What do nanny taxes look like in Illinois? The middle of the road, with one big local exception. Statewide, you register with IDES once you pay $1,000 in cash wages in a quarter, pay employer taxes of roughly 9% on top of gross wages, and deal with a flat 4.95% income tax that you can withhold or skip by agreement. Then comes the Chicago layer: a $17.05 city minimum wage that applies to nannies regardless of household size, a required written contract, and two separate paid-leave banks.
This guide is the Illinois layer: state taxes and IDES registration, the 2026 minimum wages across the state, Chicago, and Cook County, the Domestic Workers' Bill of Rights, and the paid-leave rules — with links to deeper guides on each. For the federal side that applies everywhere — the $3,000 threshold, Schedule H, W-2s — start with our complete nanny tax guide.
Illinois household employers owe federal FICA (7.65%) and FUTA plus state unemployment insurance at 3.35% of the first $14,250 for new employers in 2026, triggered at $1,000 in cash wages in a quarter — and household employers can file it all once a year on Form UI-HA. The Domestic Workers' Bill of Rights guarantees nannies the minimum wage, a 24-hour weekly rest day, and harassment protections; the Paid Leave for All Workers Act adds 40 hours of any-reason paid leave. In Chicago the floor is $17.05 from July 2026, a written contract is required, and paid leave doubles to two 40-hour banks. On a $39,520 salary, the employer side runs about $3,543 a year before the FSA claws back most of it.
What Taxes Do You Owe on a Nanny in Illinois?
Federal employment taxes apply once you pay any household employee $3,000 or more in 2026; Illinois unemployment tax is triggered at $1,000 in a single quarter. The full stack:
| Tax | Rate (2026) | Who pays | Wage base |
|---|---|---|---|
| Social Security & Medicare (FICA) | 7.65% + 7.65% | You and your nanny each | All wages |
| Federal unemployment (FUTA) | 0.6% after state credit | You | First $7,000 |
| IL Unemployment Insurance (UI) | 3.35% for new employers | You | First $14,250 |
| IL income tax | 4.95% flat (withholding optional) | Nanny | All wages |
Worked example: a Chicago nanny at $19/hour, 40 hours a week, earns $39,520 a year. Your employer-side bill is FICA $3,023 + FUTA $42 + Illinois UI $477 = about $3,543, or 9% on top of gross. From her checks you withhold her FICA ($3,023) plus 4.95% state income tax and any federal tax — if she elects withholding. Like the federal side, Illinois makes income-tax withholding optional for household employers: agree on it, have her complete a W-4 and IL-W-4, and remit with your filings. Skip it and she should make estimated payments instead.
How Do You Register with IDES?
Registration runs through MyTax Illinois: one sitting creates your state account and files the REG-UI-1 report that determines your liability under the Unemployment Insurance Act. Do it as soon as you cross $1,000 in quarterly wages — for a full-time nanny, that is the first month.
Then take the option that makes Illinois genuinely easy to administer: household employers can report wages and pay UI contributions annually on Form UI-HA, due April 15 for the prior year, instead of filing every quarter. Two more items while you are set up:
- New-hire report: due within 20 days of your nanny's start date, filed with the Illinois Department of Employment Security's new-hire directory.
- Chicago's written contract: since January 1, 2022, every Chicago domestic worker — nannies included — has the right to a written agreement covering pay and schedule. Put rate, overtime rate, guaranteed hours, and leave in it; it doubles as your compliance record.
Illinois, Chicago, and Cook County Minimum Wages in 2026
Illinois runs three floors, and the one that applies is where the work happens — not where your nanny lives:
| Jurisdiction | 2026 minimum wage | Market nanny rate |
|---|---|---|
| Illinois (state floor) | $15.00 | $16–$22/hour (Chicago metro) |
| Chicago (city) | $17.05 (July 1, 2026) | — |
| Cook County (suburbs) | $15.40 (July 1, 2026) | — |
Note what the table implies: the bottom of Chicago's market range sits below the city's legal floor. The Chicago ordinance applies to domestic workers regardless of how many people you employ, so inside city limits, $17.05 — not $16 — is your real starting point from July 2026. A Lincoln Park family and an Evanston family shopping the same candidate pool are working from different floors.
What Is the Illinois Domestic Workers' Bill of Rights?
Since January 1, 2017, Illinois has written domestic workers into four employment statutes they were once excluded from. If your nanny works 8 or more hours a week, she is covered, and the practical rules are these:
- Minimum wage and wage payment: the full protection of the Illinois Minimum Wage Law and Wage Payment and Collection Act — including final-paycheck rules when the arrangement ends.
- One Day Rest in Seven: at least 24 consecutive hours of rest in every seven-day stretch, plus a 20-minute meal break beginning by the fifth hour of any 7.5-hour shift. A nanny can agree to work the seventh day, but it is voluntary.
- Harassment protections: coverage under the Illinois Human Rights Act, sized down to households of one employee.
- Overtime: 1.5x after 40 hours in a week — Illinois has no daily overtime trigger, unlike California's 9-hour day. Mechanics and multi-state comparisons are in our nanny overtime laws guide.
The line item the Beverly team sees Chicago families miss is not a tax — it is the rest day. A schedule that quietly slides into six-day weeks during a busy season collides with One Day Rest in Seven, and the fix costs nothing: build the seventh-day rule into the contract up front.
See what a coordinated search looks like. The research is the easy part. In two minutes, watch how a Beverly coordinator runs the rest — agencies, screening, and contracts — so you don't have to.
Watch: Meet Beverly · 2 min →Paid Leave in Illinois: State, Chicago, and Cook County Rules
Illinois guarantees paid time off at every address, but the shape depends on where you live. The deeper treatment is in our nanny sick leave guide; the map looks like this:
- Statewide (outside Chicago and Cook County): the Paid Leave for All Workers Act gives nannies working 8+ hours a week 1 hour of paid leave per 40 worked, up to 40 hours a year — usable for any reason, no explanation required.
- Chicago: the city ordinance replaces the state act with two banks: up to 40 hours of paid sick leave and up to 40 hours of any-reason paid leave, each accruing at 1 hour per 35 worked.
- Cook County suburbs: the county's own paid-leave ordinance mirrors the state's 40 any-reason hours.
- Workers' compensation: required once household employees work 40+ hours a week for 13 or more weeks in a year — most full-time nannies qualify. Costs and setup are in our workers' comp guide.
How to Pay Nanny Taxes in Illinois: 5 Steps
The setup is front-loaded; the annual election keeps the maintenance light.
Step 1: Get your federal EIN
Ten minutes on the IRS site. Every filing that follows needs it.
Step 2: Register on MyTax Illinois and report the hire
File the REG-UI-1 once you cross $1,000 in quarterly wages, elect annual UI-HA filing, and send the new-hire report within 20 days. In Chicago, sign the written contract before day one.
Step 3: Set up compliant payroll
Each check needs FICA (and any elected income tax) withheld, overtime past 40 hours calculated, and paid leave accruing at the correct rate for your address — 1-in-40 statewide, 1-in-35 twice over in Chicago. A household payroll service automates it for $49–$75 a month; our setup guide shows the DIY route too.
Step 4: Pay quarterly federally, annually to Illinois
Fold the federal taxes into your quarterly estimated payments and reconcile on Schedule H with your April return; the UI-HA and its payment go to IDES by April 15.
Step 5: Close out January
W-2 to your nanny by January 31, W-2 and W-3 to the Social Security Administration. If you withheld state income tax, reconcile it with the Department of Revenue on the same calendar.
What Legal Payroll Actually Costs in Illinois
Back to the $39,520 Chicago nanny. Employer taxes of about $3,543, plus roughly $600 a year for a payroll service and a few hundred for workers' comp, lands the compliance bill near $4,500 a year. A Dependent Care FSA returns about $2,625 at a 35% marginal rate on the 2026 $7,500 limit. Net cost: roughly $160 a month.
And the taxes flatten quickly: UI stops at the first $14,250 of wages and FUTA at $7,000, so a $2/hour raise costs about $4,160 in wages but only $318 in added employer tax — 7.65% FICA and nothing else.
Nationally, Illinois sits exactly where its politics suggest: lighter than California with its daily overtime and disability stack, lighter than New York with its three insurance mandates, and heavier than Texas, which asks for almost nothing. Weigh $160 a month against the roughly $25,000 average federal penalty exposure for paying under the table — plus Illinois wage-claim penalties that accrue monthly — and the legal route stays the cheap one.
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Even though we work to keep the information, stats, and details in this article accurate and up to date, please do your own financial and legal due diligence before acting on anything you read here, and reach out directly to the private companies and government agencies referenced for the most current details.