What Percent of Taxes Are Taken Out of a Paycheck in Illinois?

Understanding the various deductions from a paycheck is an important step for anyone managing their personal finances. Before an individual receives their net pay, mandatory deductions, primarily taxes, are withheld from their gross earnings. These taxes include components for federal programs and state-specific levies. The actual “percent” of taxes taken out is not a single, fixed number; it varies based on individual factors and the types of taxes applied.

Federal Income Tax Withholding

Federal income tax is a progressive tax levied by the United States government, meaning higher income levels are subject to higher tax rates. Employers must withhold a portion of an employee’s gross pay for this tax, which is an estimate of the employee’s annual tax liability. The Internal Revenue Service (IRS) provides guidance and tables for employers to calculate the amount to withhold from each paycheck.

The amount of federal income tax withheld depends on the information an employee provides on their IRS Form W-4. This form helps employers determine the correct amount of tax to send to the IRS. The W-4 guides the withholding process, and the actual amount withheld reflects an individual’s taxable income and the elections made on this form. The IRS has indicated that there will be no changes to federal income tax withholding tables for tax year 2025.

Social Security and Medicare Taxes (FICA)

Federal Insurance Contributions Act (FICA) taxes are federal payroll taxes that fund Social Security and Medicare benefits. These taxes are split equally between the employee and the employer. The Social Security portion, which supports retirement, disability, and survivor benefits, has an employee tax rate of 6.2% for 2025. This tax applies to earnings up to an annual wage base limit of $176,100 for 2025. Once an individual’s cumulative earnings exceed this limit, no further Social Security tax is withheld.

The Medicare portion of FICA taxes, which funds hospital insurance, has an employee tax rate of 1.45% for 2025. Unlike Social Security, there is no wage base limit for Medicare tax, meaning all covered wages are subject to this tax. For high-income earners, an Additional Medicare Tax of 0.9% applies to wages exceeding specific thresholds. For 2025, this additional tax is levied on wages above $200,000 for single filers, $250,000 for those married filing jointly, and $125,000 for married individuals filing separately. This 0.9% Additional Medicare Tax is solely an employee responsibility, with no corresponding employer match.

Illinois State Income Tax Withholding

Illinois imposes a flat income tax rate on its residents, meaning that all taxable income is subject to the same percentage regardless of the amount earned. For 2025, the flat income tax rate in Illinois is 4.95%. This consistent rate simplifies the calculation of state income tax withholding for employees and employers.

Illinois also provides a personal exemption allowance that reduces the amount of income subject to state tax. For 2025, the personal exemption amount is $2,850 per individual. An additional exemption of $1,000 may be claimed for taxpayers who are 65 or older or legally blind. However, these exemption allowances are not available to high-income taxpayers whose federal adjusted gross income exceeds $500,000 for married couples filing jointly or $250,000 for all other filing statuses.

Key Factors Determining Your Withholding Amount

The specific amount of taxes withheld from a paycheck varies among individuals due to personal circumstances and choices. A major influence is the information provided on the IRS Form W-4. Employees indicate their filing status, such as Single, Married Filing Jointly, or Head of Household, which directly impacts the tax brackets used for withholding.

The number of dependents claimed on the W-4 also reduces the amount of federal income tax withheld. Employees can customize their withholding by requesting an additional amount to be withheld from each paycheck. Conversely, individuals expecting significant deductions or credits on their annual tax return can use the W-4 to adjust their withholding downward.

Beyond W-4 elections, certain pre-tax deductions reduce an employee’s taxable income, lowering the amount of tax withheld. Examples of these deductions include contributions to retirement accounts like 401(k)s or 403(b)s, and premiums for health insurance plans. Contributions to Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) also fall into this category. These are not taxes themselves, but they decrease the gross pay amount on which federal and state income taxes are calculated, directly influencing the final “percent of taxes taken out.”

Understanding Your Pay Stub and Resources for Estimation

Interpreting a pay stub is essential for understanding how your gross pay is reduced to your net pay. A typical pay stub itemizes various deductions, clearly separating federal income tax, Social Security (FICA-SS), Medicare (FICA-MED), and Illinois state income tax. It shows your gross pay (total earnings before deductions) and your net pay (amount received after all withholdings). Terms like “Taxable Gross” may also appear, indicating the portion of your earnings subject to specific taxes after pre-tax deductions.

To estimate paycheck deductions or adjust withholding, several online resources are available. The IRS provides a Tax Withholding Estimator on its website that helps individuals determine the amount of tax to have withheld. To use these calculators, individuals need to input their gross pay, current W-4 elections, and any pre-tax deductions. Official government websites, such as IRS.gov and tax.illinois.gov, offer current tax information, forms, and publications.