Examples on tax calculation – 2019

These examples show the amount of taxes payable on salary or pension income for a person resident in Iceland.

The calculation is relevant for you if you:

  • are resident in Iceland the whole year
  • are over 16 years of age, unmarried and do not have children that you support
  • have only salary or pension income from Iceland
  • do not pay church  tax (has no relevance for Iceland)

In this tax calculation we use the average income tax rate which is 36,94 and 46,24 percent of income in 2019, depending on the total income.

The tax calculation table below shows the tax for a person who has only salary, and pays 4 percent of the salary to a pension fund (compulsory). Note, fee in pension fund are not taxable until payout.

Salary per year

Deduction for fee in pension fund

Personal discount

Taxes

1.700.000

68.000

677.358

0

3.400.000

136.000

677.358

528.363

6.800.000

272.000

677.358

1.734.085

8.500.000

340.000

677.358

2.336.565

The tax calculation table below shows the tax for a person who has only pension (Pensioners does not pay fee in a pension fund).

Pension pr. Year

Deduction for fee in pension fund

Personal discount

Taxes

1.700.000

-

677.358

0

3.400.000

-

677.358

578.602

6.800.000

-

677.358

1.834.562

8.500.000

-

677.358

2.462.542

You may be entitled to other deduction that will have effect on the tax calculation. You may calculate your tax here