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Taxes in Iceland

Employer
11.50 %

Mandatory Pension Fund

2.00 %

Supplementary (optional) Pension Fund (the employee can elect to supplement their pension by either 2% or 4%, and the employer then is obliged to match this with 2% in either case)

6.10 %

Social security contribution (this contribution is calculation on the Gross pay + Mandatory Pension Fund + Supplementary Pension fund amounts)

1.55 %

Union fee

0.10 %

Rehabilitation Fund

10.17 %

Holiday Allowance - once annually (this value is a minimum 10.17% of annual gross pay and can go up to 13.04% of annual gross pay, depending on the employees tenure with the employer)

Employee
4 %

Pension fund contribution

Personal income tax rates

31.45% on the first ISK 4,188,216 ($34147.70)

37.95% on the next ISK 7,569,948 ($61719.92)

46.25% on any income over ISK 11,758,159 ($95867.58)

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