Grow Your Workforce in Iceland

Income Tax in Iceland

Income Tax in Iceland is progressive ranging from 31.48% to 46.28%

Social Security in Iceland

The social security contributions for employers and employees are as follows:

Employer Contributions

• Employers pay a general social security contribution (national insurance) of 6.35% on employee earnings.
• An additional 0.65% is payable for sailors.
• If an employee has a foreign A1 certificate, the social security contribution is 0.425%.
• Employers must contribute a minimum of 11.5% to mandatory pension funds.
• Employers are also obligated to make a 0.1% contribution to the Icelandic Rehabilitation Fund (VIRK).

Employee Contributions

• Employees must contribute a minimum of 4% of their monthly earnings to mandatory pension funds.
• Employees can choose to make additional voluntary pension contributions of up to 4%, in which case the employer is obligated to contribute an additional 2%.

Work Visas Iceland

The work visas available to legally work in Iceland include:

Temporary Work Permit for Experts

To work in Iceland as a foreign expert from outside the EEA, EFTA, or Faroe Islands, you must apply for a temporary work permit under these conditions:

• Expert Knowledge: You possess specialized skills and knowledge.
• Local Unavailability: The employer couldn't find a suitable candidate locally or within the EEA, EFTA, or Faroe Islands with equivalent qualifications.
• Critical Role: Your expertise is crucial for the employer's operations.
• Employment Contract: You have a signed contract with your prospective employer.

Long-term Remote Work Visa

• This visa allows individuals who work for foreign companies to live and work in Iceland for up to six months.
• This is aimed at digital nomads and requires proof of remote work and a minimum monthly income of ISK 1,000,000.

Residence Permit for Work

• This permit applies to employees who have a job offer in Iceland and fulfill specific conditions such as work requiring expert knowledge, labor shortages, or work based on service contracts or collaborations.

General Work Permits

• These are necessary for non-EEA/EFTA nationals who intend to work in Iceland. Employers must apply for these permits on behalf of the employees, and they need to be compliant with Icelandic labor laws.