Payroll and Benefits Guide United States – Iowa
Last updated: Mar 03, 2026
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 and Benefits Guide
in United States – Iowa
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| 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 |
Questions & Answers