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IS Tax 2021

Iceland Tax Tables 2021 - Tax Rates and Thresholds in Iceland

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This page contains the tax table information used for the calculation of tax and payroll deductions in Iceland in 2021. These tax tables are used for the tax and payroll calculators published on iCalculator™ IS, these tools are provided for your free use on our website. If you would like additional tax table information added to the tax calculators for Iceland or would like to add to or suggest amendments to the information herein then please contact us.

Iceland Personal Income Tax Tables in 2021

The Income tax rates and personal allowances in Iceland are updated annually with new tax tables published for Resident and Non-resident taxpayers. The Tax tables below include the tax rates, thresholds and allowances included in the Iceland Tax Calculator 2021.

Iceland Residents Income Tax Tables in 2021
Personal Income Tax Rates and Thresholds (Annual)
Tax RateTaxable Income Threshold
31.45%Income from kr. 0.000.00to kr. 4,188,211.00
37.95%Income from kr. 4,188,211.01 to kr. 7,569,948.00
46.25%Income from kr. 7,569,948.01 and above
Iceland Non-residents Income Tax Tables in 2021
Personal Income Tax Rates and Thresholds (Annual)
Tax RateTaxable Income Threshold
31.45%Income from kr. 0.000.00to kr. 4,188,211.00
37.95%Income from kr. 4,188,211.01 to kr. 7,569,948.00
46.25%Income from kr. 7,569,948.01 and above

In Iceland, social security deductions made by employees are typically deductible when calculating taxable income. This means that the contributions employees make towards the social security system are subtracted from their gross income before the computation of income tax. Consequently, these deductions effectively reduce the taxable income of employees, potentially lowering their overall income tax liability. This approach is in line with Iceland's tax system, providing tax relief to employees by acknowledging their mandatory contributions to social security programs.

Iceland Social Security and Payroll Deduction Rates in 2021

In Iceland, both employees and employers contribute to the social security system, which provides a range of benefits and support. The main elements of these contributions include pension funds, healthcare, and unemployment insurance.

Iceland Social Security in 2021: Rates for Employers and Employees
CategoryEmployeeEmployerTotal
General Social Security Contribution0%6.35%6.35%
Icelandic Rehabilitation Fund (VIRK)0%0.1%0.1%
Mandatory Occupational Pension4%11.5%15.5%
Elderly Fund Contributions100%0%100%
Iceland Social Security and Payroll Deduction in 2021: Earnings Thresholds for Employers and Employees
CategoryEmployeeEmployer
Min.Max.Min.Max.
General Social Security Contributionn/an/an/an/a
Icelandic Rehabilitation Fund (VIRK)n/an/an/an/a
Mandatory Occupational Pensionn/an/an/an/a
Elderly Fund Contributionsn/akr. 13,284.00n/an/a

Iceland VAT Rates in 2021

VAT rates for Iceland are reviewed annually, you can use the VAT Calculator to calculate VAT due in Iceland or use the Reverse VAT Calculator to calculate the net cost of goods/services after deducting VAT.

Iceland VAT Rates
VAT RateVAT Description
0%VAT Exempt
0%Zero Rated
11%Reduced Rate
24%Standard Rate

Historic Tax Tables supported for Iceland

The following tax tables are supported by iCalculator™ IS as part of the suite of free tax tools we provide for Iceland.