Social Security Contributions
Written in plain language for general understanding. This is educational content, not legal advice. Based on Icelandic Acts of the Althingi, statutory instruments, and official guidance.
Icelandic National Law
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 should you do?
- 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.
Legal Resources
We may earn a commission if you use these services — at no extra cost to you. This supports our mission to make legal information free for everyone.