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Iceland (Icelandic) is an island nation in the North Atlantic. It is located between Greenland and Scotland and to the northwest of the Faroe Islands. It is a cold but fabulously beautiful country, located on an area of 103,000 square kilometers with a population of 376,248 inhabitants. The capital and largest city of Iceland is Reykjavik, which (along with the surrounding areas) is home to more than 65% of the population.
The interior of the country is occupied by high mountains, glaciers, geysers and volcanoes. The island also has many hot mineral springs that are used for heating in the capital Reykjavik.
Iceland is the largest island in the world that arose entirely as a result of volcanic activity, as well as the surrounding islets.
The official language of the island is Icelandic, which is as close as possible to Old Norse, with 90% of the local population fluent in English.
The national currency of the country is the Icelandic krone (ISK).
Iceland’s economy is built on the Scandinavian model and is one of the most developed in the modern world. Iceland’s salary level is one of the highest in Europe. The unemployment rate in Iceland is very low at 3.6%.
In today’s episode I will introduce you to the minimum and average incomes, the variety of professions and the way wages are distributed. We will also look at income and cost of living taxes in Iceland.
Minimum wage
There is no national minimum wage in Iceland. This indicator is established through negotiations between the employer and the employee and is fixed in the employment contract. In addition, many sectors of the economy have special collective agreements and specific rates that apply automatically to all employees. In general, the minimum wage depends on the region, occupation, length of service, age and level of qualification of the employee.
Examples of the minimum monthly wage before tax in Iceland in 2024 that look like this:
Fish processing – 408 614 ISK / EUR 2 726
Total work in restaurants and catering system – 408 614 CZK / 2 726 euro
Cleaning – 410 984 ISK / 2 742 euro
Construction work – 410 984 ISK / 2 742 euro
Machine operator – 423 041 ISK / 2 823 euro
Cook, waiter, butcher – 472 653 ISK / 3 154 euro
Qualified sellers – 536 256 ISK / 3 578 euro
Overall, assuming full employment of 171 working hours per month for an employee over the age of 18 who has worked for at least six months in a company, i.e. a minimum of 900 hours, the minimum wage in Iceland in 2024 is 368,000 kroner per month, equivalent to 2,455 euros.
Average salary
According to official information from the local statistical offices, the average salary before tax in Iceland in 2024 is 770,000 Icelandic kroner. At the current exchange rate, this corresponds to EUR 5 135. The gender pay gap is 18%, and public and private sector wages for local workers are practically the same.
Salaries by professions on a monthly basis, on which I have used the most extensive information:
Directors and managers – 1 709 000 ISK / 11 435 euro
Judges – 1 294 000 ISK / 8 655 euro
High-ranking civil servants – 1 219 000 ISK / 8 155 euro
Lawyers – 939 000 ISK / 6280 euro
Programmers, doctors – 922 000 ISK / 6170 euro
Air traffic controllers – 921 000 ISK / 6160 euro
Architects, engineers – 902 000 ISK / 6035 euro
University teachers – 830 000 ISK / 5 555 euro
Medical workers – 780 000 ISK / 5 220 euro
Physicists, chemists and related specialists – 708 000 ISK / 4735 euro
Accountants – 648 000 ISK / 4335 euro
Builders – 581 000 ISK / 3885 euro
Cooks – 536 000 ISK / 3585 euro
Butchers – 501 000 ISK / 3350 euro
Police officers – 482 000 ISK / 3 225 euro
Shop assistants – 460 000 ISK / 3 075 euro
Couriers, loaders – 440 000 ISK / 2 945 euro
Drivers – 424 000 ISK / 2 835 euro
Waiters, bartenders – 408 000 ISK / 2 730 euro
Utilities, Garbage collectors – 396 000 ISK / 2 650 euro
The information on average wages is based on current data from the National Statistical Institute of Iceland.
Income taxes
Profit of individuals is the basis for taxing net profit at a progressive rate of state income tax and municipal tax
The Icelandic Tax and Customs Administration publishes the basic rates and amounts for 2024. This includes the following monthly amounts and rates:
income up to 409,986 ISK per month / 2,735 euro – 31.45%,
income from 409,987 ISK per month to 1,151,012 / 2,735 to 7,679 euro – 37.95%,
income over 1,151,012 ISK per month / 7,679 euro – 46.25%.
The above rates include the average municipal tax rate of 14.45%, which is applied in 2024 for the purposes of withholding by the employer.
Cost of living
If you are considering moving to Iceland, the various costs listed below will help you make an informed decision about the costs associated with moving and living in that part of the world.
Housing costs
In recent years, Iceland has experienced a boom in housing. The country’s population is increasing and the number of people moving to Iceland is also increasing, as a result of which the demand for housing has increased dramatically and their prices have risen.
One-bedroom apartment outside the city center: 100,000 – 210,000 ISK / 667 – 1,400 euro
Expenditure on food, groceries and restaurants
Cheap restaurant: 1 650 – 4 910 ISK / 11 – 32 euro
Bottle of Coca-Cola: 200 – 500 ISK / 1.30 – 3.30 euro
1L milk: 161 – 245 ISK / 1 – 1.60 euro
Bread: 280 – 800 ISK / 1,85 – 5,30 euro
12 eggs: 562 – 1 140 ISK / 3,75 – 7,60 euro
1 kg chicken: 1 800 – 2 798 ISK / 12 – 18.60 euro
1 kg of beef: 2 000 – 4 699 ISK /13,30 – 31,30 euro
1 kg of apples: 250 – 800 ISK / 1.65 – 5.30 euro
1 kg white rice: 200 – 920 ISK / 1.30 – 6.15 euro
Transport
People in Iceland rely on buses, planes and ferries to move around the country. The public bus system is extensive and covers most of the country.
one-time ticket – 450 – 550 ISK / 3 – 3.65 euro
one-day ticket – 940 ISK / 6.20 euro
monthly pass – 13 300 ISK / 89 euro
Internet
7 490 – 8 990 ISK per month / 50 – 60 euro
Expenses for clothing, personal belongings, fitness and leisure
Here I will list some prices of clothes, as well as other useful prices:
Pair of jeans: 10 000 – 20 000 ISK / 66 – 133 euro
Summer dress: 3 700 – 13 000 ISK / 25 – 86 euro
Маратонки: 12 000 – 25 000 ISK / 80 – 166 euro
Business shoes: 15 000 – 33 000 ISK / 100 – 220 euro
Short visit to the doctor (15 minutes): 5,936 ISK / 40 euro
Deodorant: 621 ISK / 4 euro
Shampoo: 742 ISK / 5 euro
Toilet paper (4 rolls): 528 ISK / 3.5 euro
Gym membership: 6,600 – 14,500 ISK per month / 44 – 96 euro
Cinema ticket: 1 400 – 2 400 ISK / 9.30 – 16 euro