Iowa Payroll

Did you know that Iowa has a reciprocal withholding agreement with Illinois that allows income tax withholding for the employee's state of residence only?

Iowa Income Tax Withholding

Iowa requires employers to withhold state income tax from employee's wages and remit the amounts withheld to the Department of Revenue.

Every employer that has an office or does business in Iowa and that is required to withhold federal income tax on any compensation paid in the state must withhold Iowa individual income tax from that compensation. Responsibility for collecting and remitting the tax rests with the employer or withholding agent.

Agricultural employers must withhold Iowa tax from wages if federal income tax must be withheld.

Iowa and Illinois have a reciprocal withholding agreement, with that, provides for withholding from wages for the employee's state of residence only.

Iowa Benefits

Iowa Voting Rights:

Employer Right To Schedule Voting Hours	Pay Deduction For Voting Time Leave
Yes	Time Off with Pay Limited to 2 Hours

Iowa requires employers to allow employees sufficient leave time to vote.

This summary is restricted to coverage of private employers. Employers must grant enough voting time leave—not to exceed three hours—to give employees three consecutive hours to vote. Employers can designate the time to be taken.

Iowa Compensation

Employees covered by Iowa's minimum wage law must be paid at least $5.15 an hour.

All employees are covered except for:

• those exempt from coverage by the Fair Labor Standards Act;
• those serving in an executive, administrative, or professional capacity;
• outside salespersons;
• employees of retail or service establishments if more than 50 percent of the annual dollar volume of sales is made within the state and 75 percent of the annual dollar volume of sales is not for resale;
• retail or service establishments with annual gross income less than 60 percent of the FLSA limit;
• certain maritime employees; and
• certain agricultural employees.

Iowa Payroll

Employers covered by Iowa's wage payment law must pay wages at least once in a calendar month, semimonthly, or biweekly. Payments must be made not more than 12 days following the close of a pay period, excluding Sundays and legal holidays.

All employees are covered, except those specifically exempt by statute; among those exempt are certain agricultural employees.

Iowa Unemployment:

Taxable Wage Base ($000s)	New Employer Rate (% Taxable Wages)	Employee Tax Rate (% Taxable Wages)	Period Effective
22,000	1 - 8	None	Calendar Year 2007

Helpful Links for Iowa Payroll

Iowa Department of Revenue
Hoover State Office Building
1305 E. Walnut Street
P.O. Box 10457
Des Moines, Iowa 50306
(515) 281-3114

Iowa Workforce Development - Unemployment Insurance Services
1000 East Grand Avenue>br> Des Moines, Iowa 50319
(515) 281-5387

Iowa Department of Human Services (for W-4 reporting)

Iowa Laws

Iowa State Regulations

Tax Forms and Publications