Income Reality in Illinois — Taxes, Housing & Salary
Below-average costs outside Chicago, flat 4.95% tax
Data: 2026-Q2 · BLS · HUD · KFFIncome tax overview
Illinois has a flat income tax rate of 4.95%.
Housing snapshot
1BR rent in Chicago averages $1,700-$2,000 in popular neighborhoods. Outside Chicago, rents drop to $900-$1,200 in cities like Peoria, Rockford, and Springfield.
1BR FMR across major Illinois cities: $1,581 – $1,581/mo (HUD FY2026)
Cost of living summary
At an index of 95, Illinois is about 5% cheaper than the national average of 100.
Illinois offers below-average costs of living outside Chicago. Chicago itself is moderately priced compared to coastal cities. The state has significant fiscal challenges but remains a major economic hub.
Major cities
Purchasing power context
Chicago offers strong purchasing power relative to coastal cities — lower housing costs with comparable urban amenities.
Purchasing Power Reality
What your salary feels like in other cities
Salary reality examples
Comfortable in Chicago's affordable neighborhoods and suburbs. Very comfortable downstate.
Strong purchasing power in Chicago. Excellent flexibility outside major metro.
High flexibility statewide. Chicago provides coastal-city amenities at lower cost.
FAQ — Income Reality in Illinois
What is Illinois's income tax rate?
Illinois has a flat income tax rate of 4.95%, one of the lower flat rates among states with income tax.
Is Chicago affordable?
Chicago has a cost of living index of approximately 105-110, moderately above the national average but significantly below New York, San Francisco, and Los Angeles.
Cities in Illinois
Related tools
Cost of Living Index from C2ER. This is a picture, not a verdict.