Iowa pay stubs: flat 3.8% state tax and IA W-4

State income tax

Iowa phased out its graduated brackets over several years, and since 2025 all taxable income has been taxed at a single rate. For 2026 that rate is 3.8%. The Iowa Department of Revenue still publishes withholding formulas and tables each year, updated for inflation and law changes, so use the 2026 versions. When federal tax on a payment is withheld at a flat rate, such as some supplemental pay, Iowa withholding is also taken at 3.8%.

Employees set their state withholding on Form IA W-4. It is separate from the federal W-4, so ask for both at hiring.

Other state payroll deductions

Iowa does not have a state disability insurance program or a payroll-funded paid family leave program. State unemployment insurance is paid by employers. For most workers, the Iowa part of the stub is one line.

Local taxes

Iowa has no city or county income tax on wages. Many Iowa school districts do impose a school district surtax, but it is calculated as a percentage of the resident's Iowa income tax and paid when they file their annual Iowa return. It is generally not withheld from paychecks, so it does not appear on a typical Iowa pay stub. Employees who expect to owe it can ask for a little extra state withholding on their IA W-4.

Federal withholding still applies

State rules sit on top of the federal ones, not in place of them. Every Iowa paycheck also shows:

• Federal income tax, based on the employee's Form W-4.
• Social Security at 6.2% of wages, up to the annual Social Security wage base.
• Medicare at 1.45% of all wages, plus an additional 0.9% on wages above $200,000 in a calendar year.

Creating an Iowa pay stub with PayStubNest

Enter the hours worked and hourly rate, or an annual salary, and choose Iowa as the work state. The exact figures on each stub depend on the employee's pay, pay frequency, W-4 choices, deductions and year-to-date totals, so no two paychecks are quite alike. PayStubNest calculates all of it automatically, applying federal and Iowa withholding and carrying year-to-date totals forward from one stub to the next. You can preview a stub for free and only pay when you download it.

Record-keeping tip

If an employee asks for extra Iowa withholding to cover the surtax, record the extra amount as its own note so it is not mistaken for an error later. Formulas, tables and the IA W-4 are on the Iowa Department of Revenue site. More help is in our guides.