How to Calculate the Unemployment Insurance Tax in Illinois

Unemployment benefits in Illinois are paid by the businesses and organizations that operate within the state lines. The Illinois Department of Employment Security distributes payments to claimants who qualify for benefits. To understand the amount to contribute to the unemployment insurance fund, you must follow the calculation instructions provided on your contribution form.

Identify the employees covered under the unemployment compensation law that received payment during the tax quarter in question. Include any employees on vacation or sick leave but exclude any workers on strike.

Total the salaries paid to those employees in the quarter in question, including bonuses, commissions and tips. Subtract the year's taxable wage base amount from the total. For 2011, it’s $12,740.

Multiply the result in step 2 by your tax rate, which the IDES informed you of by mail the previous November. Contact the IDES if you are unsure of your tax rate.

Tips

  • Most traditional W-2 employees are covered by the Illinois unemployment law; notable exclusions are church employees. If you’re unsure about which of your employees are covered, contact the IDES for clarification.

Warnings

  • Your unemployment tax contributions are due a month after the end of each quarter. If you are paying late, you must add 2 percent interest to your payment for each month you’re late.

About the Author

Michaele Curtis began writing professionally in 2001. As a freelance writer for the Centers for Disease Control, Nationwide Insurance and AT&T Interactive, her work has appeared in "Insurance Today," "Mobiles and PDAs" and "Curve Magazine." Curtis holds a Bachelor of Arts in communication from Louisiana State University.