Iowa Minimum Wage 2026: $7.25, With a $6.35 Initial Employment Rate
Iowa minimum wage is $7.25 per hour in 2026, matching the federal rate. Employers may pay $6.35 for the first 90 days and a $4.35 cash wage to tipped workers. Coverage thresholds, local preemption, overtime, and an employer checklist.
The Iowa minimum wage is $7.25 per hour in 2026, the same as the federal minimum wage and unchanged since 2008. Iowa's law has three features that differ from the federal rule: employers may pay an initial employment wage of $6.35 per hour for an employee's first 90 calendar days, tipped employees must receive a cash wage of at least $4.35 rather than the federal $2.13, and small retail and service businesses grossing under $300,000 a year are outside the state law. Iowa cities and counties cannot set their own minimum wage.
Reviewed September 2026
Figures come from the Iowa Division of Labor's "Your Rights Under the Iowa Minimum Wage Law" poster (revised March 13, 2025) and the US Department of Labor's July 1, 2026 state and tipped wage tables. Iowa's rate only changes if the legislature acts or the federal rate rises. Confirm any exemption with the Iowa Department of Inspections, Appeals, and Licensing before paying below $7.25.
Current Iowa Minimum Wage
Iowa's minimum wage is $7.25 per hour. The Iowa Division of Labor poster states that "the minimum wage applies to most hourly wage earners employed in Iowa," and the US Department of Labor table lists Iowa at $7.25 with no scheduled change. Iowa reached $7.25 on January 1, 2008, six months ahead of the federal increase to the same figure, and has not moved since.
Because the state and federal rates are identical, the practical questions in Iowa are about coverage and the two sub-minimum rates, not the headline number. The state law excludes "most small retail and service establishments grossing less than $300,000 annually," but those businesses are usually still covered by the federal Fair Labor Standards Act through interstate commerce, which means $7.25 applies anyway. Supervisory and administrative employees paid a salary are largely outside the law if they meet the exemption tests.
Iowa Minimum Wage vs Federal Minimum Wage
| Measure | Iowa (2026) | Federal (2026) | Difference |
|---|---|---|---|
| Hourly minimum wage | $7.25 | $7.25 | $0.00 |
| Tipped cash wage | $4.35 | $2.13 | $2.22 |
| Maximum tip credit | $2.90 | $5.12 | $2.22 less |
| Sub-minimum for new hires | $6.35 for 90 calendar days | $4.25 for workers under 20 for 90 days | Iowa's is higher and not age-limited |
| Weekly pay at 40 hours | $290.00 | $290.00 | $0.00 |
| Annual pay at 2,080 hours | $15,080 | $15,080 | $0.00 |
| Last increase | January 1, 2008 | July 24, 2009 |
The tipped rule is the important difference. An Iowa restaurant cannot pay the federal $2.13; the state requires at least $4.35 in cash before tips.
Tipped Minimum Wage in Iowa
The Iowa poster is direct: for tipped employees who "customarily and regularly receive more than $30 per month in tips," the employer's share "must be at least $4.35 an hour." The DOL tipped table shows the same $4.35 cash wage and a maximum tip credit of $2.90. If tips do not bring the employee to $7.25 for every hour in the pay period, the employer pays the difference.
Two points trip up Iowa employers:
- The initial employment wage and the tip credit do not stack in the obvious way. The $6.35 rate is a lower minimum for the first 90 days, and the cash wage floor of $4.35 still applies to tipped workers. Confirm the combination with the Division of Labor rather than assuming a lower cash wage is allowed.
- Tip pools must exclude managers and supervisors under the federal rules that apply in Iowa.
Iowa Minimum Wage Increase Schedule
Iowa has no scheduled increase and does not index the rate. The only way the rate changes is by state legislation or a federal increase, which Iowa law would follow.
| Effective date | Rate | Basis |
|---|---|---|
| April 1, 2007 | $6.20 | State law |
| January 1, 2008 | $7.25 | State law |
| July 24, 2009 | $7.25 | Federal rate matched Iowa |
| 2010 to 2026 | $7.25 | No change |
Several Iowa counties, including Johnson, Linn, Polk, and Wapello, adopted local minimum wages in 2015 and 2016. The legislature preempted them in 2017 and rolled those rates back to $7.25, so the county ordinances have no effect today.
Local Minimum Wages in Iowa
None are enforceable. Iowa law bars cities and counties from setting a minimum wage above the state rate, a preemption enacted in 2017 after four counties had raised their rates. Employers in Iowa City, Cedar Rapids, and Des Moines pay the state $7.25 unless a higher rate applies through a federal contract or a collective bargaining agreement.
Employers with staff across the river in Illinois or across the border in Nebraska face very different floors: Illinois is at $15.00 and Nebraska at $15.00 in 2026, while Missouri is at $15.00 and Minnesota at $11.41. Workers who move between an Iowa location and an out-of-state location are paid on the rate where the work is performed.
Who Is Covered and Who Is Exempt
Iowa's minimum wage law covers most hourly employees. The main exclusions are:
- Retail and service establishments with gross annual sales under $300,000 (though federal coverage usually applies)
- Bona fide executive, administrative, and professional employees who meet the salary and duties tests
- Certain agricultural workers
- Some employees of seasonal recreational establishments
- Family members employed by a family business in limited cases
The Iowa labor law guide covers breaks, leave, and hiring rules alongside wages. For classification, see exempt vs non-exempt employees: at $7.25 an hour a full-time worker earns $15,080, far below the $35,568 federal salary threshold, so no minimum wage worker can be exempt.
Overtime and the Minimum Wage
Iowa has no state overtime law; the federal FLSA governs. Overtime is 1.5 times the regular rate after 40 hours in a workweek. A 45-hour week at $7.25 pays:
| Component | Hours | Rate | Pay |
|---|---|---|---|
| Regular | 40 | $7.25 | $290.00 |
| Overtime | 5 | $10.88 | $54.38 |
| Total | 45 | $344.38 |
For a tipped employee, overtime is calculated on the full $7.25, not the $4.35 cash wage. See overtime pay laws by state and the overtime calculator.
What a Minimum Wage Worker Earns in Iowa
| Period | Hours | At $7.25 | At $6.35 (first 90 days) |
|---|---|---|---|
| Week | 40 | $290.00 | $254.00 |
| Month | 173.33 | $1,256.64 | $1,100.65 |
| Year | 2,080 | $15,080 | $13,208 |
Gross figures before deductions. The salary to hourly calculator converts any rate; gross pay explains what is withheld.
Employer Compliance Checklist
- Pay at least $7.25 to every non-exempt employee, and $4.35 in cash to tipped employees.
- Limit the $6.35 initial employment wage to 90 calendar days with the same employer, and document the start date.
- Do not rely on the $300,000 exclusion unless you have confirmed the business is also outside federal FLSA coverage.
- Reconcile tips each pay period so cash wage plus tips reaches $7.25 per hour.
- Apply federal overtime after 40 hours with the premium based on $7.25.
- Post the Iowa minimum wage poster and keep hour records; a time card calculator works for small teams, automated tracking scales better.
For every other state's rate, see minimum wage by state.
Track Hours and Overtime Automatically
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Common Minimum Wage Mistakes in Iowa
Because Iowa's rate matches the federal one, employers tend to run federal defaults and miss the three places state law differs:
- Paying tipped employees $2.13. Iowa requires $4.35 in cash. Every hour at $2.13 is a $2.22 underpayment.
- Extending the $6.35 initial employment wage past 90 days. The limit is 90 calendar days with the same employer, not 90 working days and not 90 days per position.
- Restarting the 90-day clock on rehire or transfer. The Division of Labor treats the limit as a total with that employer. Get written guidance before paying $6.35 to a returning worker.
- Relying on the $300,000 small-business exclusion. Most small retailers still have federal coverage through interstate commerce and owe $7.25 under the FLSA.
- Treating repealed county rates as live. Johnson, Linn, Polk, and Wapello counties' ordinances were preempted in 2017. Paying them is allowed but not required.
- Calculating tipped overtime on $4.35. The overtime premium is based on $7.25.
Frequently Asked Questions
What is the minimum wage in Iowa in 2026?
$7.25 per hour, the same as the federal minimum wage.
Is Iowa raising its minimum wage?
No increase is scheduled and the rate is not indexed. It has been $7.25 since January 1, 2008.
What is the tipped minimum wage in Iowa?
$4.35 per hour in cash for employees who regularly receive more than $30 a month in tips, plus tips to reach $7.25.
What is Iowa's initial employment wage?
Employers may pay $6.35 per hour for an employee's first 90 calendar days with that employer. It is not limited by age, unlike the federal youth wage.
Can Des Moines or Iowa City set a higher minimum wage?
No. Iowa preempted local minimum wages in 2017.
How much is Iowa minimum wage per year?
$15,080 before taxes at 2,080 hours.
Are small businesses exempt from Iowa's minimum wage?
Retail and service businesses grossing under $300,000 a year are outside the state law, but most are still covered by the federal FLSA, which also requires $7.25.
Does Iowa require overtime after 8 hours a day?
No. Federal overtime applies: 1.5 times the regular rate after 40 hours in a workweek.