Iowa Take-Home Pay Calculator

Q: What is Iowa's state income tax rate?

Iowa has a flat state income tax rate of 3.8% for both the 2025 and 2026 tax years, following comprehensive tax reform (Senate File 2442) that replaced a progressive system topping out at 8.53%.

Q: How big of a change was Iowa's move to a flat tax?

Very significant — Iowa's previous top marginal rate was 8.53%, one of the higher rates in the country. Moving to a single 3.8% flat rate for all income represents one of the largest state income tax cuts in recent U.S. history for higher earners specifically.

Q: Does Iowa tax retirement income?

No. Iowa fully exempts retirement income — including pensions, 401(k) and IRA distributions, and Social Security — from state income tax for eligible retirees, a separate reform enacted a few years before the flat-tax transition.

Q: Does Iowa have local city income tax?

No. No Iowa city or county levies a separate income tax on wages — the flat state rate is the entire income tax picture.

Estimate your Iowa paycheck using IA's flat 3.8% state income tax rate, plus federal income tax and FICA.

Written by the Calculator Index team · Source: Iowa Department of Revenue (flat 3.8% rate, Senate File 2442); IRS 2025 federal figures · Last reviewed September 2026

Take-home pay per paycheck

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Annual take-home

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Monthly take-home

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Federal income tax

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Iowa state tax (3.8%)

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Social Security (6.2%)

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Medicare (1.45%+)

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What comes out of an Iowa paycheck

Net pay = Gross − Federal income tax − ((Gross − Pre-tax − $2,210 standard deduction) × 3.8%) − Social Security − Medicare − Pre-tax deductions

Iowa completed one of the more dramatic state tax overhauls in the country, replacing a progressive system that topped out at 8.53% with a single flat 3.8% rate effective January 1, 2025. For higher earners especially, this represents a substantial tax cut compared to Iowa's previous system.

Worked example — $80,000, single, biweekly

IA-taxable income: $80,000 − $4,000 pre-tax − $2,210 standard deduction = $73,790. IA tax: $73,790 × 3.8% = $2,804.02.

Federal tax (on $61,000 taxable) ≈ $8,334 · IA state tax ≈ $2,804 · Social Security $4,960 · Medicare $1,160.

Annual take-home ≈ $58,742 → about $2,259 per biweekly paycheck (73.4% of gross).

From 8.53% to 3.8% — one of the country's biggest recent tax cuts

Iowa's prior system taxed higher incomes at a top marginal rate of 8.53%, among the higher rates in the Midwest. Senate File 2442, enacted in 2024, replaced the entire progressive bracket structure with a single flat 3.8% rate starting with the 2025 tax year — a change that primarily benefits higher earners who previously faced the top bracket, while having a smaller effect on lower-income filers who were already taxed at lower rates under the old system.

Iowa's retirement income exemption

Separately from the flat-tax reform, Iowa fully exempts qualifying retirement income — pensions, 401(k) and IRA distributions, and Social Security — from state income tax for eligible retirees. This calculator is built around wage income and doesn't model retirement scenarios.

Common mistakes when estimating Iowa take-home pay

Using Iowa's old progressive brackets. They were fully replaced by the flat 3.8% rate starting with the 2025 tax year.
Applying the retirement exemption to wage income. It applies to pensions, retirement account distributions, and Social Security, not ordinary wages.
Expecting a local city income tax. No Iowa city or county levies one.

Frequently asked questions

What is Iowa's state income tax rate?

A flat 3.8% for both 2025 and 2026, replacing a progressive system that topped out at 8.53%.

How big of a change was Iowa's move to a flat tax?

Very significant for higher earners — the previous top rate of 8.53% dropped to a flat 3.8% for everyone.

Does Iowa tax retirement income?

No — pensions, retirement account distributions, and Social Security are fully exempt for eligible retirees.

Does Iowa have local city income tax?

No — no Iowa city or county levies a separate income tax on wages.

Related calculators

Note: Simplified estimate using 2025 state and federal figures; excludes the retirement income exemption, credits, and benefit specifics. Not tax advice. Figures: 2025 Iowa and federal tax year. Last reviewed: September 2026.