Illinois
Illinois doesn't tax sales of service, so residential and commercial cleaning aren't taxable by inference; cleaning isn't named. Property transferred to the customer as an incident to a service can carry service occupation tax. The ABC test governs unemployment insurance, the state minimum wage is $15.00 an hour, and local minimum wages exist.
In Illinois the service is the simple part. The tax question for a cleaning business is about anything that changes hands along with the service, which is what service occupation tax reaches. Withholding and unemployment insurance sit with two different agencies that share one registration site, and the state minimum wage reached $15.00 on January 1, 2025. Below: sales tax, the employee test, payroll registration, the minimum wage, and what this means for your books.
According to the Illinois Department of Revenue, Illinois doesn't tax sales of service, and residential and commercial cleaning aren't taxable on that general rule. Cleaning isn't named, so that's an inference. The exception goes by service occupation tax. It's a mouthful, and I'm the guy who trips over it every time I say it out loud. It applies to tangible personal property transferred as an incident to a sale of service. More on that, plus a January 1, 2027 change that has nothing to do with cleaning, is on my page on Illinois sales tax and cleaning.
Source: Illinois Department of Revenue, Does Illinois tax sales of service?
Illinois uses the ABC test for unemployment insurance, under 820 ILCS 405/212 and 56 Ill. Adm. Code 2732.200. How a W-2 cleaner and a 1099 subcontractor each appear in the books is covered in 1099 subcontractors vs. W-2 employees. Whether a particular cleaner is an employee under the test is a legal question for your CPA or an employment attorney.
Source: Illinois General Assembly, 820 ILCS 405/212
Source: Illinois Joint Committee on Administrative Rules, 56 Ill. Adm. Code 2732.200
Illinois taxes wages, and the Illinois Department of Revenue handles state income tax withholding. Unemployment insurance belongs to the Illinois Department of Employment Security. Both registrations go through mytax.illinois.gov.
Source: Illinois Department of Employment Security, Are You a New Employer? Register
The Illinois minimum wage is $15.00 an hour, effective January 1, 2025. The Illinois Department of Labor's December 17, 2024 release says that step was the final scheduled increase under the 2019 law; no 2026 department source was checked for later changes. Illinois also has local minimum wages, which this page doesn't list; Chicago has its own page.
Source: U.S. Department of Labor, Wage and Hour Division, State Minimum Wage Laws (updated July 1, 2026)
Source: Illinois Department of Labor, Illinois Minimum Wage Increasing on January 1 (December 17, 2024)
With the service untaxed by inference, an invoice for cleaning alone carries no collected tax. The line to watch is property: anything that passes to the customer as part of a job goes on its own invoice line, so it never hides inside service income. Labor is recorded at the rate you actually pay, local minimums included where they apply to you, and the job profitability estimator shows what that real wage does to a single job.
I'm a bookkeeper, not a CPA or an Enrolled Agent. Whether service occupation tax reaches anything on your invoices, and how it's reported, is a question for your CPA.
Rules checked against the sources above as of October 20, 2026. Rates and rules change; confirm current figures with the agency or your CPA.
About Figure Eight Financial
Figure Eight Financial is Dave Gordon’s bookkeeping practice for residential and commercial cleaning companies. I work with owners in Illinois and across the country, and I’m a Certified QuickBooks Online ProAdvisor.
Before bookkeeping I studied computer science at Penn State and spent a career at IBM as an engineer, so I build the books as a system: data comes in once, lands in the right place, and ties back to a statement. I’m a bookkeeper, not a CPA or Enrolled Agent. I keep the books your CPA works from, and the tax decisions stay with your CPA.
Credentials and memberships reported by Figure Eight Financial.
More about DaveHow I Help
Property that passes to a customer with an Illinois job is the line worth watching, so it gets its own invoice line instead of hiding in service income. Payroll is recorded at the wage you actually pay. Book a short call below and we'll look at your Illinois invoices together.
The core service. Transactions recorded and categorized, every account reconciled so the books and the bank agree, and monthly reports that arrive explained, split by residential and commercial and sliceable per contract.
The full picture of how this works for a cleaning companyFor the months where nothing got entered at all. I fill in the missing periods from the ground up, pulling bank feeds, statements, and receipts until every month has a complete set of records.
How catch-up bookkeeping worksFor books that exist but can’t be trusted. I audit what’s there, fix the unreconciled accounts, duplicate transactions, and wrong categories, and tie every balance back to a statement.
How cleanup bookkeeping worksYour crews paid on time, every pay period, with each payroll run recorded in the books so labor shows up against the jobs it belongs to.
How payroll worksRecurring invoices that match your contracts, an aging report you can trust, and follow-up on slow payers handled by a process instead of your evenings. Built for net-60 commercial accounts.
How invoicing and receivables workA file built right for a cleaning company from day one, or rebuilt after the DIY version drifts, and then I teach you to run it. I’m a Certified QuickBooks Online ProAdvisor, and this is honestly my favorite part of the job.
How a proper setup worksWe start with a short call about your business and where the books stand. The first conversation doesn’t cost anything.
I take a look at what you’ve got, your QuickBooks file, your spreadsheet, whatever exists.
You get a written proposal with the price, so the decision is yours with the number in hand.
Let's Connect
If you clean in Illinois and want your invoices and payroll set up cleanly in the books, send me a note. We'll go through it together, and the first conversation doesn't cost anything.
