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The Active Population in Figures

Working Conditions

Legal Weekly Duration

40 hours

Retirement Age

The retirement age is not the same for all pension funds, but most aim at 67 years.

Working Contracts

The work contract is defined by the law. Collective agreements and individual negotiation complete it.
The work contract is rather formal.

Labour Laws

Consult Doing Business Website, to obtain a summary of the labor regulations that apply to local entreprises.

Cost of Labour

Minimum Wage

There is no statutory national minimum wage in Iceland; instead, pay floors are established through collective bargaining agreements, with a typical minimum for full-time entry-level workers as of 2026 being approximately ISK 513,000-515,000 per month (approx. EUR 3,500-3,550).

Average Wage

The average salary in Iceland is 758,000 Icelandic Krona (ISK), about USD 5,493.

Social Contributions

Social Security Contributions Paid By Employers: 6%
Social Security Contributions Paid By Employees: 4%

Social Partners

Employer Associations

SI - Federation of Icelandic Industries
SA - Confederation of Icelandic Employers
SVTH - Federation of Trade & Services

Social Dialogue and Involvement of Social Partners

The Icelandic Federation of Labor can be mentioned.

Labour Unions

List of all Icelandic Unions

Unionisation Rate

Icelandic workers are among the most unionized in the world with more than 85% of them belonging to a union.

Labour Regulation Bodies

Ministry of Social Affairs
Confederation of Icelandic Employers