NEWWorklio Insurance: benefits and pay-as-you-go workers' comp, built into payroll.Learn more
WORKLIOHCM · Payroll + HRInsurance · Benefits + Coverage
Worklio for platforms · embedded payroll
HCM
Book a demo
All resources
REMOTE EMPLOYEES

Hiring a remote employee in Iowa

Your company is in another state and one employee lives and works from home in Iowa. Which state's taxes apply, unemployment, paid leave and Iowa's employer rules, each with its official source.

Facts checked on October 5, 2026 against the official sources listed at the end of this page. For employers. General information, not legal or tax advice: confirm a rule with the agency before you rely on it.

Iowa at a glance

Income tax
Iowa withholding
Reciprocity
With Illinois
Unemployment
$20,400 wage base, 1% new employer
Paid leave
None
New hire report
Within 15 days

Which state's taxes apply

Work state
Iowa taxes wages for work done in Iowa. Withhold Iowa income tax on the employee's wages.Source: Iowa Department of Revenue, Iowa Withholding Tax Information (opens in a new tab), checked October 5, 2026
Withholding form
IA W-4 (44-019)Source: Iowa Department of Revenue, Iowa Withholding Tax Information (opens in a new tab), checked October 5, 2026
Reciprocity
If your office is in Illinois: Iowa residents working there are withheld for Iowa, with IL-W-5-NR.Source: IDOR, Form IL-W-5-NR, Employee's Statement of Nonresidence in Illinois (PDF); Publication 130 (February 2026) (opens in a new tab), checked October 5, 2026
Convenience rules
If your company is in Delaware, New York or Pennsylvania, the employee is assigned to an office there and works there on some days, that state taxes the days worked from home in Iowa for the employee's convenience.Source: Delaware Division of Revenue, 2025 Form PIT-NON Instructions, Non-Resident Individual Income Tax Return (PDF) (opens in a new tab), checked October 6, 2026; NYS DTF, TSB-M-06(5)I, New York Tax Treatment of Nonresidents and Part-Year Residents: Application of the Convenience of the Employer Test to Telecommuters and Others (May 15, 2006, PDF) (opens in a new tab), checked October 6, 2026; PA Department of Revenue, PA Personal Income Tax Guide, Gross Compensation (opens in a new tab), checked October 6, 2026
Office days in your company's state
That state's day limit, if it has one, decides whether it withholds on those days: see its page, or the helper below.
An employee from another state working in Iowa
Iowa sets no day count before a nonresident's wages for work there are withheld.Source: Iowa Department of Revenue, Iowa Withholding Tax Information (opens in a new tab), checked October 6, 2026

Where to withhold: two states

Pick your company's state, the state where the employee lives and works from home, and the days a year the employee works at your office. The answer reads each state's rules from the data on these pages.

Your company is in
Employee lives and works from home in
Days a year at your office
Assigned to an employer office in New YorkMatters only in the states with a convenience rule (Connecticut, Delaware, New Jersey, New York and Pennsylvania), and only with office days there.

Income tax withholding

  • Iowa: all wages.

No New York withholding: the employee does no work in New York.

Unemployment

Iowa: the employee works from home there, so the work is localized in Iowa.

Simplified: resident credits, dollar tests, local taxes and a move during the year are not worked out here. Each state's rule and its source are on its page.

Unemployment

The employee works from home in Iowa, so the work is localized in Iowa: pay Iowa unemployment tax, not your company state's.

Agency
Iowa Workforce Development, Unemployment Insurance Tax BureauSource: Iowa Workforce Development, Unemployment Insurance (employers) (opens in a new tab), checked October 5, 2026
Wage base
$20,400 IndexedSource: IWD, Information on Rate Computations for Private Employers 2026, 70-5015 (10/2025) (PDF) (opens in a new tab), checked October 5, 2026
New employer rate
1% 1.0%: the rank 4 rate of the table in effect (Table D, 0.3% for 2026), but not less than 1.0%; construction 5.4% (rank 9) Surcharges included Construction 5.4%Source: IWD, Information on Rate Computations for Private Employers 2026, 70-5015 (10/2025) (PDF) (opens in a new tab), checked October 5, 2026

Open the account: Iowa payroll tax registration

Iowa has no paid leave program funded through payroll.

Iowa employer rules

Employment law applies where the employee works, so these follow the employee into Iowa.

Final pay
Fired: Next regular payday Quit: Next regular paydaySource: Iowa Department of Inspections, Appeals, and Licensing (DIAL), Wage and Child Labor Unit: Wage (opens in a new tab), checked October 5, 2026
Pay frequency
At least monthly, semimonthly or biweekly on regular paydays; payday no more than 12 days (excluding Sundays and legal holidays) after the period endsSource: Iowa Code 2026, §91A.3(1) (PDF) (opens in a new tab), checked October 5, 2026
Pay notice
Only once the DIAL director orders it, after the employer has paid a wage claim (§91A.10) or been assessed a civil money penalty (§91A.12): written notice of wages and paydays at hire, and notice one pay period ahead of changes that reduce wages or alter paydays.Source: Iowa Code 2026, §91A.6 (PDF) (opens in a new tab), checked October 5, 2026
New hire reporting
Within 15 days of the date of hire.Source: Iowa Department of Revenue, Iowa Withholding Tax Information (opens in a new tab), checked October 5, 2026
E-Verify
From July 1, 2026, state agencies, the legislature, regents institutions, counties, cities, school districts, charter and innovation zone schools, and accredited nonpublic schools must E-Verify new hires. No private-employer mandate.Source: Iowa General Assembly, Senate File 2218 (2026), enrolled (PDF) (opens in a new tab), checked October 5, 2026
Sick leave
No state sick leave law.Source: Iowa Department of Inspections, Appeals, and Licensing (DIAL), Wage and Child Labor Unit: Wage (opens in a new tab), checked October 5, 2026

When the employee moves

Re-check the work state and the registrations before the next payroll: a move changes which state's withholding, unemployment, paid leave and employer rules apply.

Registering your business in Iowa, and whether one remote employee creates tax nexus for your company, are separate questions this page does not cover.

More on Iowa

WORKLIO HCM

Payroll for employees who work from home in another state

Worklio HCM withholds by home and work state, reciprocity included, and handles city and county taxes. We help open state withholding and unemployment accounts when you hire somewhere new, and our registration service can register your employer tax accounts for you. Taxes are calculated, deposited and filed in every state and locality, and when an agency notice arrives, you upload it and our tax team resolves it.

Remote employees in other states

Sources

The agency page or document behind each fact, as checked.

General information, not legal or tax advice. Rules change; confirm current requirements with the relevant agency or your advisor. You remain responsible for your employment taxes and for each state's rules.

Your next payroll could be your first one on Worklio.

Book a demoSee pricing