Iowa Payroll Tax Calculator 2026

Employers in Iowa are subject to four main payroll taxes: Social Security (6.2% on wages up to $176,100 in 2025), Medicare (1.45% on all wages), FUTA (effectively 0.6% on the first $7,000 per employee after the standard state credit), and Iowa SUTA (State Unemployment Tax).

Iowa has a SUTA wage base of $38,200 for 2025. This means employers pay SUTA tax on the first $38,200 of each employee's annual wages. The average new employer rate is approximately 1.0%, though your actual rate depends on your experience rating (claims history).

Iowa's SUTA wage base of $38,200 is significantly higher than the federal minimum of $7,000, which means employers pay SUTA on a larger portion of each employee's wages. While the tax rate may be lower, the higher wage base can result in meaningful SUTA costs per employee.

Remember that employees also pay their share of FICA taxes (6.2% Social Security and 1.45% Medicare) which you withhold from their wages. The payroll tax calculator above focuses on the employer-side costs, which are an additional expense on top of the wages you pay.

As an employer in Iowa, you are also required to withhold state income tax from employee wages. Iowa has a flat 3.8% income tax rate. State income tax withholding is the employee's obligation, not an additional employer cost, but you must calculate and remit it correctly.