Employer Costs, Take-Home Pay, and Tax Wedge for an    
Average Manufacturing Wage Worker in ILLINOIS    
  Amount Rank
Total Cost to Employer* $30,872 25
Take-Home Pay $22,346 28
Take-Home Pay, % of Employer Costs 72.4% 24
Tax Wedge* $8,526 22
Tax Wedge, % of Employer Costs 27.6% 21
Gross Earnings $27,200  
Taxes Withheld from Worker's Paycheck    
Social Security/Medicare Payroll Tax $2,081  
Federal Income Tax $2,048  
State Income Tax $726 24
Total Taxes Withheld $4,854  
Hidden Taxes Paid by Employer on Worker's Behalf    
Social Security/Medicare Payroll Tax $2,081  
Workers' Compensation Contribution $1,292 25
State Unemployment Insurance Tax $243 17
Federal Unemployment Insurance Tax $56  
Total Employer-Paid Taxes $3,672  
Employer-Paid (hidden) Share of the Tax Wedge 43.1% 24
Source: Dean Stansel, "The Hidden Burden of Taxation: How the Government Reduces    
Take-Home Pay," Cato Institute Policy Analysis No. 302, April 15, 1998.    

*Total cost to employer does not include the cost of fringe benefits
(such as employer contributions to private health insurance plans and
pensions) and tax and regulatory compliance. The tax wedge does not
include the host of other taxes--property taxes, sales taxes, gas taxes,
cigarette taxes, etc.--that workers must pay with their remaining
take-home pay.


Last Updated on 4/9/98
By Mark LaRochelle