Key rates and amounts 2020

Individuals: Withholding tax

Income from 0 – 336.916 ISK per. month
35,04%
Income from 336.917 - 945.873 ISK per. month   37,19% 
Income exceeding 945.873 ISK per month
(only on the amount that exceeds the income threshold)

46,24%
Children (born 2005 or later) on income exceeding 180.000 ISK per year
6%
Personal tax credit per month ISK 54.628
Personal tax credit per year ISK 655.538

A list of municipal tax rates is available on the website of Icelandic Association of Local Authorities (only available in Icelandic).

More information regarding tax liability

More information on personal tax credit

Value added tax (VAT)


Standard rate Reduced rate
VAT rates 24% 11%
VAT calculated from total price
(price includes VAT)
19,35% 9,91%

Payroll tax

Capital gains tax

Icelandic National Broadcasting Service fee (útvarpsgjald)

The Senior Citizen's Construction Fund fee

Per diem payments for domestic travel

Per diem payments for international travel

Car allowance

Lodging tax