How to Start a Cleaning Business in Illinois

Illinois is a workable place to start a cleaning business: a large commercial market anchored by Chicago, a flat state income tax, and — unlike a lot of states — no sales tax on the cleaning service itself. The two things to learn before you take your first job are the workers' comp rule (one employee triggers it, no carve-out) and the way Chicago's local labor and licensing rules layer on top of state law. The license fee doubling on January 1, 2026 is the most recent surprise.

1. Pick a business structure

For a one-to-three-person crew, the practical comparison is between an Illinois LLC and a sole proprietorship. The sole prop is free, but it offers no liability shield — a slip-and-fall at a client's house or an employee-driving-on-the-job incident reaches your personal bank account. An Illinois LLC runs about $150 in year one and $75 every year after, which is modest compared to the exposure it cleans up. The LLC also lets you formally elect out of workers' comp coverage for yourself as a member while still covering any W-2 employees.

To form one, file Articles of Organization (Form LLC-5.5) with the Illinois Secretary of State, Department of Business Services, through the online LLC formation portal. The filing fee is $150, and a $100 surcharge buys 24-hour processing. If formation paperwork isn't where you want to spend your first afternoon, services like Northwest Registered Agent will file the LLC-5.5 and serve as your registered agent for a modest annual fee.

2. Register with the state

Run a name search through the Secretary of State before filing to confirm your name is distinguishable from existing Illinois entities. The Articles ask for your members or managers, your registered office, and your registered agent. Under 805 ILCS 180/1-35, the agent must be either an Illinois-resident individual at least 18 years old or a business entity authorized to transact business in Illinois, and the registered office must be a physical Illinois street address — P.O. boxes do not satisfy.

Illinois LLCs file an annual report with the Secretary of State each year for $75, due by the first day of your LLC's anniversary month. Missing it eventually causes administrative dissolution, so put the date on a calendar the same week you form.

3. Get your EIN and a business bank account

Apply for a free Employer Identification Number at irs.gov. There is no fee, despite what several look-alike sites suggest, and the application takes about ten minutes. With the EIN letter and your stamped Articles in hand, most Illinois banks will open a business checking account the same day. Run every dollar of cleaning income and every supply purchase through that account from day one — paired with QuickBooks, that single discipline makes the annual report and state withholding filings dramatically easier.

4. Business licenses and permits

Illinois has no statewide cleaning-business license. What you do file depends on where you actually work.

• Chicago — Standard cleaning operators fall under the Limited Business License (LBL) catch-all in Municipal Code §4-4-020, issued by the Department of Business Affairs and Consumer Protection through Chicago Business Direct. As of January 1, 2026, the LBL fee doubled to $500 per two years (it had been $250 since 2012). The Regulated Business License runs $1,000 per two years and applies if your scope crosses into adjacent regulated work like post-construction cleanup, mold remediation, or hazardous-material cleanup. Home-based cleaning operations inside Chicago also have to comply with the city's Home Occupation restrictions on signage, customer traffic, and commercial-equipment storage.
• Other Illinois cities — Aurora, Naperville, Springfield, Rockford, and most other Illinois municipalities don't have a cleaning-specific license, but each typically requires a general business registration with the city clerk or finance department.
• Cook County — No county-level general-business license overlays municipal licensing, but the Cook County Minimum Wage Ordinance and Cook County Paid Leave Ordinance apply in any suburban municipality that has not opted out. Roughly 80% of suburban Cook municipalities opted out of the older sick-leave ordinance, and an opt-out from that older ordinance does not carry over to the current Paid Leave Ordinance — verify each work-site municipality individually.

Operators that hold themselves out under a name other than their legal name or their LLC's exact registered name should also file an assumed-name registration through the county clerk's office.

5. Sales tax on cleaning services

This is the friendly section. Illinois does not tax sales of services — the Illinois Department of Revenue's published Q&A 129 states it explicitly. The state's Retailers' Occupation Tax (sales/use tax) applies to retailers of tangible personal property, not service providers. Routine cleaning of homes, offices, retail spaces, warehouses, and other real property is not subject to sales tax in Illinois.

Two narrow caveats. First, the Service Occupation Tax can apply when a service provider transfers tangible personal property to the customer as an incident to the service — for routine sweeping, mopping, and dusting no TPP changes hands and SOT isn't implicated, but specialized work like rug cleaning at a separate facility has a different footprint and is worth a call to IDOR before invoicing. Second, if you also resell cleaning products to clients, those product sales are taxable and require an IDOR retailer registration. The longer playbook lives on the tax services page.

6. Insurance and bonding

Carry general liability before your first paying job. There is no Illinois-mandated minimum, but commercial clients and property-management vendor portals almost universally want to see $1M per occurrence / $2M aggregate on a Certificate of Insurance before letting you on site. Simply Business is one of the easier paths to compare quotes for a small cleaning operator; a local broker can be worth it once you start carrying multiple commercial accounts.

Workers' compensation is the line where Illinois is unforgiving. Under 820 ILCS 305, every employer with one or more employees — including part-time — must carry coverage. There is no small-employer threshold. Sole proprietors, partners, corporate officers, and LLC members may exempt themselves, but they must cover every W-2 employee. Penalties for knowing or willful failure to insure run up to $500 per day, with a minimum $10,000 fine, plus loss of statutory tort protections — the employee can sue you in civil court for unlimited damages.

Illinois does not require a state cleaning bond. Janitorial dishonesty bonds in the $10,000–$25,000 range are a market expectation for higher-end residential and many commercial accounts, but they are a sales credential, not state law.

7. Hiring and payroll

Illinois's 2026 statewide minimum wage stays at $15.00/hour (tipped minimum $9.00), with no scheduled CPI escalator. Chicago's minimum wage is $16.60/hour as of July 1, 2025 for employers with four or more workers, and the applicable rate follows the work location, not the employer's address — a crew based in Naperville cleaning a Loop office tower owes the Chicago rate for those hours.

The state income tax is a flat 4.95% on individuals, which makes withholding straightforward compared to bracketed states. Paid Leave for All Workers Act (PLAWA, 820 ILCS 192), in force since January 1, 2024 and still current in 2026, gives employees 1 hour of paid leave per 40 hours worked, capped at 40 hours per 12-month period, usable for any reason after a 90-day waiting period. You can frontload the 40 hours at the start of the year to avoid tracking accruals. PLAWA does not apply to employees covered by Chicago's or Cook County's local ordinances — local rules control inside those jurisdictions.

Inside Chicago, the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance is the richer regime: two separate buckets of 40 hours per year paid leave and 40 hours per year paid sick leave, both accruing at 1 hour per 35 hours worked. Sick leave is never required to be paid out at termination; the payout rules for the paid-leave bucket depend on employer size.

For worker classification, Illinois uses a common-law right-of-control test for income tax, unemployment, and workers' comp purposes — there is no AB 5-style ABC presumption for general cleaning. The Employee Classification Act (820 ILCS 185) imposes a stricter three-part test, but it applies only to the construction industry; routine residential and commercial cleaning falls outside its scope. The exception is post-construction cleanup performed as part of a construction contract, which does fall inside the ECA and presumes employee status. Gusto handles flat 4.95% withholding, PLAWA accrual tracking, multi-jurisdiction minimum wage between Chicago and the rest of the state, and new-hire reporting out of the box; the hiring guide covers when to convert a 1099 contractor to W-2.

8. Get your first clients

Illinois cleaning markets cluster around Chicagoland and the bigger downstate metros, and they don't all behave the same.

• Chicago and the inner-ring suburbs lean heavily commercial — office towers, medical buildings, retail, restaurants, condo associations — and the volume work goes through property management firms and facilities directors. LinkedIn outreach and direct-to-PM cold contact matter more than reviews here. The commercial cleaning playbook is the right reference.
• Suburban Cook, the collar counties, and downstate metros carry more residential maid-service and move-in/move-out volume, where Google Business Profile, Nextdoor, and realtor referrals dominate early bookings.

Set up the Google Business Profile the same week you incorporate, and ask every happy client for a review within 48 hours of the job. A tool like Broadly automates the ask and routes responses; you can do it manually with a follow-up text until volume justifies software. The longer playbook lives on the lead generation and marketing pages.

9. Pick your software stack

For an Illinois operator whose work skews toward Chicago commercial accounts, the commercial-cleaning-business stack is the right reference point. Two tools earn their keep first: a field-service platform like Jobber for scheduling, dispatch, quotes, and invoicing, and a payroll provider that handles Illinois's flat 4.95% withholding, PLAWA accruals, and the Chicago-versus-state minimum-wage split for crews that cross jurisdictions in a single day. Books, insurance, and reviews fill in around those two.

A note on accuracy

Every fee, threshold, and rule above is current for Illinois as of May 2026. Secretary of State filing fees, Chicago BACP license fees (which just changed on January 1), the Workers' Compensation Commission's penalty schedule, state and city minimum wages, and PLAWA-versus-local-ordinance interactions all change over time — verify with the Illinois Secretary of State, IDOR, the Illinois Workers' Compensation Commission, the Illinois Department of Labor, and the Chicago Department of Business Affairs and Consumer Protection before relying on a specific number for a filing or a tax decision. This guide is editorial, not legal or tax advice.