Last updated: April 24, 2026

How to Start a Hair Salon in Illinois (2026)

Opening a salon in Illinois means working through the Illinois Department of Financial and Professional Regulation (IDFPR) and the Barber, Cosmetology, Esthetics, Hair Braiding, and Nail Technology Act of 1985 (225 ILCS 410). Illinois requires 1,500 hours of training for cosmetologists and barbers, 750 hours for estheticians, and 350 hours for nail technicians, followed by a written licensing examination. There is no state practical exam. IDFPR launched its new CORE online licensing portal on October 30, 2024, replacing the legacy system.

Two things first-time Illinois salon operators routinely miss: (1) your personal cosmetology license does not authorize you to operate a salon – you must file a separate Salon/Shop Registration with IDFPR ($40 application fee) before opening; and (2) the Illinois Department of Labor audits booth-rental arrangements aggressively – the “rent a booth” model is common in Illinois but misclassifying employees as booth renters triggers retrospective workers’ comp, unemployment insurance, Paid Leave for All Workers Act, and Illinois Domestic Worker Bill of Rights liability (for home-based salon models).

This guide walks through the full Illinois salon startup path – individual licensing, entity formation, salon registration, municipal permits, tax handling, sanitation compliance, booth-rental vs. employee classification, and continuing education.

Illinois Salon Requirements at a Glance

Requirement	Agency	Cost	Timeline
Individual Cosmetology License (1,500 hrs training)	IDFPR via CORE	Training $10,000-$20,000; application fees $50-$100	12-18 months of schooling + exam
Esthetician License (750 hrs)	IDFPR via CORE	Training $5,000-$15,000	6-12 months
Nail Technician License (350 hrs)	IDFPR via CORE	Training $2,500-$6,000	3-6 months
Barber License (1,500 hrs)	IDFPR via CORE	Training $10,000-$20,000	12-18 months
Illinois LLC (Articles of Organization)	Illinois Secretary of State	$150 filing; $75 annual report	5-10 business days online
Federal EIN	IRS	Free	Immediate online
Salon/Shop Registration (per location)	IDFPR via CORE	$40 application	Before operating
Retailers’ Occupation Tax (if selling retail products)	MyTax Illinois	Free to register	Before first retail sale
Chicago Limited Business License	Chicago BACP	$500 per 2-year term (2026 rates)	Before operating in Chicago
Suburban/downstate municipal license	City/village clerk	Varies by municipality	Before operating in each city
General Liability Insurance	Private insurer	$400-$1,500/year starter	Before opening
Workers’ Compensation (if employees)	Private insurer	Varies by payroll	Before first employee
Continuing Education at Renewal	IDFPR-approved CE sponsors	$50-$250 per cycle	Every 2 years

How to Start a Hair Salon in Illinois (Step by Step)

Step 1: Complete Your Individual Licensing (1,500 Hours for Cosmetology)

Illinois requires individual licensure for anyone providing cosmetology, esthetics, nail, hair braiding, or barbering services. Hour requirements under 225 ILCS 410 and 68 Ill. Adm. Code 1175:

• Cosmetologist: 1,500 hours of training at an IDFPR-approved cosmetology school
• Barber: 1,500 hours at an approved barber school
• Esthetician: 750 hours
• Nail technician: 350 hours
• Hair braider: 300 hours (separate license category)
• Cosmetology teacher: Additional teaching program on top of cosmetology license

Prerequisites: At least 16 years old and completed the 10th grade OR hold a high school diploma / GED.

Examination: Pass the Illinois-approved written examination for your license type. Illinois does not administer a state practical exam – schools verify practical proficiency.

Application: Submit through the CORE online portal (online-dfpr.micropact.com), which launched October 30, 2024 and replaced IDFPR’s legacy licensing system. All new applications, renewals, and school paperwork now flow through CORE.

Step 2: Form Your Illinois LLC

File Articles of Organization (Form LLC-5.5) with the Illinois Secretary of State for $150. Annual report $75/year. An LLC shields personal assets from salon liability – chemical burns, allergic reactions, theft from client storage, and property damage claims are real exposures in salon operations. Illinois’s 1.5% Personal Property Replacement Tax applies to LLC net income in addition to flow-through 4.95% personal income tax.

After formation, apply for your free federal EIN at IRS.gov.

Step 3: File Salon/Shop Registration with IDFPR

Your personal cosmetology license authorizes you to perform services. It does NOT authorize you to operate a salon. Illinois requires a separate Salon/Shop Registration (Certificate of Registration) for every physical salon location under the Barber, Cosmetology, Esthetics, Hair Braiding, and Nail Technology Act.

• Application fee: $40
• Required information: Name(s) and license number(s) of the Sole Proprietor, Chief Executive Officer, Manager, or Managing Partner who holds a current license under the Act
• Location-specific: One Certificate per physical location. Multi-location salons need multiple registrations.
• Rename / relocate: Amended registration if your salon name or address changes
• Classification: Cosmetology salon, esthetics salon, hair braiding salon, nail technology salon, or barber shop – specify scope based on your services

File through CORE. You cannot legally open for business without an issued Certificate of Registration.

Step 4: Register for Illinois Tax Accounts

Illinois does not tax services broadly, so salon services are not subject to Illinois sales tax at the state level. That’s an advantage over states like Texas or Connecticut that tax personal services. However:

• Retail product sales: Shampoo, styling products, tools, and other merchandise you sell to clients are taxable at the general Illinois Retailers’ Occupation Tax rate (6.25% state + local). Register for a sales tax account on MyTax Illinois if you’ll sell retail.
• Chicago combined rate: 10.25% on retail product sales in Chicago city limits
• Gratuities: Not subject to sales tax; not wages for FICA purposes if properly reported
• Withholding: Register for Illinois income tax withholding on MyTax Illinois before first payroll

Step 5: Get Local Business Licensing

• Chicago: Limited Business License through Chicago BACP: $500 per 2-year term under 2026 rates. Apply through Chicago Business Direct.
• Cook County suburbs: Evanston, Oak Park, Skokie, Schaumburg each have their own business license or home occupation rules
• DuPage / Lake / Will / Kane: Naperville, Aurora, Wheaton, Waukegan, Joliet each have their own city requirements
• Downstate: Verify with city/village clerk – some cities require nothing, others require specific business tax registration

Salon-specific zoning matters: cosmetology services in residential zones are restricted in most Illinois municipalities. Home-based salons typically require a specific conditional use permit or are disallowed in purely residential zones. Verify zoning before signing a lease.

Step 6: Comply With Sanitation, Infection Control, and OSHA Rules

IDFPR Administrative Rules (68 Ill. Adm. Code 1175) govern salon sanitation and infection control. Core requirements:

• Disinfection between clients: Combs, clippers, nail implements, and any item contacting skin must be cleaned and disinfected with an EPA-registered hospital-grade disinfectant between clients
• Single-use items: Orangewood sticks, emery boards, neck strips, and similar items discarded after each client
• Sharps: Razor blades used in barbering must be single-use or properly disinfected; sharps containers required
• Blood exposure: Bloodborne pathogens protocol required if services may draw blood (e.g., some barbering, nail services)
• Water and plumbing: Shampoo bowls with hot and cold running water, functional drains
• Records: Sanitation logs, disinfectant labels, and training records

Salons with employees are also subject to federal OSHA:

• Hazard Communication Standard (chemical inventory, SDS sheets, labeling) – salon chemicals trigger this
• Bloodborne Pathogens Standard if exposure is reasonably anticipated
• General Duty Clause for ergonomic risks (standing, repetitive motion, chemical exposure)
• Illinois does not have a state OSHA plan for private employers – federal OSHA applies directly

Federal OSHA penalties for 2026: approximately $16,131 per serious violation and $161,323 for willful/repeat violations (annually adjusted).

Step 7: Handle Booth Rental vs. Employee Classification Carefully

Illinois has many booth-rental salons where individual stylists rent a chair and operate as independent contractors. This can work legally, but only if the relationship meets the IRS common-law test and Illinois-specific independent contractor standards. Red flags that convert a “booth renter” into an employee by law:

• Salon sets the stylist’s hours or schedule
• Salon dictates the products used or pricing
• Stylist does not have own business cards, client records, or advertising
• Salon provides all supplies rather than stylist bringing own
• Stylist cannot work at other locations simultaneously

If an audit reclassifies your booth renters as employees, you face retroactive liability for:

• Unemployment insurance contributions
• Workers’ compensation premiums
• PLAWA or Chicago Paid Leave violations
• Income tax withholding backpay
• Penalties and interest

Get written booth rental agreements reviewed by an Illinois attorney familiar with salon industry practice. Many Illinois salons have shifted to commission-employee models specifically because the misclassification risk under strict Illinois interpretation outweighs the payroll savings.

Step 8: Plan Continuing Education at Renewal

IDFPR licenses under 225 ILCS 410 renew on a 2-year cycle. Continuing education requirements:

• Cosmetologist: 14 CE hours per renewal cycle
• Esthetician: 10 CE hours
• Nail technician: 10 CE hours
• Barber: 14 CE hours (verify current rules in CORE)
• Domestic violence / sexual assault awareness: 1 hour of CE must cover this topic (Illinois-specific requirement across professions)
• Renewal window: Opens 2-3 months before license expiration
• CE must be completed through IDFPR-approved CE sponsors

Step 9: Get Workers’ Comp and Plan Payroll Compliance

• Workers’ comp: Required from one employee. Salon class codes under NCCI typically 9586 (Beauty Shop Operation) with rates around 0.4%-1.2% of payroll – lower than most trades but still required.
• IDES UI: Salon services classify under NAICS 812112 (Beauty Salons), not sector 56. Standard 3.35% new employer rate for 2026; wage base $14,250.
• Paid leave: Chicago Paid Leave Ordinance (80 hours), Cook County Paid Leave, or PLAWA (40 hours) depending on location
• Illinois Secure Choice: Mandatory at 5+ employees with 2+ years in business
• Minimum wage: Illinois $15.00/hr; Chicago $16.20/hr effective July 1, 2026; Chicago tipped minimum is 84% of full ($13.61) with full phase-out by July 1, 2028

Illinois Salon Market Context

• Chicago North Side and North Shore suburbs (Lincoln Park, Wicker Park, Evanston, Wilmette, Winnetka): Premium pricing zones with high disposable income and service-frequency. Rent and competition are both high.
• Chicago Latino and Hispanic neighborhoods: Strong market for bilingual salon services; specific product demand
• Collar counties (Naperville, Schaumburg, Oak Brook, St. Charles): Suburban families, premium barbershops, and nail/spa services
• Downstate markets: University towns (Champaign-Urbana, Bloomington-Normal, DeKalb, Carbondale) see cyclical demand. Rockford, Peoria, and Springfield have stable established markets with less competition.
• Rent economics: Chicago North Side salon rents run $35-$65/sq ft; collar county suburbs $18-$35/sq ft; downstate $10-$20/sq ft. Plan accordingly.
• Workforce: Illinois cosmetology programs produce steady graduates but retention in the first 3 years is a common salon challenge – plan compensation and culture as a retention strategy

Cost to Start a Hair Salon in Illinois

Line Item	Small Salon (1-2 chairs)	Full Salon (4-6 chairs)
Illinois LLC + annual report	$150 + $75	$150 + $75
IDFPR Salon/Shop Registration	$40	$40
Chicago Limited Business License (if in Chicago)	$500/2 years	$500/2 years
Location buildout (plumbing, shampoo bowls, electrical)	$8,000-$20,000	$30,000-$80,000
Salon equipment (chairs, mirrors, stations)	$5,000-$12,000	$15,000-$40,000
Initial 3 months rent + deposit	$8,000-$25,000	$20,000-$75,000
Initial product inventory (back-bar + retail)	$2,000-$5,000	$8,000-$20,000
Software (booking, POS, inventory)	$500-$1,500/year	$1,500-$5,000/year
General liability insurance	$400-$900/year	$1,000-$2,500/year
Professional liability insurance	$150-$400/year	$400-$1,200/year
Workers’ comp (if commission employees)	$400-$1,500/year	$2,000-$6,000/year
Marketing launch (signage, website, Google, Instagram)	$2,000-$5,000	$8,000-$20,000
Continuing education (ongoing)	$50-$250 per cycle	$300-$1,000 per cycle
Approximate Total (Year 1)	$25,000-$70,000	$90,000-$250,000

Related Illinois Business Guides

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Frequently Asked Questions

How many hours of training do I need to become a cosmetologist in Illinois?

Illinois requires 1,500 hours of training at an IDFPR-approved cosmetology school under the Barber, Cosmetology, Esthetics, Hair Braiding, and Nail Technology Act of 1985 (225 ILCS 410). Other license hour requirements: barber 1,500 hours, esthetician 750 hours, nail technician 350 hours, hair braider 300 hours. You must also be at least 16 years old, have completed the 10th grade (or have a high school diploma/GED), and pass the Illinois-approved written examination. There is no state practical exam.

Do I need a separate license to operate a salon in Illinois?

Yes. Your personal cosmetology license authorizes you to perform services. It does NOT authorize you to operate a salon. You must file a separate Salon/Shop Registration with IDFPR ($40 application fee) under 225 ILCS 410 for every physical salon location before opening. Salon/Shop Registration must be held by a Sole Proprietor, CEO, Manager, or Managing Partner who is licensed under the Act.

Are salon services taxable in Illinois?

No – salon services are not subject to Illinois sales tax at the state level because Illinois generally does not tax services. But retail products you sell (shampoo, styling tools, merchandise) are taxable at the general Retailers’ Occupation Tax rate (6.25% state + local, 10.25% combined in Chicago). Register for a sales tax account on MyTax Illinois if you’ll sell retail products.

What is CORE and do I apply for my Illinois cosmetology license through it?

CORE (Comprehensive Online Regulatory Environment) is IDFPR’s new online licensing portal, launched October 30, 2024. All new cosmetology, barber, esthetics, nail technology, and hair braiding applications, renewals, and school paperwork flow through CORE at online-dfpr.micropact.com. The legacy system has been retired. Salon/Shop Registration filings also go through CORE.

What are the continuing education requirements for Illinois cosmetology licenses?

Licenses under 225 ILCS 410 renew on a 2-year cycle. CE requirements: 14 hours for cosmetologists and barbers, 10 hours for estheticians and nail technicians. At least 1 hour of CE must cover domestic violence or sexual assault awareness (Illinois-specific requirement). CE must be completed through IDFPR-approved CE sponsors. The renewal window opens 2-3 months before license expiration.

Is booth rental legal in Illinois salons?

Yes, but only if the arrangement meets the IRS common-law test AND Illinois-specific independent contractor standards. Red flags that convert booth renters to employees by law include: the salon setting schedules, dictating products or pricing, providing supplies rather than the renter bringing their own, or restricting the renter from working at other locations. Misclassification creates retroactive liability for unemployment insurance, workers’ comp, PLAWA or Chicago Paid Leave violations, and income tax withholding. Many Illinois salons have shifted to commission-employee models specifically because the Illinois Department of Labor audits booth-rental classifications aggressively.

Do I need workers’ compensation for a hair salon in Illinois?

Yes – from one employee, no threshold. Salon class codes under NCCI are typically 9586 (Beauty Shop Operation) with rates around 0.4%-1.2% of payroll. Uninsured penalties: $500/day fines, $10,000 minimum, Class A misdemeanor for negligent failure, Class 4 felony for knowing failure, personal liability for corporate officers. Sole-proprietor salons with no employees may operate without workers’ comp coverage for the owner.