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18.6.2019 : 17:47 : +0000

Working in Iceland

When you have gotten the job and arrived in Iceland... -there is a bunch of things to do like register for kennitala, pay taxes (hurray!!), choose a pension fund and a trade union and more.


But, don't worry! We will help you with that.



Every person living in Iceland has an identity number (kennitala).  Without it you can't open a bank account, rent a DVD or get a doctor's appointment.  The National Registry (Thjodskra) assigns you an Icelandic identity number. You can register for an identity number at the National Registry, the town hall or at the police commissioner's office.  


If you intend to stay for longer than three months, you must also transfer your legal domicile to Iceland.


Ninukot will advice you how to register for a identity number (kennitala). 


Residence and work permit

If you are from the Nordic countries and the European Economic Area you can work in Iceland without a special work permit. However, due to difference in the international treaties there is a slight difference between the rules regarding Nordic citizens and citizens from other EEA countries.

  • Nordic citizens: Nordic citizens can move to Iceland without any hindrance. If your employment is for shorter period of time than six months, you can stay in Iceland without ever transfering your legal domicile. However, you must register with The National Registry to receive an Icelandic identity number (kennitala). For more information about moving to Iceland from a Nordic country check out the website HalloNorden.  If you intend to stay for longer than six months you must notify the National Registry or go to the next public office. They will then transfer your legal domicile to Iceland. 
  • EEA citizens: Citizens from the European Economic Area can also move to Iceland without any hindrance.  When employed through Ninukot you will have acquired the right to a residence permit which the Nationial Registry issues. 



All individuals that reside in Iceland are subject to having their income taxed.  To receive your personal tax credit against the computed income tax, you must have a tax card from the Internal Revenue Directorate (Rikisskattstjori). People that have registered for a kennitala and will be staying for more than three months will be sent a tax card shortly after receiving an identity number (kennitala).


2010: The rate of the income tax is 37,22%, and the personal tax credit is 44.205 ISK per month. 


Labour market

The Icelandic labour market is governed both by laws and wage agreements between employers and employees' organisations.

  • Trade unions: Trade unions play an important role in safeguarding the interests of workers, provide information on wage rates and other right established in wage agreements.  Many of them have also expanded their activity to include educational activity, rental of vacation houses to members and more.
  • Union fees: Union fees are determined by the trade unions and are usually 1-2% of the worker's wages.  The employer also pays into sickness benefit funds and holiday allowance funds of the trade unions as is specified in the wage agreements. All participants in Ninukot's programs should become member's of their local union.
  • Pension fund: All workers in Iceland must pay into a pension fund, which pays retirement and disability pensions.  The employer will also make an contribution on behalf of the worker and is responsible for deducting the worker's payments to the pension fund. In 2010, according to most wage agreements employee's contribution to a pension fund was 4% and the employer's contribution is 8% of the wages.  
  • Holiday: All employees in Iceland have a right to a holiday.  If you work for the same employer for a year, you will have the minimum right to a 24 days holiday, or a certain percentage of your wages in lieu. For farm work the percentage is 10,17% of the wages.
  • Christmas and vacation premium: Wage agreements also include a Christmas (payable in December) and vacation premium (payable from 1 May to 15 August) on top of ordinary holiday allowance.  Those who work a part of the year receive these premiums proportionally.

<media 592 - download>For more information of basic rights and obligations of workers in Iceland.</media>