Severance Pay in Illinois: Calculator & 2026 Guide
Calculate your estimated severance package in Illinois. Illinois state tax is 5.0%, for a combined 27.0% withholding rate.
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Estimate your severance package based on your salary, years of service, and industry
Illinois Severance Pay Laws
Illinois WARN applies to employers with 75+ employees (lower than federal 100). All workers have 21 days to review + 7 to revoke.
How Severance Is Taxed in Illinois
| Tax Type | Rate | On $50,000 Severance |
|---|---|---|
| Federal (Supplemental) | 22.0% | $11,000 |
| Illinois State Tax | 5.0% | $2,475 |
| Total Withholding | 27.0% | $13,475 |
| You Keep | 73.0% | $36,525 |
Illinois Severance by Industry
Example: 5 years of service, $75,000 salary, individual contributor in Illinois
| Industry | Weeks/Year | Gross Estimate | After Tax |
|---|---|---|---|
| Technology | 2-4 | $21,635 | $15,804 |
| Finance & Banking | 2-4 | $21,635 | $15,804 |
| Healthcare | 1-3 | $14,423 | $10,536 |
| Retail | 0.5-2 | $7,212 | $5,268 |
| Manufacturing | 1-3 | $14,423 | $10,536 |
| Consulting & Professional Services | 2-4 | $21,635 | $15,804 |
| Government | 1-2 | $7,212 | $5,268 |
| Nonprofit | 1-2 | $10,817 | $7,902 |
| Other Industry | 1-3 | $14,423 | $10,536 |
How to Negotiate Severance in Illinois
Illinois' state WARN Act threshold is lower (75 employees vs 100 federal). More layoffs trigger notice requirements.
- ✓ Ask for more weeks: Counter with 50% more than the initial offer
- ✓ Negotiate COBRA: Employer-paid health coverage for 6-12 months
- ✓ Get a written reference: Protect your future career prospects
- ✓ Review non-compete clauses: Negotiate restrictions before signing
- ✓ Consult a lawyer: Employment attorneys often negotiate 2-5x the original offer
Think Your Severance Is Too Low?
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Illinois Severance Pay FAQ
Is severance pay required in Illinois?▼
No, Illinois does not have a state law requiring employers to provide severance pay. However, the federal WARN Act may require 60 days notice or pay in lieu of notice for large layoffs.
How is severance taxed in Illinois?▼
Severance in Illinois is taxed at 27.0% combined — 22% federal supplemental rate plus 5.0% Illinois state income tax. On a $50,000 severance, you'd take home approximately $36,525.
What is the WARN Act in Illinois?▼
The federal WARN Act applies in Illinois, requiring employers with 75+ employees to give 60 days advance notice for mass layoffs of 50+ workers. Failure to provide proper notice can result in back pay for the notice period.
Can I collect unemployment and severance in Illinois?▼
This depends on how your severance is structured. Some Illinois workers can receive both simultaneously, while others may see a delay in unemployment benefits. If severance is paid as a lump sum, it's less likely to delay unemployment than if paid as continued salary. Contact Illinois's unemployment office for specific guidance.
Severance Pay in Nearby States
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The exact steps employment lawyers use to negotiate higher severance. Used by 10,000+ employees.