Chicago, Illinois
Chicago employer costs: minimum wage, taxes and paid leave
Chicago sets its own minimum wage and requires paid leave plus paid sick leave, up to 80 hours a year. The minimum wage is $17.05 an hour. A $50,000 employee costs a new employer about $62,802 a year here in 2026.
Calculate the cost of an employee in Chicago
Estimates for planning, not tax or legal advice. Rates change and some depend on your business; confirm yours with your state agencies, insurer or payroll provider.
Chicago employer rules on top of Illinois's
What Chicago adds, then the federal and Illinois lines every employer here pays. The full Illinois breakdown is on the state page.
- Chicago minimum wage
$17.05 in 2026
$17.05 an hour (From July 1, 2026, for employers with 4 or more employees).
per City of Chicago, Office of Labor Standards, as of Jul 1, 2026
- Chicago paid sick leave
80 hours a year
One hour of Paid Leave and one hour of Paid Sick Leave per 35 hours worked, each capped at 40 hours a year.
per City of Chicago (CHI 311, Office of Labor Standards), as of Jul 1, 2024
- Social Security and Medicare
7.65% of pay
The employer matches the employee: 6.2% Social Security on pay up to $184,500 in 2026 ($192,300 in 2027) and 1.45% Medicare on all pay.
per Social Security Administration, as of Jan 1, 2026
- Federal unemployment tax (FUTA)
$42 per employee
6% of the first $7,000 of each employee's pay, less the 5.4% credit for paying Illinois unemployment tax on time.
per Internal Revenue Service, as of Jan 1, 2026
- Illinois unemployment insurance (SUTA)
2.8% of $14,250
New employers pay 2.8% on the first $14,250 of each employee's pay in 2026. After two to three years the rate follows your own claims history.
per U.S. Department of Labor, Employment and Training Administration, as of Jan 1, 2026
Checked against each source on Oct 23, 2026.
Two worked examples in Chicago
Both for a new employer with 10 employees in a general industry in 2026, with single health coverage at the state average.
Salaried employee at $50,000
A $50,000 salary, 40 hours a week.
| Pay for hours worked2,021 hours | $48,582 |
|---|---|
| Paid sick leave required by law59 hours | $1,418 |
| Social Security (employer share)6.2% of $50,000 | $3,100 |
| Medicare (employer share)1.45% of $50,000 | $725 |
| FUTA (federal unemployment tax)0.6% of $7,000 | $42 |
| State unemployment insurance (new employer)2.8% of $14,250 | $399 |
| Workers' compensation (state index rate)$1.34 per $100 of payroll | $670 |
| Health insurance (single coverage, state average)average employer contribution | $7,866 |
| Total cost a year | $62,802 |
25.6% on top of pay · $31.07 per hour worked
Hourly employee at $18 an hour
$18 an hour for 40 hours a week, 52 weeks.
| Pay for hours worked2,021 hours | $36,378 |
|---|---|
| Paid sick leave required by law59 hours | $1,062 |
| Social Security (employer share)6.2% of $37,440 | $2,321 |
| Medicare (employer share)1.45% of $37,440 | $543 |
| FUTA (federal unemployment tax)0.6% of $7,000 | $42 |
| State unemployment insurance (new employer)2.8% of $14,250 | $399 |
| Workers' compensation (state index rate)$1.34 per $100 of payroll | $502 |
| Health insurance (single coverage, state average)average employer contribution | $7,866 |
| Total cost a year | $49,113 |
31.2% on top of pay · $24.30 per hour worked
What changes in 2027
- The Social Security wage base rises from $184,500 to $192,300: up to $484 more employer tax for employees paid above it. per Social Security Administration, as of Jan 1, 2027
Only changes already official on Oct 23, 2026. Most states publish next year's unemployment insurance rates in November and December; this page is updated when they do.
Frequently asked questions
When does the Chicago minimum wage change?
Chicago's $17.05 rate (from july 1, 2026, for employers with 4 or more employees) is the latest published by Oct 23, 2026.
What is the minimum wage in Chicago in 2026?
$17.05 an hour in Chicago (from july 1, 2026, for employers with 4 or more employees), or $2.05 above Illinois's $15.
How much does an employee cost in Chicago?
$62,802 a year for a $50,000 employee in Chicago (new employer, 10 staff), 25.6% above pay.
What payroll taxes do employers pay in Chicago?
Only federal and Illinois payroll taxes: $4,266 a year on a $50,000 Chicago salary.
Is paid sick leave required in Chicago?
Yes. One hour of Paid Leave and one hour of Paid Sick Leave per 35 hours worked, each capped at 40 hours a year.
What does a minimum-wage employee cost in Chicago?
$46,959 a year at $17.05 an hour full time in Chicago: $23.24 per hour worked.
More employer cost pages
Illinois
Other cities with their own rules
Software and services for these costs
- Payroll Software
Calculates and files these payroll taxes for every state you hire in.
- PEO Services
Takes on payroll taxes, workers' comp and benefits, often at group rates.
- Benefits Administration
Runs the health plan and leave programs behind the benefits lines.
Benefits and workers’ comp are most of this cost
A PEO pools employers for health insurance and workers’ comp, often at group rates. Compare PEOs we research, with verified prices and features.