Estimate your take-home pay in Iowa. The state applies a single flat income tax rate of 3.8% to taxable wages, so every paycheck gives up the same share to state tax on top of federal withholding, Social Security, and Medicare.
Disclaimer: All figures on this page are estimates for general informational purposes only and are not financial, tax, or legal advice. Tax rates, brackets, and withholding rules change and vary by locality and personal circumstances. Verify current rates with the Iowa Department of Revenue or the IRS, and consult a qualified tax professional before making financial decisions.
Iowa Tax Snapshot
- State Income Tax
- 3.8% top rate
- Sales Tax (state + local avg)
- 6.94%
- Avg Property Tax Rate
- 1.52%
- Median Home Value
- $181,400
- State Minimum Wage
- $7.25/hr
Did You Know?
Iowa replaced its nine graduated brackets with a single flat 3.8% individual income tax effective in 2025.
Iowa vs. Other Flat-Tax States
Iowa is one of 15 states that apply a single flat rate to taxable wages instead of graduated brackets. Its 3.8% rate is the 7th-lowest in that group, which runs from Arizona at 2.5% to Idaho at 5.3%.
Measured against all 42 states and jurisdictions that tax wages, Iowa's 3.8% rate ranks 35th-highest and sits below the national median top rate of 5.25%.
For comparison, nearby states line up like this: Illinois (top rate 4.95%); Minnesota (top rate 9.85%); Missouri (top rate 4.7%); Nebraska (top rate 4.55%); South Dakota (no income tax).
How Iowa's Flat Tax Affects Your Take-Home Pay
When you earn a paycheck in Iowa, your employer withholds federal income tax, Social Security (6.2%), and Medicare (1.45%). On top of that, the state withholds income tax based on flat rate of 3.8%. The state minimum wage is $7.25 per hour, which sets the floor for hourly workers. Understanding these deductions helps you budget effectively and plan for the average 1.52% property tax rate on homes valued around $181,400.
Iowa also levies a combined state and average local sales tax of 6.94%, which affects your overall purchasing power. Factor this into your budget when calculating how far your paycheck stretches.
Where You Live vs. Where You Work in Iowa
Iowa has income tax reciprocity agreements with Illinois. If you live in Iowa and work in one of those jurisdictions — or the other way round — your wages are taxed only by your state of residence, provided you file the non-residence certificate your employer's state requires. Without that form on file, the work state will withhold anyway and you will have to claim it back.
Many Iowa school districts levy a surtax calculated as a percentage of your state income tax liability. Local withholding is separate from the state line on your pay stub, so check it explicitly if you move house or change work location without changing employer.