The individual income tax ranges from 31.45% to 46.25%. Income tax is calculated according to progressive rates. Multiple additional factors may impact overall rates such as the household status and the number of children.
Gross Annual Income | Tax Rate (%) |
---|---|
0 Up to ISK 349,018 | 31.45% |
349,019 Up to ISK 979,847 | 37.95% |
Over ISK 979,847 | 46.25% |
The employer cost is approximately 22.07% of the employee's salary.
Standard working hours are 8 hours per day, 40 hours per week. The standard workweek is from Monday to Friday.
Overtime payment is mandatory and cannot be included in the salary. Hours outside of standard work hours are considered overtime. Employees can work a maximum of 162.5 hours of overtime a month. For additional hours, employees are paid:
Overtime payment is not mandatory for managerial roles in Iceland.