The Real Take-Home Pay: An Iowa City, IA Salary Guide ($100k Analysis)

In Iowa City, the "sticker price" of a salary is a lie. The difference between what you earn and what you can actually spend defines your lifestyle. We’ve crunched the numbers on a $100,000 salary to show you exactly where your money goes—and why Iowa City punches well above its weight class.

The Verification Test ($100,000 Analysis)

Let’s run the verification test on a gross salary of $100,000. This is the "Sticker Price"—the number HR puts on your offer letter. But in the real world, the government gets its cut first.

Here is the brutal breakdown of your deductions:

• Gross Salary: $100,000
• Federal Tax: -$13,614
• FICA Tax: -$7,650
• State Tax (IA): -$4,500
• Local Tax: $0

The Result:
Your actual Take Home Pay is $74,236.

You are losing 25.8% of your gross income to taxes right off the bat. That is a $25,764 annual haircut before you pay a single bill.

However, the absence of a Local Tax is a significant variable. In cities with local income taxes, that number would be a recurring monthly sting. In Iowa City, that is $0 kept in your pocket.

Smart Budget Breakdown (50/30/20 Rule)

With a net annual income of $74,236, your monthly take-home pay is $6,186. We apply the 50/30/20 rule to determine your purchasing power.

Needs: $3,093/month

This bucket covers the essentials: rent, utilities, groceries, and insurance.

• The Rent Reality: In Iowa City, $3,093 is luxury territory. The median rent for a one-bedroom apartment hovers around $1,100 - $1,300.
• Purchasing Power: After paying rent, you have roughly $1,800 left for utilities, car payments, and food. You can live comfortably without roommates and still have significant cushion in the "Needs" category.

Wants: $1,856/month

This is your discretionary spending—dining out, entertainment, subscriptions, and travel.

• With nearly $1,900 purely for fun, a $100k salary in Iowa City provides a lifestyle that would require double the income in coastal metros. You can afford the higher-end restaurants in the Ped Mall, concert tickets, and weekend trips without anxiety.

Savings: $1,237/month

This is where wealth is built.

• Wealth Creation: Saving $1,237 monthly is a powerful position. Over a year, that is $14,844 in pure investments.
• If you invest this in a standard index fund returning 7% annually, you are generating passive income that compounds. In Iowa City, a $100k salary allows you to save aggressively while maintaining a high standard of living—a combination that is nearly impossible in major coastal hubs.

Iowa City Taxes vs The Competition

To understand the value of the Iowa City tax structure, you have to compare it to the heavy hitters.

Scenario: $100,000 Salary

• New York City (NYC):

  • The Tax Burden: NYC has a "triple whammy"—Federal, State (NY), and City taxes.
  • The Damage: Your take-home pay drops to roughly $64,000.
  • Comparison: You lose an additional $10,000+ annually just for living within city limits. In Iowa City, you keep that $10k.

• Austin, Texas:

  • The Tax Burden: No State Income Tax, but high Property Taxes.
  • The Damage: Take-home is roughly $76,000.
  • Comparison: Iowa City is very competitive with Austin. While Austin residents save on income tax, they pay significantly higher housing costs. Iowa City offers a similar net income with much lower housing volatility.

The Verdict: Iowa City offers a tax burden that is significantly lower than the national average for metro areas, specifically due to the lack of local city taxes and manageable state rates compared to New York or California.

Frequently Asked Questions (FAQ)

Q: What is the income tax rate in Iowa City?
A: Iowa City residents pay Federal tax, FICA (7.65%), and Iowa State tax. The effective state tax rate for a $100k earner is approximately 4.5%. Crucially, there is 0% Local City Tax.

Q: Is $100k a good salary in Iowa City?
A: Yes. A $100k salary translates to a $6,186 monthly net take-home pay. After covering a high-end rent ($1,400), you are left with over $4,700 for bills, fun, and investing. It places you in the top tier of earners in Johnson County.

Q: Does Iowa City have a local city tax?
A: No. Based on current data, Iowa City does not levy a local income tax on residents.

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Methodology: Calculations based on 2026 IRS tax brackets (estimates), Social Security (6.2%), and Medicare (1.45%). State tax data sourced from the Iowa Department of Revenue. Cost of living data cross-referenced with Bureau of Labor Statistics (BLS) Consumer Expenditure Surveys.