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Take-home pay in Iceland (ISK)
| Salary level | Gross / year | Net / year | Net / month | Tax + employee SSC |
|---|---|---|---|---|
| 67% of AW | 8,330,463 | 6,116,134 | 509,678 | 26.6% |
| 100% of AW | 12,433,527 | 8,558,463 | 713,205 | 31.2% |
| 167% of AW | 20,763,990 | 13,183,031 | 1,098,586 | 36.5% |
Worked example
A single worker without children earning the average wage of 12,433,527 ISK pays 27.1% in income tax and 0.1% in employee social security contributions, plus 4.0% in mandatory mandatory occupational pension that the OECD counts separately, keeping 8,558,463 ISK a year (713,205 ISK a month). At 167% of the average wage the combined rate is 32.5%.
A one-earner married couple with two children at the average wage keeps 10,680,362 ISK after taxes and cash family benefits (before mandatory non-tax payments), according to the same OECD model.
The full tax wedge (all taxes as a share of labour cost) at the average wage is 31.5%, ranked #28 of 38; the OECD average is 35.1%.
Sources: OECD Taxing Wages 2025, comparative indicators (single worker, no children; average wage as defined by the OECD for each country) and OECD, Non-tax compulsory payments as an additional burden on labour income in 2025 (Tables 5 and 6) for mandatory pension and insurance payments that are not classed as taxes, such as Australian superannuation. Model estimates: voluntary benefits, local caps and sector-specific schemes are not included.
Frequently asked questions
What is the average take-home pay in Iceland?
8,558,463 ISK a year for a single worker at the average wage (OECD 2025).
How much tax do you pay in Iceland?
About 27.2% of gross pay in income tax and employee contributions at the average wage.