Paycheck Calculator Iowa - IA

(Tax Year 2023: Last Updated on May 28, 2023)

Enter your period or annual income and the required federal, state, and local W4 information into our free online payroll calculator to determine your net pay or take-home pay in Iowa. Iowa has a nine-bracket progressive income tax system with income tax rates ranging from 0.33% to 8.53%. In Iowa, almost 300 school districts also impose personal income surtaxes.

Income Information

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Pay Type Salary Hourly

Pay

Pay Frequency Weekly Bi-Weekly Semi-Monthly Monthly Quarterly Annually

Hourly Rate

Hours (Straight Time)

Hours (Time & 1/2)

Hours (Double Time)

Bonus/Commission/Tips

Federal Withholding

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Marital Status Single Married

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Employee Information
Employee Name
Check Date
Pay Frequency
Hourly Rate
Federal Withholding
Marital Status
Withholding Allowances
State Withholding
State

Pay Type	Amount
Salary

Pay Type	Hours	Amount
Straight Time
Time & 1/2
Double Time
Gross Pay

Deduction Type	Amount
Federal Income Tax
Social Security
Medicare
Total Deductions

This Check (Take Home)

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Iowa - IA Paycheck Calculator: Hourly and Salary

If you are here, either you are planning to move to Iowa or thinking to start a new business or job there. Either way, this guide would help you. All you need to do is to continue reading.

Iowa, a Midwestern U.S. state that lays between Mississippi Rivers and Missouri. Also known as The Hawkeye State, this state has a plethora of attractions, a strong economy, solid infrastructure, fun-loving people and one of the top quality life across the nation.

With the fast-growing population and economy, this state has proven to be the land of opportunities for many. If you are looking for a job than then this municipal offer plenty of them especially for occupations like a physical therapist, occupational therapist, information security analyst, operations analyst and nurse practitioner. Moreover, this place also houses some of the highest paying jobs including dentists, podiatrists, CEO, and surgeons. Remember that the current unemployment rate here is just 2.9%, which is significantly below the national average, thus, the probability of finding a good job here is quite high.

Now that you have figured out the job scene, the next thing you need to know about is housing. The median home price and median rent in Iowa are fairly below the national average, making it affordable for many. Moreover, the cost of living is also with a score of 89.9, whereas the national average is 100. Thus, saving a lot of bucks for you without compromising with your quality life.

Along with job opportunities and housing, the Hawkeye State has plenty of schools, colleges, and universities that offer quality education, so that your kid can have a bright future and successful life.

No matter how better your job is, life without outing is just boring, but don't you worry as this state has plenty of outdoor opportunities like hiking, boating, and biking as well as numerous natural and beautiful landscapes to explore.

So, after reading all of these earlier mentioned perks, you must have made up your mind to move here.

But Wait!

Have you figured out how much you are going to earn here to spend a quality and peaceful life?

NO?

Don't Worry! We have done all the hard work for you. All you need is to carry on reading.

Our experts have researched and created a wonderful Paycheck Calculator along with a comprehensive guide to help you deduce the take-home pay. So whether you are an employer trying to calculate your employment expenses for the business in Iowa or you are an employee struggling to determine your paycheck amount, this ultimate guide is for everyone.

Before jumping to the steps to calculate paycheck, here are some of the interesting state, payroll and tax facts about Iowa that you need to know:

Iowa Tax and State Facts:

• Along with Federal Income Tax, ranging from 0% to 37%, residents of Iowa are also entitled to State Income Tax that is charged on a progressive rate ranging from 36% to 8.98%, with nine tax brackets depending on your income level, regardless of your filing status.
• As per Iowa regulations, the income tax rate for Supplemental Wage and bonuses is 6.0%.
• Appanoose is the only one county of Iowa that charges the local income tax at a flat rate of 1% on to its residents. Moreover, 300 plus school districts in Iowa levy a surtax that is equal to a percentage of state taxes paid by the residents.
• Minimum Wage in Iowa is the same as the federal minimum wage of $7.25. However, there are some exceptions, that are discussed ahead in this article.
• The Cash Minimum Wage rate in Iowa is $4.35, with the maximum tip credit of $2.90.
• Iowa has one of the lowest crime rates across the nation, making it one of the safest places to raise your kids.
• Average Salary in Iowa is $20k-$42k/year (as in 2023).
• The Median household in Iowa according to United States Census Bureau is $56,570.
• Illinois and Iowa State has a reciprocal agreement, on which any Iowa resident working in Illinois is only taxable to Iowa, and any Illinois resident working in Iowa is only taxable to Illinois.
• Iowa doesn't charge a State Disability Insurance Tax. However, employers are required to pay State Unemployment Insurance Tax at the rate ranging from 0% to 7.5% on the first $29,900 earned in wages by each employee. However, new employers only have to pay a flat rate of 1%.
• Livable Wage in Iowa for a Single Adult is $10.89 and for a couple (both working) with 1 child is $12.86.

How to calculate Take-Home Pay in Iowa?

To calculate Take Home Pay or Paycheck, you need to go through several steps that include calculation of Gross Pay, Pre-Tax Deductions, Federal Taxes, State Taxes, Post Tax Deductions, Local Tax, etc.

To make it easy for you, we have divided this guide into steps, which would give a general idea. However, there may be some differences or additional taxes that you may be subjected to, according to your situation. As it's a comprehensive guide, we can only discuss general aspects.

Step 1 - Calculating Gross Pay:

1. To calculate Gross Pay, first, you need to determine the Pay Type of an employee. It is whether an employee is paid on an hourly basis or salary basis.

Hourly Employees:

Hourly Base Employees are paid for each hour they work in a day or a week, at the mutually agreed hourly rate. However, the mutually agreed hourly rate must be as per the Federal and State Minimum Wage law.

Hourly Employees are also entitled to receive overtime, for each excess hours worked after Regular worked hours in a day or week. The overtime rate in most of the states is one and a half times the regular hourly rate.

Salaried Employees:

Salaried employees receive a fixed but mutually agreed on pay, for a decided pay frequency, usually semi-monthly or monthly. However, for gross payment determination for a pay period, the annual salary is divided by the pay frequency.

Most of the salaried employees are exempted from Overtime law. Therefore, they are not entitled to receive overtime, regardless of how many excess hours they work. However, some exceptional salaried employees may be eligible to receive overtime according to federal or state law.

2. Remember, Supplementary Wages like bonuses, commissions, and paid leaves, as well as double time and fringe benefits, are also taxable wages. Therefore they must also be included in gross pay before federal and state tax calculation.

Step 2 – Subtracting Pre-Tax Deductions (If Any):

Pre-Tax Deduction is an amount deducted from employee's gross pay before any withholding tax is deducted. These deductions have several advantages, including the reduction of taxable wages. Hence, increasing the take-home pay of an employee. However, not all deductions can be considered as free from all taxes, which means some of the deductions may require certain taxes to be withheld.

Some of the standard Pre-tax deductions are:

• Health Savings Accounts or FSA or HSA plans
• Commuter Benefits
• Healthcare Insurance
• Short-Term Disability
• Dental Insurance
• Medical Expenses and Flexible Spending Accounts
• Vision Benefits
• Retirement funds like a traditional 401(k)

Step 3 – Calculate and Subtract Federal Taxes:

Federal Taxes are taxes deducted from almost every employee, regardless of which state or county they work in.

Federal Taxes are calculated according to the details provided by the employee on Form W-4, which comprises of income, filing status, number of dependents, number of allowances, number of jobs, etc.

The details are form W-4, are assessed and used by the employer to deduce the federal tax bracket, in which the employee's taxable wage lay upon.

Federal Taxes ranges from 0% to 37% have seven tax brackets, depending on filing status, income, and the number of allowances claimed. Below is the income tax details for the year 2023:

Step 4 – Deduct FICA Taxes:

Along with Federal Withholding, employers are also required to withhold Federal Insurance Contributions Act (FICA) taxes from the employee's paycheck as well as pay a matching amount themselves to the IRS.

There are two types of FICA taxes:

1. Social Security:

Employers are entitled to withhold 6.2% from the first $132,900 (wage base limit for 2023), taxable wages earned by the employee. Moreover, the employer is also required to pay an equal amount to the IRS for each employee.

2. Medicare:

Medicare tax is another type of FICA Tax that an employer must withhold from the taxable gross wage of the employee, at the rate of 1.45%. Unlike social security, there is no wage base limit. However, if the employee earns more than the defined threshold than he/she is subjected to an additional 0.9% of the Additional Medicare Tax rate, for every dollar earned above the threshold amount.

Like Social Security, IRS also requires the employer to pay an equal amount of Medicare tax for each employee.

Step 5 – Payment of FUTA Taxes

The Federal Unemployment Tax Act (FUTA) is a tax that the IRS requires the employer to pay without deducting anything from the employee's paycheck.

The FUTA Tax rate for 2023 is 6.0% of the first taxable wage up to $7000 of an employee. However, once the taxable wage limit is crossed for a particular employee, then the employer no longer has to pay this tax.

What to reduce FUTA Tax?

Yes! Then you must pay State Unemployment Insurance (SUI) tax in full and on time and get a FUTA tax credit of up to 5.4%. Which means, you saved a whopping 90% from FUTA Tax.

Step 6 – Subtract Post-Tax Deductions (If any):

Although, employers are not required to withhold any amount as a post-tax deduction, unless if an employee voluntarily asks to do so. However, there are some deductions ordered by the court like child support or wage garnishment, which the employer is entitled to deduct.

Step 7 – Withhold Iowa State Payroll Taxes:

As we are done with Federal Taxes and Pre-tax deductions, now it's time to calculate State Payroll Taxes. Iowa State generally charges two taxes on Payroll, one is State Income Tax which is to be withheld from the employee's paycheck and the other one is SUI tax, which is funded by the employers.

Iowa State Income Tax:

Iowa State has a progressive income tax system, with nine tax brackets, solely depending on the income level. Unlike most of the other states, Iowa's income tax doesn't depend on the filing status.

The state requires the employer to withhold this income tax from the employee's paycheck and pay it to the state. The employer must charge the tax according to the details including filing status, number of allowances, etc. provided by the employee on Form IA W-4.

The employees must also ensure that all their details on the Form are updated especially on significant events of their life like marriage, divorce or child's birth. Moreover, they must also wisely calculate the number of Allowances they need to claim for the State income tax, as claiming more than required number of Allowances may lead to penalty, whereas, claiming fewer than required number of Allowances is like giving your money to the government as a tax-free loan for a whole year until it is refunded back.

Employers are required to consider the following tax brackets to deduce the withholding amount that is to be deducted from employee's paycheck:

State Unemployment Insurance Tax:

State Unemployment Insurance (SUI) Tax is a tax program funded by employers to provide temporary benefits to the jobless employees. The purpose of this program is similar to FUTA, which is required by federal law.

The state requires the employer to pay this tax on the rates ranging from 0% to 7.5%, on the first $29,900 earned by each employee. However, new employers are given a benefit to paying a flat rate of 1%.

Step 8 – Withhold Local Tax:

In addition to State Income tax, one county charges the local income tax and 300 plus school districts also charge a surtax on the percentage of Iowa taxes paid by residents.

Appanoose County charges the Local Income Tax of 1% on to its residents. Moreover, the School District surtax rates are as follow:

Step 9 – Calculate Pay Check:

Once you are done with all elements (steps) discussed earlier, you will have a net pay amount for each employee. Now all you have to do is pay employees on time. Also, to file all Federal Taxes, State Taxes, FICA, and FUTA taxes on time, to avoid any penalties.

Federal and Iowa State Tax Laws:

• The Federal Minimum Wage and Iowa State Minimum wage rates are the same at $7.25. However, there are some exceptions, that are as follow:
  • New Employees with age under 20, are allowed to be paid a training minimum wage rate of $4.25 / hour for the first 90 days of employment.
  • Full-time high school or college students, working on a certain job like work-study programs, are allowed to be paid 85% of the standard minimum wage for up to 20 hours of work in a week.
  • Tipped Employees who make $30 or more in a month are allowed to be paid a minimum wage rate of $4.35 with a maximum tip credit of $2.90.
  • Employees who are exempted from the Minimum Wage Law under FLSA are also exempted from Iowa Minimum Wage law.
  • Federal Contractor Employees are entitled to receive a minimum wage rate of $10.60 per hour.
• Iowa Minimum wage law is generally applicable to the employers with at least annual sales or business of $300,000. However, some employers regardless of their sales and business volume are required to abide by the law.
• Employees working in Iowa are allowed to be paid on bi-weekly, semi-monthly or at least monthly basis on regular paydays as scheduled by the employer. However, Payday for the last pay period must be no more than 12 days after the last pay period ends.
• Iowa State doesn't entitle the employer to provide paid or unpaid vacation benefits. However, if the employer volunteers it that it must be according to terms and conditions defined in the employment contract or company's policy.
• State law doesn't require the employers to provide meal and lunch breaks to their adult employees. However, Minor employees of age under 16 are required to have a 30 minutes lunch breaks if they are employed for 5 or more continuous hours of work.
• Iowa employers are not regulated by the state to provide pay raise to their employees unless an employment contract specifies it.
• Employers are allowed to only deduct payroll taxes, garnishments, and deductions that are authorized by the employee including 401K, insurance, pensions, and bonds and saving programs.
• Iowa State doesn't regulate Overtime. Therefore, employers and employees are required to follow Overtime Law by FLSA, where employers are required to pay overtime to the non-exempted employees at one and half times of regular hourly rate for each excess hour worked after 40 hours in a workweek. However, certain employees are exempted from the overtime law under FLSA.

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