Iceland tax guide
Planning reference for Iceland using ISK salary values.
This is not an official government calculation. Confirm final details with Iceland Revenue and Customs or a qualified tax professional.
Model coverage
A source-reviewed simplified salary model is available in the calculator.
Scope: Iceland-resident employee aged 16 to 69 for all of 2026, using the 14.94% withholding municipal rate and full personal tax credit. Municipality-specific final rates and optional pension contributions are excluded.
Reference details
| Currency | ISK |
|---|---|
| National tax label | State and Municipal Income Tax |
| Personal allowance | Not modeled |
| Employee contributions | Includes the deductible 4% employee pension contribution and the fixed 2026 elderly-fund and National Broadcasting Service charges. |
| Last source review | 2026-07-23 |
Modeled national brackets
| Band | Rate | Reference threshold |
|---|---|---|
| 1 | 31.5% | Up to 5,977,464 ISK |
| 2 | 38.0% | Up to 16,781,400 ISK |
| 3 | 46.3% | Top bracket and above |
Official source
Tax rules, thresholds, allowances, and contribution limits can change. Use the official source above to verify the current rules before making a financial decision.