Chicago · Payroll Companies
Find Payroll Companies in Chicago
Find Chicago payroll companies and payroll service providers for small businesses, contractors, restaurants, healthcare practices, and growing employers.
Services
What Chicago payroll companies do
A full-service Chicago payroll company handles every federal, Illinois, Cook County, and Chicago filing — not just the paychecks.
Multi-state payroll
Run W-2 payroll across Illinois and every state your remote employees work from, with state and local tax registrations handled.
1099 contractor pay
Pay contractors on-demand, issue 1099-NECs, and stay clear of Illinois worker-classification penalties.
Tax filings & deposits
Federal 941/940, IL-941, IDES SUI, Chicago local filings, and timely deposits — all handled by the provider.
Benefits & HR integration
Health, 401(k), Secure Choice IRA, FSA/HSA, and PTO accruals integrated with payroll runs.
Illinois & Chicago rules
Why Chicago payroll is different
Illinois, Cook County, and the City of Chicago each layer payroll rules on top of federal — and most national payroll providers handle the federal layer well but miss the local one.
- Illinois Paid Leave for All Workers Act — 40 hours/year accrual, applies statewide
- Cook County Paid Leave Ordinance and City of Chicago Paid Sick Leave (separate rules, separate accruals)
- Chicago Fair Workweek Ordinance — predictive scheduling, advance-notice pay for covered industries
- Illinois Secure Choice mandatory retirement program for employers with 5+ employees
- IDES (Illinois Department of Employment Security) unemployment registration and quarterly UI-3/40 filings
- Cook County minimum wage and Chicago city minimum wage tracked separately from the IL state rate
- New-hire reporting to the Illinois Directory of New Hires within 20 days
- Personal Property Replacement Tax exposure if you're a pass-through with Illinois payroll
Industries
Industries served
Industry specialization matters — Fair Workweek, prevailing wage, and tipped-wage rules live in the details.
Restaurants & hospitality
Tipped wage compliance, FICA tip credit (Form 8846), Chicago tipped minimum wage phase-out, and Fair Workweek for covered restaurants.
Healthcare practices
Provider compensation (RVU, productivity bonus, partner draws), credentialing-delay payroll, and benefits-heavy plans.
Construction & contractors
Illinois Prevailing Wage Act, certified payroll (Form WH-347), union fringes, and multi-county wage zones.
Professional services
Salaried W-2 plus owner draws, S-corp reasonable comp, and equity-comp payroll for growth-stage firms.
Retail & ecommerce
Variable-hour W-2, seasonal hiring waves, multi-state nexus from warehouses, and Secure Choice enrollment.
Nonprofits
Form 990 reporting prep, restricted-fund allocation of payroll, and clergy/minister housing allowance where relevant.
Models
Full-service payroll vs DIY vs PEO
Full-service
- Provider runs payroll, files all taxes, sends notices
- Direct deposit, pay stubs, employee self-service portal
- Year-end W-2 / 1099 production and filing
- Errors covered by provider's tax-penalty guarantee
- Best for 1–200 employee businesses
DIY
- You run payroll yourself in QuickBooks Payroll or similar
- You file IL-941, IDES UI-3/40, Form 941 yourself
- Cheapest cash cost — highest time and risk cost
- Penalties for late or wrong filings are yours
- Best for 1–3 employee owner-operator businesses only
PEO
- Provider becomes co-employer of record
- Provides Fortune-500-grade health, 401(k), workers comp
- Highest cost — typically $150–$200/employee/month
- Strong fit for 10–75 employee growth companies
- Trade-off: less control, harder to switch providers
Software
Payroll providers commonly used in Chicago
The platforms Chicago small businesses most often run on. Descriptions are independent — not paid placements.
Gusto
Strong fit for 1–50 employee Chicago small businesses; clean Illinois + Chicago local tax handling.
ADP
Run for SMB and Workforce Now for mid-market; the default for 50+ employee Illinois employers.
Paychex
Deep PEO bench (Paychex PEO) and strong workers comp integration for construction.
Rippling
Best-in-class for IT-heavy and multi-state remote teams; payroll + device management in one.
Justworks
PEO model — strong for 5–75 employee Chicago startups wanting Fortune-500 benefits.
OnPay
Flat-fee model that often beats Gusto on price for 10–30 employee teams.
Pricing
Pricing in the Chicago market
Typical fees for Chicago payroll providers — actual quotes vary by complexity, industry, and benefits scope.
| Company size | Typical range | What's included |
|---|---|---|
| 1–10 employees | $45–$120/mo base + $6–$12/employee | Full-service payroll, federal + IL + Chicago tax filings, direct deposit, W-2/1099 year-end. |
| 11–50 employees | $150–$400/mo base + $6–$15/employee | Adds HR support, benefits administration, multi-state filings, and reporting. |
| 50–200 employees | $500–$2,000/mo bundled | Dedicated implementation, ATS/HRIS integration, custom reporting, mid-market support. |
| PEO (any size) | 2–12% of total payroll, or $150–$200/EE/mo | Co-employer of record, group benefits, workers comp, and HR support. |
Compliance
Compliance checklist for Chicago employers
The minimum your payroll company (or you, if you DIY) needs to keep clean every quarter.
- Form W-4 and IL-W-4 collected for every new hire
- Chicago Paid Sick Leave accrual displayed on each paystub
- Fair Workweek schedule posted 14 days in advance (covered industries)
- New-hire reported to Illinois Directory of New Hires within 20 days
- Secure Choice enrollment or exempt-employer attestation completed
- Federal, IL, and Chicago labor-law posters displayed
- Workers comp policy in place (mandatory for 1+ employees in IL)
- Quarterly IDES UI-3/40 and IL-941 filed on time
Due diligence
Questions to ask a Chicago payroll company
How much do Chicago payroll companies cost?+
Most full-service providers charge a $45–$120/month base plus $6–$15 per employee per month for 1–10 employee businesses. Mid-sized employers (11–50) typically run $150–$400/month base plus per-employee fees. PEO arrangements run 2–12% of total payroll or $150–$200/employee/month all-in including benefits.
Do I have to offer Illinois Secure Choice retirement?+
Yes, if you've had 5 or more Illinois employees for any quarter in the prior year and don't already offer a qualified plan. Employers must register and facilitate payroll deductions — there's no employer contribution required, but missing enrollment carries fines of $250 per employee in year one and $500 thereafter.
How is Chicago payroll different from the rest of Illinois?+
Chicago layers a city minimum wage, the Paid Sick Leave Ordinance, and the Fair Workweek Ordinance on top of Illinois state rules. Cook County has its own paid leave and minimum wage rules that apply in suburbs that haven't opted out. A Chicago-savvy payroll company tracks all three jurisdictions automatically.
Do payroll companies handle 1099 contractors too?+
Yes — most full-service Chicago payroll providers handle contractor pay, year-end 1099-NEC issuance, and W-9 collection. Just be careful: Illinois aggressively pursues worker misclassification, especially in construction and delivery, so confirm the classification before paying anyone as a contractor.
What's the difference between a payroll company and a PEO?+
A payroll company processes your payroll under your EIN — you remain the employer of record. A PEO becomes a co-employer of record under their EIN, which lets you access Fortune-500-grade benefits and workers comp at scale. PEOs cost more but bundle benefits, HR support, and compliance into one fee.
How do I switch payroll companies mid-year?+
Plan the switch around a quarter-end (March 31, June 30, September 30) so YTD wage and tax data transfers cleanly. The new provider files going forward; the old provider closes out the prior quarter. Most Chicago payroll companies will manage the transition and reconcile YTD totals before your first run.
Do payroll companies handle Chicago's Fair Workweek scheduling?+
Some scheduling-aware providers (Homebase, 7shifts, Workforce.com) integrate with payroll to track Fair Workweek compliance — schedule posting, predictability pay for last-minute changes, and right-to-rest violations. Standard payroll-only providers handle the wage calculation but not the scheduling itself.
When should a Chicago business hire a payroll company instead of running it themselves?+
By the second W-2 employee, almost always. The IL-941, IDES UI-3/40, Chicago Paid Sick Leave tracking, Secure Choice, and quarterly federal filings already exceed what most owners can do reliably. Penalties for a single late filing typically cost more than a full year of payroll service.
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