Social Security Contributions in Iceland
Reviewed by the Commoner Law Editorial Team. Sourced from Icelandic Acts of the Althingi, statutory instruments, and official guidance. Written in plain language for general understanding — this is educational content, not legal advice. Our editorial standards
What is this right?
Iceland has mandatory social insurance and pension contributions:
Employer social insurance contribution (tryggingagjald):
- General rate: approximately 6.35–6.90% of gross wages — paid entirely by the employer. The exact rate varies by year and may include additional levies; check the current rate at skatturinn.is.
- Additional rate for fishermen: +0.65%.
- This is not deducted from your wages.
Mandatory pension contributions:
- Total minimum: 15.5% — employer 11.5% + employee 4%.
- The employee's 4% is tax-deductible.
- Employees can make additional voluntary contributions of up to 4%.
- Applies to all employees aged 16–70.
Other mandatory levies:
- Elderly fund (Framkvæmdasjóður aldraðra): ISK 14,614 (ages 16–69).
- Broadcasting fee (Útvarsgjald): ISK 22,200 (ages 16–69, if annual income exceeds ISK 2,617,618).
When does it apply?
- You are an employee aged 16–70 in Iceland.
- Your employer must pay the social insurance contribution on your behalf.
What to Do If Your Employer Is Not Making Correct Pension Contributions in Iceland
- Check your payslip — verify that the 4% pension contribution is being deducted and that your employer is matching with 11.5%.
- Consider making additional voluntary contributions — up to 4% extra, which your employer may match (depending on collective agreement).
What should you NOT do?
- Don't opt out of mandatory pension contributions — they are legally required.
- Don't confuse the employer's contribution with yours — the 6.35% social insurance and 11.5% pension are employer costs, not deducted from your pay.
Common Questions
What pension contributions are mandatory in Iceland?
The total minimum pension contribution is 15.5% — your employer pays 11.5% and you pay 4%. The employee 4% is tax-deductible. You can make additional voluntary contributions of up to 4%, which some employers match depending on the collective agreement. Mandatory contributions apply to all employees aged 16 to 70.
What is the Icelandic tryggingagjald employer contribution?
Tryggingagjald is the employer social insurance contribution — approximately 6.35 to 6.90% of gross wages, paid entirely by the employer. An additional 0.65% rate applies for fishermen. This is not deducted from your pay. Check the current rate at skatturinn.is. It funds pensions, health insurance, and unemployment benefits under Lög nr. 113/1990.
How do I check my employer is paying Icelandic pension correctly?
Review your payslip: verify the 4% pension contribution is being deducted from your wage and that your employer is contributing 11.5% on top. The 6.35% tryggingagjald and 11.5% employer pension are employer costs, not deductions from your pay. Do not opt out of mandatory pension — it is legally required.
When does it apply — social security contributions?
You are an employee aged 16–70 in Iceland.Your employer must pay the social insurance contribution on your behalf.
What should I do if I think my employer is not paying the correct pension contributions for me in Iceland?
Check your payslip — verify that the 4% pension contribution is being deducted and that your employer is matching with 11.5%.Consider making additional voluntary contributions — up to 4% extra, which your employer may match (depending on collective agreement).
What should you NOT do — social security contributions?
Don't opt out of mandatory pension contributions — they are legally required.Don't confuse the employer's contribution with yours — the 6.35% social insurance and 11.5% pension are employer costs, not deducted from your pay.