Payroll and Benefits Guide United States – Iowa

Last updated: Mar 29, 2023

United States Dollar (USD)
Employer Taxes
16.65% – 22.05%
Payroll Frequency
Employee Costs
Des Moines
Date Format
Fiscal Year
1 January- 31 December



Employer Payroll Contributions

7.4% (Maximum taxable wages is 36,100.00 USD (Includes variable rate workforce development tax)


Unemployment Insurance (State)

1.00% (Includes 0.03% workforce development tax)

Unemployment- New Employer (State)

6.20% (Maximum taxable wages is 160,200.00 USD)

FICA Social Security (Federal)


FICA Medicare (Federal)

0.60% – 6.00% (Maximum taxable wages is 7,000 USD)

FUTA (Federal Unemployment Tax Act)  The FUTA tax rate is 6.0% with a taxable wage base of 7,000 USD. However, if states operate their unemployment insurance programs in compliance with federal law then the FUTA tax is reduced (credit) by 5.4% to0.6%.

16.65% – 22.05%

Total Employment Cost


Employee Payroll Contributions

6.20% (Maximum taxable wages is 160,200.00 USD )

FICA Social Security (Federal)


FICA Medicare (Federal)


Additional tax on earnings over 200,000 USD (High-income earners also pay an additional 0.9 percent in Medicare taxes)

7.65% – 8.55%

Total Employee Cost

Employee Income Tax

State Employee Income Tax

Iowa State Income Tax


Supplemental Wage/Bonus Rate

State Tax – Single


Up to 6,000 USD


6,000 USD to 30,000 USD


30,000 USD to 75,000 USD


75,000 USD and above

State Tax – Married Couples filing jointly


Up to 12,000 USD


12,000 USD to 60,000 USD


60,000 USD to 150,000 USD


150,000 USD and above

Standard Deduction and Personal Exemption


2,210 USD

couple /Married Filing Jointly

5,450 USD

Personal exemption:


40 USD

Couple /Married Filing Jointly

80 USD


40 USD

Federal Employee Income Tax

Federal Tax – Singles


Up to 11,000 USD


11,001 USD to 44,725 USD


44,726 USD to 95,375 USD


95,376 USD to 182,100 USD


182,101 USD to 231.250 USD


231,251 USD to 578,125 USD


578,126 USD or more

Federal Tax – Married, filing jointly


Up to 22,000 USD


22,001 USD to 89,450 USD


89,451 USD to 190,750 USD


190,751 USD to 364,200 USD


364,201 USD to 462,500 USD


462,501 USD to 693,750 USD


693,751 USD or more

Federal Tax – Heads of Households


Up to 15,700 USD


15,701 USD to 59,850 USD


59,851 USD to 95,350 USD


95,351 USD to 182,100 USD


182,101 USD to 231,250 USD


231,251 USD to 578,100 USD


578,101 USD or more

Standard Deduction and Personal Exemption

13,850.00 USD


27,700.00 USD

Married Filing Jointly

20,800.00 USD

Head of Household

Minimum Wage


Iowa does have a state minimum wage law set at 7.25 USD, the same as the minimum wage federal rate.

There are other minimum requirements:

Minimum Cash wage (tipped employee) 2.90 USD

Maximum Cash wage (tipped employee) 4.35 USD


Payroll Cycle

Any payroll cycle is permitted as long as employees get paid at least monthly and no later than 12 days from the end of the period when the wages were earned.

13th Salary

There are no statutory laws on 13th salary.

Working Hours


A normal work week is 8-hour days and a 40-hour week.


For non-exempt employees, overtime is paid at a rate of 150% of the regular pay in excess of 40 hours per week.

Working Week



Paid Time Off

Employers are not legally obliged to provide paid time off.

Public Holidays

There are 10 public holiday days.

Sick Days

Sick leave falls under the Family Medical Leave Act (FMLA).  The FMLA provides certain employees with up to 12 weeks of unpaid, job-protected leave per year or certain family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child). Employers are required to maintain the employees’ health benefits during their leave and keep their job open.

Employees are eligible for leave if they have worked for their employer at least 12 months, at least 1,250 hours over the past 12 months, and work at a location where the company employs 50 or more employees within 75 miles. Whether an employee has worked the minimum 1,250 hours of service is determined according to the Fair Labor Standards Act principles for determining compensatable hours or work.

Maternity Leave

Maternity leave falls under the FMLA.  See Sick Leave.

Paternity Leave

Paternity leave falls under the FMLA.  See Sick Leave.

Parental Leave

Parental leave falls under the FMLA.See Sick Leave.


Termination Process

Iowa is an “at-will employment” state and this means that an employer or employee can terminate an employment agreement without cause. A written termination letter or reason is not required.

Notice Period

While there is no official period required, the general practice is is 2 weeks.

Severance Pay

Iowa law does not either require or prohibit severance payments. It depends on the employer’s agreement with the employee.



Foreign nationals without permanent resident status or a work visa are not permitted to work in the United States. An employer seeking to hire a foreign national may file a petition with the United States Department of Homeland Security/United States Citizenship and Immigration Services (USCIS) for an employment visa on behalf of the prospective employee.

If the petition is approved, the prospective employee must obtain a “visa stamp” from a United States embassy or consulate (Canadian citizens are exempt from this requirement). To get a temporary U.S. work visa, an employer must file a petition with U.S. Citizenship and Immigration Services (USCIS). An approved petition must be part of the visa request. The types of visas include:

  • H-1B – for applicants with a college degree hired to do specialized work. The visa is valid for three years and can be extended for an additional three years. The visa is connected to the employer that filed the petition. If there is a change of employer, the new employer must repeat the process. There are 65,000 H-1B visas available each year.
  • H-1B1 – for applicants with a college degree from Chile and Singapore. The US government grants up to 1,400 visas to Chilean citizens and 5,400 from Singapore each year.
  • H-2A – for temporary or seasonal agriculture work. It is limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
  • H-2B – for temporary non-agricultural work. These visas are limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
  • L – for intercompany transfers (people transferred from a foreign company to a US branch of the company.) The applicant must have been employed at the company for a year before the transfer and work in a managerial level position or higher with specialized knowledge.
  • 0 – for people with extraordinary ability in science, arts, education, business, or athletics.

The standard procedure is to obtain a short-term work visa and then apply for an immigrant visa after the employee has started working in the United States.

For those seeking employment-based immigrant visas:

  • E-1 – highest priority employment for those with extraordinary ability in science, arts, education, business, and athletics.
  • E-2 – for those with advanced degrees or exceptional ability.
  • E-3 – for skilled workers and professionals, as well as unskilled workers.
  • E-4 – members of certain immigrant groups.
  • E-5 – immigrant investors in US companies (substantial investment).

Alternatively, an employer may sponsor a potential employee’s application for permanent resident status, referred to as a “green card,” if the employee can establish that the potential employee is a multinational executive/manager transferee, has unique skills, or has been offered a job in the United States. The employer must have been unable to recruit a U.S. worker who meets the position’s minimum requirements.



Iowa has a minimum combined sales tax rate of 6.82% (state tax is 6.00% and local tax is 0.82%).

Stay up to date on payroll & employment law changes

Version History

May 3, 2022
Payroll contributions and personal income tax rates have been updated.

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Payroll and Benefits Guide
in United States – Iowa

What’s covered in this guide:

  • Employer/employee contributions
  • Minimum wage
  • Working hours
  • Visa requirements

And more...

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Public Holidays Calendar

United States – Iowa 2023
Day Date Holiday Notes
Sunday Jan-1 New Year's Day
Monday Jan-16 Martin Luther King Jr. Day
Monday Feb-20 Presidents Day
Monday May-29 Memorial Day
Monday Jun-19 Juneteenth Independence Day
Tuesday Jul-4 Independence Day July
Monday Sep-4 Labor Day
Monday Oct-9 Columbus Day
Friday Nov-10 Veterans Day
Thursday Nov-23 Thanksgiving Day
Monday Dec-25 Christmas Day