Payroll is more than paying people on time. Every pay run creates tax withholding, employer taxes, deposits, quarterly and annual returns, state and sometimes city or county filings, and records that must hold up if an agency asks. Our payroll services cover that whole chain for employers in Naperville, Aurora and Chicagoland and for businesses with employees in other states.
What the service includes
- Registration with the IRS, the Illinois Department of Revenue and the Illinois Department of Employment Security, and with other states and localities as needed.
- Onboarding: Forms W-4 and state withholding certificates, I-9 coordination and new-hire reporting.
- Each pay run: gross-to-net calculation, deductions, direct deposit and pay stubs.
- Tax deposits, quarterly returns, annual returns and year-end forms.
- Contractor payments and Forms 1099-NEC.
- Payroll for S corporation owners and household employers.
- Reconciling payroll to the books, so the liabilities match.
Federal essentials for 2026
| Item | Rule for 2026 |
|---|---|
| Social security | 6.2% from employee and 6.2% from employer, on wages up to $184,500 |
| Medicare | 1.45% each, no wage limit; employees also owe 0.9% Additional Medicare Tax on wages over $200,000, withheld without employer match |
| Supplemental wages | Flat withholding of 22%, or 37% on amounts over $1 million in the year |
| Deposits | Monthly or semiweekly by electronic transfer; next business day once $100,000 accumulates |
| Form 941 | April 30, July 31, November 2, 2026 and February 1, 2027; ten more days if every deposit was on time |
| Forms 940, W-2, W-3, 1099-NEC | February 1, 2027 (January 31 is a Sunday) |
| Form 1099-NEC threshold | $2,000 for payments made in 2026 |
| Household employees | Taxes apply once cash wages reach $3,000 in 2026 |
Employers who file 10 or more Forms W-2 must file them electronically. Late or missed deposits carry penalties; see failure to deposit and, for withheld taxes that are not paid over, the trust fund recovery penalty. Our guide to federal payroll tax deposits explains the schedules.
Illinois
Illinois withholding is reported quarterly on Form IL-941, due April 30, July 31, November 2, 2026 and February 1, 2027. An employer whose look-back period withholding was above $12,000 is assigned a semiweekly schedule. Illinois does not require an annual reconciliation return. Employers must report each new hire, including independent contractors, to the Illinois New Hire Directory within 20 days of the first day of paid work. Unemployment insurance is administered by the Department of Employment Security. See also the Illinois page.
County and city payroll taxes
Federal and state payroll is only part of it. Several states let cities or counties tax wages, and each has its own registration, rate and return. Examples we handle:
| Place | What the employer deals with |
|---|---|
| Pennsylvania | Local earned income tax withheld at the higher of the employee's resident rate or the work-location rate and sent to a tax collection district; the Local Services Tax is separate and may have a different collector |
| Ohio | Municipal income tax withheld for the city involved, remitted monthly or quarterly, with an annual reconciliation by the end of February |
| Kentucky | Cities and counties, including Louisville Metro, levy occupational license taxes on wages |
| Indiana | County income tax, based on the employee's county of residence on January 1 |
| New York City and Yonkers | Withholding for resident employees even when they work elsewhere, and a separate Yonkers earnings tax for nonresidents |
| Maryland | The county of residence on the employee's Form MW507 sets the local rate |
| Oregon | Employer-paid TriMet and Lane transit taxes by work location, plus a statewide transit tax withheld from wages |
| Colorado | Occupational privilege taxes in Denver and several other cities, charged per employee each month |
| Missouri | A 1% earnings tax in St. Louis, with Kansas City also imposing one |
Rates and rules change, and several are local ordinances, so we confirm the current rules for every jurisdiction before the first pay run. More in our guide on local payroll taxes and on multi-state payroll, plus pages for Pennsylvania, Ohio, Maryland and Colorado.
Special situations
S corporation owners. An owner who works in the business is generally an employee and should receive reasonable pay through payroll, with distributions on top. See payroll for S corporation owners.
Household employers. A nanny or home health aide may be your employee, which means Schedule H with your Form 1040 once wages cross the threshold. See household employer tax.
Worker classification. Whether someone is an employee or a contractor depends on the relationship, not on what the paperwork says. See employee vs independent contractor.
How an engagement works
- Consultation about your employees, pay frequency, locations and current system.
- Written engagement agreement defining the services, the filings covered, the pay schedule and how fees are determined, before any work begins.
- Setup and documents: employee data and Forms W-4, home and work locations, prior payroll records, tax account numbers, benefits and deductions, and last quarter's returns if you switch mid-year.
- Payroll processing on each pay date, with deposits and filings made on schedule. You tell us about pay changes, new hires and terminations before each run.
- Review. We reconcile payroll to the quarterly returns and the books, and review year-end totals before issuing forms.
- Follow-up for rate changes, new employees in new places, and notices.
Common problems we fix
- Employees working in a second state or city, with tax going to the wrong place or nowhere.
- Late deposits and missing quarterly returns, often after a software or provider change.
- Owners paid with no payroll at all.
- Contractors who are really employees.
- Payroll liabilities that never clear on the balance sheet.
How we can help
We run payroll or review the one you have, and we correct filings when something has gone wrong. Payroll connects to bookkeeping and to your business tax return. We serve Naperville and Aurora employers in person and clients in every state remotely. To begin, contact us.
Frequently asked questions
How soon must I report a new hire?
In Illinois, within 20 days of the first day the employee is paid. Other states have their own deadlines, and many are similar.
When are 2026 W-2s due?
February 1, 2027, because January 31, 2027 falls on a Sunday. The same date applies to Form 940 and to Form 1099-NEC.
Do I need payroll in the other state if my employee works from home there?
Often yes. Where the work is performed can create withholding and unemployment insurance duties, and some states and cities add local taxes.
Must an S corporation owner be on payroll?
Generally yes, if you work in the business. The salary should be reasonable for the work, and distributions are separate.
Official sources
- IRS: Publication 15, Employer's Tax Guide
- IRS: Employment tax due dates
- Illinois Department of Revenue: Instructions for Form IL-941
- Illinois Department of Employment Security: New hires
- Pennsylvania DCED: Act 32 earned income tax FAQ
This page is a plain-language summary. The official source controls if there is any difference.
General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.