Key rates and amounts 2023

Individuals: Withholding tax 2023

Income from 0 – 409,986 ISK per. month 31.45%
Income from 409,987 - 1,151,012 ISK per. month 37.95%
Income exceeding 1,151,012 ISK per month
(only on the amount that exceeds the income threshold)
46.25%
Children (born 2007 or later) on income exceeding 180,000 ISK per year 6%
Personal tax credit per monthISK59,665
Personal tax credit per yearISK715,981

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

More information on tax brackets

Value added tax (VAT)

Standard rateReduced rate
VAT rates24%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