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Payroll and Benefits Guide United States – Iowa

Last updated: Mar 03, 2026

Currency
United States Dollar (USD)
Employer Taxes
14.65% – 22.65%
Payroll Frequency
Monthly/Bi-Weekly/Semi-Monthly
Employee Costs
8.55%
Capital
Des Moines
Date Format
mm/dd/yyyy
Fiscal Year
1 January - 31 December
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Contribution

Employer Payroll Contributions
0.00% – 7.50% State Unemployment Insurance (SUI), applied on the first 30,600 USD of each employee’s wages.Rates are determined based on the employer’s experience rating and the applicable tax schedule.
1.0% – 1.5% State Unemployment Insurance – New Employer, applied on the first 30,600 USD of each employee’s wages.
6.20% Federal Insurance Contributions Act (FICA) - Social Security, applied on salary up to 176,100 USD per year.
1.45% Federal Insurance Contributions Act (FICA)  – Medicare.

An additional 0.9% should be withheld from employees earning above 200,000 USD per year.

0.60% – 6.00% Federal Unemployment Tax Act (FUTA), applied on salary up to 7,000 USD per year.Employers who pay their state unemployment tax in full and on time are eligible for a 5.4% tax credit, reducing the FUTA rate to 0.6%.
14.65% – 22.65% Total Employment Cost

 

Employee Payroll Contributions
6.20% Federal Insurance Contributions Act (FICA) - Social Security, applied on salary up to 176,100 USD per year.
1.45% Federal Insurance Contributions Act (FICA)  – Medicare.An additional 0.9% should be withheld from employees earning above 200,000 USD per year.
7.65% – 8.55% Total Employee Cost
State Employee Income Tax Annual
3.8% Flat Tax Rate
5.70% 62,100 USD and above
Federal Employee Income Tax Annual
Federal Tax – Singles
10.00% Up to 11,925 USD
12.00% 11,925 – 48,475 USD
22.00% 448,475 – 103,350 USD
24.00% 103,350 – 197,300 USD
32.00% 197,300 – 250,525 USD
35.00% 250,525 – 626,350 USD
37.00% Above 626,350 USD
Federal Tax – Married – Joint Filing
0.00% Up to 23,850 USD
12.00% 23,850 – 96,950 USD
22.00% 96,950 – 206,700 USD
24.00% 206,700 – 394,600 USD
32.00% 394,600 – 501,050 USD
35.00% 501,050 – 751,600 USD
37.00% Above 751,600 USD
Federal Tax – Heads of Household
10.00% Up to 17,000 USD
12.00% 17,000 – 64,850 USD
22.00% 64,850 – 103,350 USD
24.00% 103,350 – 197,300 USD
32.00% 197,300 – 250,500 USD
35.00% 250,500 – 626,350 USD
37.00% Above 626,350 USD
Standard Deduction and Personal Exemption
15,000 USD Single
30,000 USD Married Filing Jointly
22,500 USD Head of Household

Minimum Wage

General

Iowa’s State minimum wage is set at 7.25 USD, aligning with the Federal minimum wage.

Payroll

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

General

A normal work week consists of 8 hour days and a 40 hour week.

Overtime

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

Leave

Paid Time Off

Employers are not legally obliged to provide paid time off.

Public Holidays

Public holidays are not mandatory paid days off, but employers commonly allow workers to take federal holidays as paid days off.

Some companies might also agree to allow workers to take off state holidays; workers can find specific state holiday dates from their local government.

Usually when an agreed public holiday falls on a weekend, a day off in lieu is given on the Friday before or the Monday after the holiday.

Date Day Holiday Notes
1 January 2026 Thursday New Year’s Day Standard holiday
19 January 2026 Monday Martin Luther King, Jr. Day Standard holiday
16 February 2026 Monday Washington’s Birthday Standard holiday
25 May 2026 Monday Memorial Day Standard holiday
3 July 2026 Friday Independence Day (Observed)
7 September 2026 Monday Labor Day Standard holiday
11 November 2026 Wednesday Veterans Day Standard holiday
26 November 2026 Thursday Thanksgiving Day Standard holiday
27 November 2026 Friday Friday after Thanksgiving
25 December 2026 Friday Christmas Day Standard holiday

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 compensable 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

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.

Salary payment interval / date Final payment on termination Bank account/payment-method requirement
Wages must be paid at least monthly, semi-monthly or bi-weekly on regular paydays designated in advance; the payday must not be more than 12 days (excluding Sundays/holidays) after the end of the pay period. Upon suspension or termination of employment the employer must pay all wages earned up to that time no later than the next regular payday for the pay period in which the wages were earned. (If wages are commission‐based, difference must be paid within 30 days of termination). Wages must be paid in U.S. currency (money) and may be paid by cash, check, direct deposit or other reasonable means. Employers may require direct deposit for new hires (post July 1 2005) with certain conditions, but Iowa law does not mandate only payment into a bank account for all employees.

Notice Period

An employer’s policy or employee contract governs whether earned or unused vacation is paid on separation.

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.
This depends on the employer’s agreement with the employee.

Minimal Statutory Termination Costs 

Some states require PTO balances to be paid out during termination, also any bonuses or commissions that were promised in the employment contract

Immigration

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.

 

VAT

General

Iowa has a State sales tax of 6%. Additionally, local jurisdictions can add their own sales taxes, known as Local Option Sales Tax (LOST), which is typically up to1%.

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Payroll contributions and personal income tax rates have been updated.
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Payroll and Benefits Guide in United States – Iowa

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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

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Public Holidays Calendar

United States – Iowa
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CSV
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ICS
Date Day Holiday Notes
1 January 2026 Thursday New Year’s Day Standard holiday
19 January 2026 Monday Martin Luther King, Jr. Day Standard holiday
16 February 2026 Monday Washington’s Birthday Standard holiday
25 May 2026 Monday Memorial Day Standard holiday
3 July 2026 Friday Independence Day (Observed)
7 September 2026 Monday Labor Day Standard holiday
11 November 2026 Wednesday Veterans Day Standard holiday
26 November 2026 Thursday Thanksgiving Day Standard holiday
27 November 2026 Friday Friday after Thanksgiving
25 December 2026 Friday Christmas Day Standard holiday