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Taxes
Iowa Payroll Taxes 2026: Complete Overview for Employers
Iowa graduated 4.4%–5.7% income tax, SUI on the first $38,200, and all employer tax obligations explained.
Practical guides on IA payroll taxes, employer registration, SUI, minimum wage, and labor laws — written for small business owners, not accountants.
Written by payroll professionals at Pacific Data Services — trusted since 1969.
Iowa’s income tax has rates from 4.4% to 5.7%, dramatically simplified from its former nine-bracket system through ongoing tax reform.
Iowa’s $38,200 SUI wage base is well above the national average, increasing annual unemployment insurance costs per employee.
Iowa’s income tax rates are scheduled to continue decreasing, so employers should monitor legislative updates for withholding changes.
Iowa graduated 4.4%–5.7% income tax, SUI on the first $38,200, and all employer tax obligations explained.
Get your EIN, register with Iowa, set up withholding, new hire reporting — the complete checklist.
New employer rate 1.0%, experienced range 0.00%–7.00%, wage base $38,200.
Iowa minimum wage $7.25/hr. Iowa’s minimum wage is $7.25/hr, matching the federal minimum. Tipped employees may be paid $4.35/hr.
IRS classification rules, Iowa-specific considerations, misclassification penalties.
Gusto vs Paychex vs QuickBooks vs ADP — detailed comparison for Iowa small businesses.