Accounting Articles > Illinois Unemployment:

What is Illinois Unemployment Tax and how does it affect my business?

Every company that has employees on the payroll has to pay into the Illinois Unemployment Fund. In Illinois, it is called The Department of Employment Security.

This fund was created to cover the costs of all persons receiving unemployment compensation. The money does not come from the government, but rather from all Illinois businesses with employees.

Each new business is assigned a temporary initial percentage for their tax rate. This rate is usually somewhere in the 3% to 5% range. Every quarter of each year a report called The Employee Wage and Compensation Report is submitted. This document lists all current employees and the wages they earned for that particular quarter. All wages up to the per employee maximum are taxed at the company's IDES taxation rate.

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