Iowa
In Iowa, commercial cleaning is subject to sales tax, and residential cleaning is exempt only when it is janitorial work in a private residence paid for by the person who lives there. Iowa has state income tax withholding, so payroll involves the Iowa Department of Revenue and Iowa Workforce Development. The minimum wage is $7.25 an hour, and Iowa has no local minimum wages.
Let's say half your week is houses and the other half is offices. In Iowa those two halves don't get the same sales tax treatment, and the dividing line depends on a detail your invoices may not record: who is paying for the house cleaning. Below I cover sales tax on cleaning, how Iowa decides whether a worker is an employee, the two payroll registrations, the minimum wage, and what all of it means for the way your books are set up.
Commercial cleaning is taxable in Iowa, and the state rate is 6 percent. Residential cleaning is conditional: the exemption covers janitorial services in a private residence, apartments and other multiple housing units included, when the occupant pays for them. Carpet cleaning, landlord-paid work, and exterior jobs each have their own wrinkle, and I lay those out on the Iowa sales tax on cleaning page. How any of it applies to your own contracts is a question for your CPA.
Source: Iowa Legislature, Iowa Code Section 423.2 (Iowa Code 2026)
For unemployment insurance, Iowa uses the common-law test, which turns on the right to control how the work gets done. The rule is in Iowa Code 96.1A(16)(a)(2), and 96.1A(16)(f)(1) adds a presumption that the work is employment unless the worker is free from control or direction. I walked through how each kind of worker shows up in the books in 1099 subcontractors vs. W-2 employees. Whether a particular cleaner is an employee is a legal question, so that call belongs with your CPA or an employment attorney.
Source: Iowa Legislature, Iowa Code Section 96.1A (Iowa Code 2026)
Iowa has state income tax withholding, so a cleaning company with employees deals with two state agencies, not one.
Source: Iowa Department of Revenue, Iowa Withholding Tax Information (last updated Nov 1, 2025)
Source: Iowa Department of Revenue, Business Permit Registration
Source: Iowa Workforce Development, Unemployment Insurance Systems
Which of these registrations your payroll provider, your CPA, or I handle gets settled in writing before the first payroll run. Filing questions go to your CPA.
Iowa's minimum wage is $7.25 an hour, in effect since January 1, 2008, and no change had been announced as of October 20, 2026. Iowa has no local minimum wages, so every Iowa crew starts from the same state rate.
Source: Iowa Legislature, Iowa Code Section 91D.1 (Iowa Code 2026)
Source: Iowa Legislature, Iowa Code Section 364.3(12)(a) (Iowa Code 2026)
Source: Iowa Legislature, Iowa Code Section 331.304(12)(a) (Iowa Code 2026)
Source: U.S. Department of Labor, Wage and Hour Division, State Minimum Wage Laws (updated July 1, 2026)
The Iowa rules ask your books a question a chart of accounts has to be set up to answer: who paid for this cleaning? Tracking residential sales tax here isn't just a checkbox on the invoice. It's knowing whether the occupant or someone else paid, it's knowing whether the visit was janitorial work or carpet cleaning, and it's keeping the tax you collected out of your income so it's never mistaken for money you earned.
Labor works the same way. When wages are booked at the rate you actually pay instead of a rough guess, the job profitability estimator gives you a real answer before you quote the next contract.
Rules checked against the sources above as of October 20, 2026. Rates and rules change; confirm current figures with the agency or your CPA.
About Figure Eight Financial
Figure Eight Financial is Dave Gordon’s bookkeeping practice for residential and commercial cleaning companies. I work with owners in Iowa and across the country, and I’m a Certified QuickBooks Online ProAdvisor.
Before bookkeeping I studied computer science at Penn State and spent a career at IBM as an engineer, so I build the books as a system: data comes in once, lands in the right place, and ties back to a statement. I’m a bookkeeper, not a CPA or Enrolled Agent. I keep the books your CPA works from, and the tax decisions stay with your CPA.
Credentials and memberships reported by Figure Eight Financial.
More about DaveHow I Help
Who paid for the house cleaning is a question your Iowa books need to answer, since the residential exemption depends on the occupant paying. I set up the chart of accounts so occupant-paid janitorial work, carpet cleaning, and commercial jobs land on separate lines, keep collected tax out of income, and record wages at the rate you actually pay. If houses and offices share one revenue line right now, grab a short call below.
The core service. Transactions recorded and categorized, every account reconciled so the books and the bank agree, and monthly reports that arrive explained, split by residential and commercial and sliceable per contract.
The full picture of how this works for a cleaning companyFor the months where nothing got entered at all. I fill in the missing periods from the ground up, pulling bank feeds, statements, and receipts until every month has a complete set of records.
How catch-up bookkeeping worksFor books that exist but can’t be trusted. I audit what’s there, fix the unreconciled accounts, duplicate transactions, and wrong categories, and tie every balance back to a statement.
How cleanup bookkeeping worksYour crews paid on time, every pay period, with each payroll run recorded in the books so labor shows up against the jobs it belongs to.
How payroll worksRecurring invoices that match your contracts, an aging report you can trust, and follow-up on slow payers handled by a process instead of your evenings. Built for net-60 commercial accounts.
How invoicing and receivables workA file built right for a cleaning company from day one, or rebuilt after the DIY version drifts, and then I teach you to run it. I’m a Certified QuickBooks Online ProAdvisor, and this is honestly my favorite part of the job.
How a proper setup worksWe start with a short call about your business and where the books stand. The first conversation doesn’t cost anything.
I take a look at what you’ve got, your QuickBooks file, your spreadsheet, whatever exists.
You get a written proposal with the price, so the decision is yours with the number in hand.
Let's Connect
If your Iowa books put houses and offices into one revenue line, send me a note. I'll go through them and tell you exactly what needs to change. The first conversation doesn't cost anything.
