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OSHA and the Tax Side of Workplace Safety
Private employers answer to the Occupational Safety and Health Act, a 1970 law that asks them to keep workplaces free of recognized serious hazards. OSHA, part of the Labor Department, enforces it. The tax angle is plain: fixing a hazard is generally business spending, while a government fine generally is not deductible. Our checklist is the Cobblestone Safety Loop, below. The rules sit in 29 CFR Part 1904 and Part 1903.
The short version
- Most private employers with at least one employee are covered; in Illinois they answer to federal OSHA.
- Serious violations cost up to $16,550 each and willful or repeated ones up to $165,514; these 2025 amounts still apply in 2026.
- Reports are due within 8 hours for a work-related death, and within 24 hours for an amputation, the loss of an eye or admission to a hospital as an in-patient.
- A citation can be contested in writing within 15 working days.
Who it covers
| Group | Covered? | Note |
|---|---|---|
| Private employer with an employee | Generally | In Illinois, federal OSHA, not the state plan |
| Self-employed, no employees | No | Not counted in injury records either |
| Illinois state and local government | State plan | Run by the Illinois Department of Labor |
| Company with 10 or fewer employees | Yes | Excused only from routine injury records |
The numbers
| Item | Amount | Year |
|---|---|---|
| Maximum for a serious, other-than-serious or posting violation | $16,550 | 2026, the 2025 amount |
| Willful violation | At least $11,823; at most $165,514 | 2026 |
| Failure to abate, maximum | $16,550 per day | 2026 |
Source: Federal Register and 29 CFR 1903.15
The Labor Department made no 2026 inflation adjustment and said it will review penalties in 2027.
The Cobblestone Safety Loop
- Count employees company-wide to see where the 10-employee line falls.
- Post the free OSHA poster.
- Keep the 8-hour and 24-hour reporting windows where managers can find them.
- Walk each site for hazards and keep invoices for fixes.
- Note the 15 working days that follow any citation.
What it means for year-round planners
- Safety equipment and training belong in the same plan as other purchases; see year-round planning.
- A fine is generally after-tax money.
- Illinois offers free, confidential on-site advice to small and medium-sized businesses at worksafe.illinois.gov.
Mistakes people make
- Reading "10 or fewer employees" as a complete exemption.
- Missing the 8- and 24-hour windows; the toll-free line and online form work when the area office is closed.
- Letting the 15 working days to contest a citation lapse.
A citation with a proposed penalty, an inspection with a warrant, or a death with possible criminal exposure belongs with an attorney.
Common questions
Does OSHA exempt small businesses?
No. A company with 10 or fewer employees is excused only from routine injury recordkeeping.
Can an employer deduct an OSHA penalty?
Generally no. A payment made to a government for violating a law is generally not deductible, with narrow exceptions for restitution and for amounts an order identifies as paid to come into compliance.
Did OSHA penalties rise in 2026?
No. The Labor Department's May 27, 2026 notice made no 2026 adjustment, so the 2025 maximums stay in force.