Iowa Payroll Taxes for Employers (2026): SUTA and State Programs
Last updated: 2026-10-12 · 2026 rates checked against Iowa Workforce Development's own pages and the other official sources below
Iowa employers pay state unemployment tax (SUTA) on the first $20,400 of each employee's wages in 2026, and new employers pay 1% — at most $204.00 per employee for the year. Every Iowa employer also pays federal Social Security (6.2% up to $184,500), Medicare (1.45%) and FUTA (0.6% on the first $7,000).
What will payroll taxes cost me in Iowa?
Enter your headcount and average pay to see the employer's share of Iowa and federal payroll taxes for 2026. Change the SUTA rate to the one on your rate notice.
Iowa employer payroll tax estimator · 2026
Runs in your browser · nothing is sent anywhere| Tax | Per year |
|---|---|
Iowa unemployment (SUTA) 1% × first $20,400 per employee | $1,020 |
Federal unemployment (FUTA) 0.6% × first $7,000 after the full state credit | $210 |
Social Security (employer half) 6.2% × first $184,500 | $15,500 |
Medicare (employer half) 1.45% of all wages | $3,625 |
| Total employer taxes | $20,355 |
| Per employee | $4,071 |
Assumes every employee earns the average and works in Iowa all year. Workers' comp premiums and benefits are extra — the payroll cost calculator adds them.
Iowa unemployment insurance tax (SUTA) in 2026
- 2026 taxable wage base
- $20,400 per employee (19th highest of 51)
- New-employer rate
- 1%
- How the new-employer rate works
- Wage base cut to $20,400 for 2026 (from $39,500) by Senate File 607. New non-construction employers pay 1.000% in 2026; new construction employers 5.400%.
- Most a new employer pays per employee
- $204.00 (1% × $20,400)
- Experience-rated range (2026, as published)
- 0% to 5.4%
- 2025 average employer rate
- 0.94% of taxable wages (U.S. DOL)
- Employee contribution
- None — employer-paid only
Register with Iowa Workforce Development when you first pay wages in Iowa; you get an account number for quarterly wage reports and tax payments.
Federal payroll taxes every Iowa employer pays
- Social Security: 6.2% from you and 6.2% withheld from the employee, on wages up to $184,500 in 2026.
- Medicare: 1.45% each on all wages; withhold an extra 0.9% (employee only) on wages over $200,000.
- FUTA: 6.0% of the first $7,000 per employee, less up to 5.4% credit for Iowa unemployment tax paid on time = 0.6%, or $42 per employee.
- Federal income tax withholding from each paycheck based on the employee's Form W-4.
Next for Iowa employers: Iowa paycheck calculator (employee withholding) · Iowa new hire reporting · Iowa payday & final paycheck rules · Iowa workers' comp · full payroll cost calculator
Iowa payroll tax FAQ
What is the Iowa SUTA rate for new employers in 2026?
1%. Wage base cut to $20,400 for 2026 (from $39,500) by Senate File 607. New non-construction employers pay 1.000% in 2026; new construction employers 5.400%.
What is the Iowa SUTA wage base for 2026?
$20,400 per employee. Once an employee's 2026 wages pass that amount, you stop paying Iowa unemployment tax on them for the rest of the year. That is the 19th highest wage base of the 50 states and DC (the federal FUTA base is $7,000).
Do employees pay unemployment tax in Iowa?
No. In Iowa unemployment tax is paid only by the employer; it can't be deducted from pay. Only Alaska, New Jersey and Pennsylvania collect an employee share.
What other payroll taxes do Iowa employers pay?
For 2026, Iowa has no statewide paid-leave or disability payroll tax, so the state-level employer tax is unemployment insurance. You still withhold any state income tax from employees' pay.
How much FUTA do Iowa employers pay?
0.6% of the first $7,000 of each employee's wages — $42 per employee per year — after the full 5.4% credit for paying Iowa unemployment tax on time. Iowa is not a credit-reduction state for 2026.
How does my Iowa SUTA rate change after the first years?
New employers keep the new-employer rate until they have enough history to be experience-rated (the timing is set by state law). After that, Iowa Workforce Development assigns a rate each year based on your layoffs and benefit charges; published 2026 rates run from 0% to 5.4%. Use the rate on your annual rate notice. The 2025 average employer rate in Iowa was 0.94% of taxable wages.
Official Sources
Figures checked against these sources on 2026-10-12Related Resources on This Site
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- LLChow to form an LLC in Iowa
- FormationIowa annual report due date, fee & franchise tax
- Sales TaxIowa sales tax rates & rules
- Minimum WageIowa minimum wage
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Payroll taxes in other states
All states in one table, plus federal deposit rules and deadlines →
General information, not tax advice. Rates change every year; confirm yours on the notice from Iowa Workforce Development before filing.