How Much Tax Is Taken Out of My Paycheck in Illinois?
Understand federal and Illinois tax deductions from your paycheck. Learn to read your pay stub and manage withholdings for better financial control.
Understanding the various deductions from your paycheck is an important part of managing personal finances and budgeting effectively. A paycheck reflects more than just your gross earnings, as several amounts are withheld before you receive your net pay. These withholdings encompass both federal and state taxes, along with other potential deductions.
Federal Payroll Deductions
Federal income tax withholding is a portion of paycheck deductions, operating under a progressive tax system where higher income levels are subject to higher tax rates. The amount withheld from your earnings is based on information you provide on IRS Form W-4, the Employee’s Withholding Certificate. This form requires you to specify your filing status, such as single, married filing jointly, or head of household, which directly impacts the tax tables employers use for calculation.
Beyond your filing status, Form W-4 allows for adjustments based on several factors. You can account for the number of dependents you claim, which may reduce your withholding through tax credits like the Child Tax Credit. The form also provides sections to indicate additional income from other sources not subject to withholding or to factor in itemized deductions you anticipate taking.
In addition to federal income tax, the Federal Insurance Contributions Act (FICA) taxes are mandatory federal contributions that fund Social Security and Medicare programs. For 2025, employees contribute 6.2% of their wages to Social Security and 1.45% to Medicare. Employers also pay an equivalent amount.
The Social Security portion of FICA tax has an annual wage base limit, meaning that earnings above this threshold are not subject to Social Security tax. For 2025, this limit is $176,100, so wages earned beyond this amount are exempt from the 6.2% Social Security tax. In contrast, there is no wage base limit for the Medicare tax, which applies to all earned income.
Illinois Income Tax Withholding
Illinois implements a flat income tax rate, which differs from the federal government’s progressive tax structure. For 2025, the individual income tax rate in Illinois is 4.95% on all taxable income, regardless of the amount earned. This means that every taxpayer pays the same percentage of their taxable income to the state.
While Illinois does not have a standard deduction, it offers a personal exemption allowance that reduces your taxable income at the state level. For the 2025 tax year, the personal exemption allowance is $2,850 per individual, with additional exemptions available for taxpayers aged 65 or older or who are legally blind.
To determine the correct amount of state income tax to withhold, Illinois residents complete Form IL-W-4, the Employee’s and other Payee’s Illinois Withholding Allowance Certificate. This form is similar in function to the federal W-4, allowing employees to claim allowances based on their personal circumstances, such as claiming themselves, a spouse, or dependents. The information provided on the IL-W-4 guides your employer in calculating the appropriate state tax to withhold from each paycheck.
Decoding Your Pay Stub
Understanding your pay stub helps verify that the correct amounts are being withheld and aids financial planning. A pay stub categorizes earnings and deductions clearly, starting with your gross pay, which is your total earnings before any deductions. Your net pay, also known as take-home pay, is the amount you receive after all withholdings are applied.
Common sections on a pay stub include detailed breakdowns of various deductions. You will find federal income tax, Social Security (often labeled “OASDI” or “SS”), and Medicare (often labeled “MEDI”) listed under a “Taxes” or “Federal Taxes” section. Illinois state income tax will appear separately, often under a “State Taxes” or “IL Tax” heading.
Beyond taxes, pay stubs often show pre-tax deductions, which reduce your taxable income before taxes are calculated. Examples include contributions to a 401(k) retirement plan or health insurance premiums. Post-tax deductions, such as Roth 401(k) contributions or union dues, are subtracted after taxes have been calculated and withheld. Many pay stubs also display year-to-date (YTD) totals for both earnings and deductions.
Managing Your Tax Withholdings
Periodically reviewing your tax withholdings is a financial practice, especially following significant life events. Changes such as marriage, divorce, the birth or adoption of a child, starting a new job, or acquiring a second job can all impact your tax liability and require an adjustment to your withholdings. Changes in deductions or tax credits you expect to claim can also warrant an update.
To adjust your federal tax withholding, you will use the IRS Tax Withholding Estimator, an online tool that helps determine the appropriate amount to have withheld from your pay. After using the estimator, you submit a new Form W-4 to your employer to implement the changes. This form allows you to modify your filing status, claim dependents, or specify an additional amount of tax to be withheld per paycheck.
Similarly, for Illinois state tax, you can adjust your withholding by submitting a new Form IL-W-4 to your employer. This allows you to update your claimed allowances or request additional withholding. Regularly checking your withholdings helps prevent underpayment penalties at tax time or avoids having too much tax withheld.