As of 2001 India census, Iyyampalayam had a population of 12,131. Males constitute 50% of the population and females 50%. Iyyampalayam has an average literacy rate of 62%, higher than the national average of 59.5%; with 56% of the males and 44% of females literate. 11% of the population is under 6 years of age.Coconuts and Mangoes are the main production in this village. This village is located at the bottom of Kodaikanal. Marudanadi dam is very nearer to this village and through which around of lands gets irrigated. 