Social security
National Insurance is financed by the State Treasury. Individuals do not pay a separate premium for National Insurance, but employers pay a business tax on all paid wages.
An individual is generally ensured where he is domiciled. When someone resides in another Nordic country while working, the insurance is transferred there. Manpower sent abroad is always insured in the home country. They are required to carry certificate E101 with them.
The business tax is paid in the country where the wage earner is insured.
In Iceland the following fees are paid into National Insurance:
The business tax that the wage payer pays is 5.34% of paid wages. The business tax finances annuity insurance, unemployment insurance and the maternity leave fund.
The statutorily required premiums for annuity funds are financed from wages, and a wage payer pays contributions of 8% of gross wages, while a wage earner pays 4%, which is deducted from his wages when they are paid. It is possible to negotiate higher payments.