Payroll and Benefits Guide - United States - Iowa

United States - Iowa
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Currency

United States Dollar (USD)
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Capital

Des Moines
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Employer Taxes

16.65% – 22.05%
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Date Format

mm/dd/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

Iowa is located in the Midwestern region of the United States.

It is known as the “Hawkeye State” and its residents are called “Iowans.”

Iowa is bordered by six states: Minnesota, Wisconsin, Illinois, Missouri, Nebraska, and South Dakota.

The world’s largest cereal company, Quaker Oats, has its headquarters in Cedar Rapids, Iowa.

The Iowa State Capitol building in Des Moines is one of the few state capitol buildings with five domes.

Iowa is known for its friendly residents and welcoming communities, often referred to as the “Iowa Nice” culture.

United-States-Iowa

Contributions

Employee Payroll Tax

Contribution TypeRate
FICA Social Security6.20%
FICA Medicare1.45%
Additional tax0.90%

Employer Payroll Tax

Contribution TypeRate
Unemployment Insurance7.4%
Unemployment- New Employer1.00%
FICA Social Security6.20%
FICA Medicare1.45%
FUTA0.60% – 6.00%

Payroll

Payroll Cycle

Any payroll cycle is permitted as long as employees get paid at least monthly and no later than 12 days from the end of the period when the wages were earned.

13th Salary

There are no statutory laws on 13th salary.

Work Hours and Week

A normal work week is 8-hour days and a 40-hour week.

Overtime

For non-exempt employees, overtime is paid at a rate of 150% of the regular pay in excess of 40 hours per week.
United-States-Iowa

Leave

Paid Time Off

Employers are not legally obliged to provide paid time off.

Public Holidays

There are 10 public holiday days.

Sick Days

Sick leave falls under the Family Medical Leave Act (FMLA). The FMLA provides certain employees with up to 12 weeks of unpaid, job-protected leave per year or certain family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child).

Maternity Leave

Maternity leave falls under the Family Medical Leave Act (FMLA) .

Paternity Leave

Paternity leave falls under the Family Medical Leave Act (FMLA) .

Parental Leave

Parental leave falls under the Family Medical Leave Act (FMLA) .

Termination

Termination Process

Iowa is an “at-will employment” state, and this means that an employer or employee can terminate an employment agreement without cause. A written termination letter or reason is not required.

Notice Period

While there is no official period required, the general practice is is 2 weeks.

Severance Pay

Iowa law does not either require or prohibit severance payments. It depends on the employer’s agreement with the employee.

Probation Period

Probation Period

Malta updated its employment law framework in 2023, including the requirement that definite contracts have a minimum term of six months.

The employment connection should not be subject to a new probationary term in the event of a renewal of a defined contract for the same job and tasks.

The probationary period will be computed using a two-month probationary period for every six months of the fixed-term contract’s tenure, which can range from six to fifteen months.

The probationary period will be one-third of the fixed-term contract’s duration if it is less than six months in length.

The probationary period must be six months if the fixed-term contract is more than 15 months.

Technical, executive, administrative, and management employees whose salaries are at least double the national minimum wage must serve a 12-month probationary term.

VISA

VISA

Foreign nationals without permanent resident status or a work visa are not permitted to work in the United States.

VAT

Iowa has a minimum combined sales tax rate of 6.82% (state tax is 6.00% and local tax is 0.82%).