How do I register as a household employer in Illinois?

First, apply for a federal EIN at IRS.gov — free, takes about 15 minutes. Then register with Illinois's unemployment insurance agency once you cross $1,000 in any calendar quarter — most states require registration within 20 days of becoming a covered employer. If you'll withhold Illinois state income tax at your employee's request, register separately with the state department of revenue for a withholding account.

What payroll taxes does Illinois charge for a household employee?

Federal: 7.65% FICA (employer share, matched by your employee), plus FUTA at 6.0% on the first $7,000 (effective 0.6% after the state SUTA credit). Illinois SUTA: 0.25% - 6.8% on a state-specific wage base — new employers typically land near the middle of that range. State income tax withholding is optional unless your nanny elects it on the state W-4.

What are Illinois's minimum wage and overtime rules for nannies?

Illinois's minimum wage is $15.00/hour, above the federal $7.25 floor. Household employees must be paid at least this rate. FLSA overtime (1.5x for hours over 40 in a week) applies to most household employees. Live-in nannies are FLSA-exempt from overtime but not from minimum wage.

Can I require my nanny to use direct deposit in Illinois?

No. Illinois prohibits employers from mandating direct deposit — your nanny must opt in voluntarily. Illinois also requires the authorization to be in writing. Federal Regulation E (Electronic Fund Transfer Act) sets the floor; Illinois layers an additional employee-consent rule on top.

What records do I need to keep for a Illinois household employee?

IRS Publication 926 requires household employers to keep employment tax records for at least 4 years after the tax becomes due or is paid, whichever is later. Records include timesheets, paystubs, W-2 copies, ACH/payment confirmations, and SUTA filings. Illinois follows the federal 4-year baseline for state purposes. Keep payroll records together with your tax filings in one organized place — most household employer audits start with the IRS or state agency asking for these records.

All State Guides

Illinois Nanny Tax Guide

Illinois has a flat income tax of 4.95% with a personal exemption that reduces taxable income. The state's $15.00 minimum wage is above the federal level.

Illinois household employer quick facts

State Income Tax

State Unemployment

Disability Insurance

Paid Family Leave

Minimum Wage

$15.00/hour

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SUTA Rate Range

0.25% - 6.8%

New employers: 3.35% on the first $14,250 (2026). Illinois Department of Employment Security (IDES)

Key things to know

Flat state income tax of 4.95%
State minimum wage is $15.00/hour
Personal exemption of $2,925
No disability or paid leave requirements

Illinois Employer Requirements

State Income Tax

Illinois uses a flat 4.95% income tax rate. A personal exemption of $2,925 reduces taxable income. The state uses exemptions rather than standard deductions.

State Unemployment Insurance

Employers pay SUI tax on the first $14,250 of wages. New employer rate is 3.35%, with rates ranging from 0.25% to 6.8% based on experience.

Workers' Compensation

Illinois requires workers' compensation once your employee works 40 or more hours a week for 13 or more weeks in a year. Below that threshold it's optional—but still worth considering for the protection it gives you both.

Illinois household employer questions

What will it cost?

Wondering what you'll actually owe as a Illinois employer? Adjust the numbers below to get a quick estimate of your annual tax obligations.

This guide is for informational purposes only and should not be considered legal or tax advice. Tax laws change frequently. Always verify current requirements with your state's tax agency or consult with a qualified tax professional.

Verified accurate as of June 2026Sources: Illinois tax agency, IRS Publication 926

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Illinois Nanny Tax Guide

Illinois household employer quick facts

Illinois Employer Requirements

State Income Tax

State Unemployment Insurance

Workers' Compensation

Illinois household employer questions

What will it cost?

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