US payroll taxes Iowa

Your Ultimate Guide to US Payroll in Iowa

Managing payroll in Iowa? Read our state-by-state guide to US payroll taxes to learn what you must withhold and deduct from employee wages.

Stefana Zaric
Written by Stefana Zaric
August 3, 2023

Key takeaways

  1. Unemployment insurance is a key consideration for employers in Iowa, reducing financial pressure on individuals who become involuntarily unemployed.
  2. Personal income tax is a state tax in Iowa imposed on state residents but withheld and managed by employers.
  3. Workers’ compensation is another key payment that provides insurance for both injured workers and employers in Iowa.

As an employer, there are several responsibilities to consider to ensure compliance with local laws and employee satisfaction. Hiring employees in Iowa comes with its own requirements, such as paying unemployment insurance, withholding personal income tax, and workers’ compensation. 

As payroll experts, we’ve compiled this introductory guide to payroll taxes in Iowa for employers to remain compliant. 

Paying unemployment insurance

Most employers are familiar with the requirements of withholding federal taxes, such as Medicare and Social Security taxes. However, there are other employer payroll taxes to consider as well. One of the payroll withholding requirements in Iowa is unemployment insurance, also known as UI.

As an Iowa state tax, unemployment insurance is a national program administered by the US Department of Labor. The tax intends to provide temporary financial relief to people who are unemployed through no fault of their own.

Employers are responsible for paying unemployment insurance, and payment management can be completed through an online portal. For more information on paying unemployment insurance, you can review the Iowa Workforce Development Division. 

Withholding personal income tax from your Iowa employee

Employers in Iowa are also responsible for withholding personal income tax, a state income tax on income of Iowa residents. Also known as individual income tax, the amount is deducted from the employee’s wages and withheld by the employer.

After accurately calculating how much to withhold, the employer must pay the state. The process can be completed through Iowa’s online portal. For more information on withholding personal income tax in Iowa, you can browse the Iowa Department of Revenue for relevant information.

Paying your Iowa workers' compensation

Workers’ compensation is another important payment to consider as an employer in Iowa, even if you only have one Iowa employee. The insurance plan is designed to help employees who are injured or fall ill while performing their job. 

Workers’ compensation acts as wage replacement and medical benefit for employees who cannot work due to an unfortunate event during a job-related activity.  It protects the employee from financial strain during recovery and reduces the legal risk to the employer. 

In Iowa, workers’ compensation is typically purchased from a qualified commercial carrier. More information on qualified commercial carriers in Iowa can be found online.

Please be sure that you verify that your workers’ compensation insurance is compliant with the state’s regulations for workers’ compensation.

Simplify US payroll tax compliance with Deel

If you’re an employer in Iowa, this guide provides valuable information on state-specific payroll taxes, compliance, and requirements. However, there’s a lot more information on regulations to consider. To streamline the process and ensure full compliance, Deel offers a convenient solution. 

As a centralized payroll and HR platform, Deel is a comprehensive platform for managing payments, taxes, worker classification, and more. Interested to see our software in action? Request a demo from Deel and see how we help streamline US payroll processes and ensure compliance with state regulations. 

Disclaimer: This article is provided for general informational purposes and should not be treated as legal or tax advice. Consult a professional before proceeding.

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