most employers, even with one part-time employee.
Paid sick leave, family leave & disability
Under the Paid Leave for All Workers Act, employees earn 1 hour of paid leave per 40 hours worked, up to 40 hours per 12-month period, and they can use it for any reason. Employers covered by Chicago's or Cook County's own paid leave ordinances follow those local rules instead. Illinois has no state paid family leave or disability insurance program.
Required posters
The Illinois Department of Labor publishes the required state posters, including the minimum wage, paid leave, and equal pay posters. Federal posters apply too; the DOL FirstStep Poster Advisor shows which ones. Official posters are free.
Worked example: one full-time employee at $18/hour
This uses the same assumptions as our employee cost calculator: $18/hour, 40 hours a week, 52 weeks, 2026 federal rates, and Illinois's new-employer SUTA rate. Workers' comp is a placeholder; your insurer's rate for the job class will differ.
| Wages: $18 × 40 h × 52 weeks | $37,440.00 |
| Social Security (6.2%) | $2,321.28 |
| Medicare (1.45%) | $542.88 |
| FUTA (0.6% of first $7,000) | $42.00 |
| IL unemployment: 3.35% of first $14,250 | $477.38 |
| Workers' comp, illustrative $1.00 per $100 of payroll | $374.40 |
| Total before benefits | $41,197.93 |
That's 1.10× wages, or about $19.81 per hour paid, before benefits, paid leave, and payroll software. $18/hour is above Illinois's 2026 minimum wage.
FAQ
What is the Illinois SUTA rate for new employers in 2026?
The standard 2026 new-employer rate is 3.35%, and new employers in some sectors, such as construction, pay more. Only the first $14,250 of each worker's 2026 wages is taxable.
Is workers' comp required for my first employee in Illinois?
Required for most employers, even with one part-time employee.