Average Salary in Iceland (2026 Data)

Measured in purchasing power, Iceland pays the highest average wage in the OECD: $100,605¹ a year in 2025, ahead of Luxembourg and Switzerland. In krónur, full-time employees earned an average of ISK 1,058,000² a month in 2025, which is $8,242³ at the Central Bank's average exchange rate for the year.⁴ That average hides a wide spread: 64% of employees earn less, a doctor earns about 3.4 times³ as much as a child-care worker, and income tax and pension contributions take about 29.4%³ of a median pay slip.

This report brings together Statistics Iceland's earnings survey and tax-register income data, the 2026 tax rates, collective agreements and OECD and World Bank comparisons. It shows the average and median salary, pay in 26 common jobs, the gender pay gap, what is left after tax, the lowest agreed wages and how Iceland compares with other rich countries.

What the average salary in Iceland includes

Statistics Iceland's earnings survey covers a little under 100,000 employees and publishes several averages, so it matters which one is quoted.² In 2025, full-time employees earned an average of $8,242³ a month (ISK 1,058,000) in total earnings, and a median of $7,385³ (ISK 948,000). Total earnings include overtime and every other payment.

Regular earnings, which leave out overtime, averaged ISK 913,000² ($7,112), and basic earnings had a median of ISK 757,000². Statistics Iceland's headline figure, ISK 816,000² of regular earnings, is lower again because it includes part-time employees counted as if they worked full time.

Men averaged ISK 1,139,000² ($8,873) in total earnings and women ISK 974,000² ($7,587). Full-time employees were paid for 173.4 hours² a month on average, down from 184 hours² in 2014.

In krónur, the average rose 87.9%³ between 2014 and 2025, from ISK 563,000 to ISK 1,058,000. In dollars the rise was smaller, 70.9%³, and less steady: the dollar value fell from $6,699³ in 2018 to $5,862³ in 2020 while krónur pay kept rising, because the króna weakened.⁴

Average annual salary in Iceland

Twelve months at the 2025 average come to $98,902³ (ISK 12.7 million), and twelve months at the median to $88,619³. The OECD's Taxing Wages report puts the average wage in Iceland at ISK 12.4 million⁵ a year in 2025. Collective agreements add fixed bonuses on top of monthly pay: in 2026, retail and office staff under the LÍV–SA agreement receive a holiday bonus of ISK 62,000⁶ and a December bonus of ISK 114,000⁶.

Average hourly wage in Iceland

Dividing average total earnings by average paid hours gives ISK 6,101³ an hour in 2025, or $47.53³. Because doctors are paid for more hours, the gap between jobs is a little narrower per hour: pay works out at ISK 11,452³ for doctors and ISK 3,935³ for child-care workers. The agreed daytime rate for a new adult retail worker is ISK 2,868⁶ an hour in 2026.

How pay is spread

Averages are pulled up by high earners. In 2025, 64%² of full-time employees earned less than the average of total earnings. The lowest-paid tenth earned under ISK 640,000² ($4,986) a month and the best-paid tenth over ISK 1,551,000² ($12,082). The middle half of employees earned between ISK 772,000² and ISK 1,193,000².

Iceland median income

Tax returns give a wider view than the earnings survey, because they include everyone with income, such as part-time workers, pensioners and students, not only full-time employees. The median total income in 2025 was ISK 8,754,000⁷ a year ($68,194), against a mean of ISK 10,542,000⁷ ($82,122). Among people aged 25–64 with income from work, the median income from work was ISK 9,803,000⁷, the lowest tenth received under ISK 3,662,000⁷ and the top 1% over ISK 34,049,000⁷.

How much do jobs pay in Iceland?

Managers top the occupational groups with ISK 1,634,000² ($12,729) a month on average, followed by technicians and associate professionals at ISK 1,154,000² and professionals at ISK 1,131,000². Elementary occupations average ISK 766,000². Craft and trades workers earn ISK 1,088,000², close to professionals, and are paid for more hours: 182.4 hours² a month against 169.8 for managers.

Among the 26 common jobs in this report, directors and chief executives earn the most, ISK 2,535,000² ($19,748) a month, and child-care workers the least, ISK 641,000² ($4,993). Child-care workers also saw the fastest pay growth of the jobs listed: their average earnings rose 102%³ between 2015 and 2025, against 65%³ for chief executives. How much do lawyers make in Iceland? Legal professionals average ISK 1,358,000² ($10,579) a month, and accountants ISK 1,180,000².

By industry, electricity and heat supply pays the most, ISK 1,402,000² ($10,922) a month, followed by finance and insurance at ISK 1,372,000². Accommodation and food services pays the least at ISK 859,000², even though its employees are paid for 186.3 hours² a month. Education is second lowest at ISK 907,000².

Central government employees earn the most on average, ISK 1,142,000², ahead of the private sector at ISK 1,089,000². Municipal employees average ISK 909,000². The public sector matters more for women: about 40%² of employed women work in it, against 17%² of men.

How much do doctors make in Iceland?

Medical doctors earn ISK 2,169,000² a month on average, or $16,896³, with a median of ISK 1,993,000². That pay comes with long hours: doctors are paid for 189.4 hours² a month, against 173.4 for all full-time employees. The median for male doctors was ISK 2,320,000² and for female doctors ISK 1,747,000².

How much do nurses make in Iceland?

Nurses and midwives earn ISK 1,217,000² ($9,480) a month on average, with a median of ISK 1,179,000². Their pay has risen faster than in most of the jobs listed: the average was ISK 659,000² in 2015, an increase of 85%³ in ten years.

How much do teachers make in Iceland?

It depends on the school. University teachers average ISK 1,276,000² a month, upper secondary teachers ISK 1,154,000² ($8,990), primary school teachers ISK 919,000² ($7,159) and preschool teachers ISK 890,000². Secondary teachers are paid for 199.5 hours² a month, the most of any teaching group, and preschool teachers' pay has doubled since 2015, up 100%³.

How much do electricians make in Iceland?

Building electricians earn ISK 1,098,000² ($8,553) a month on average, and electrical and electronic mechanics and fitters ISK 1,188,000². Electrical engineers average ISK 1,341,000² ($10,446).

Iceland gender pay gap percentage

Statistics Iceland measures the unadjusted gender pay gap as the difference between men's and women's average hourly earnings, without adjusting for job, hours or experience.⁸ The gap was 10.4%⁸ in 2024, up from 8.6%⁸ in 2022 but about half the 20.5%⁸ of 2008. In this measure, men earned ISK 4,990⁸ an hour and women ISK 4,480⁸.

The gap is widest in finance and insurance, 26.1%⁸, and among technicians and associate professionals, 24.8%⁸. It is small in health and social work, 3.0%⁸, and reversed among clerks, where women earn 5.2%⁸ more per hour than men. It also widens with age up to 64: 0.7%⁸ for employees aged 24 and younger, 16.7%⁸ for those aged 55 to 64. The private sector gap, 15.2%⁸, is about twice the public sector's.

Pay in a job is only part of the story. Tax registers show what people actually receive over a whole year.

Average income in Iceland

Statistics Iceland's income statistics come from tax returns and count all income, including pensions, benefits and capital income. In 2025 the mean total income per person was ISK 10,542,000⁷ ($82,122), about ISK 878,500³ a month. It rose 5.7%⁷ from 2024, or 1.6%⁷ after inflation. Income from work averaged ISK 7,150,000⁷ a year. After taxes and pension contributions, mean disposable income was ISK 7,821,000⁷, and the median ISK 6,698,000⁷.

Men's mean total income was ISK 11,549,000⁷ and women's ISK 9,522,000⁷. Income from work climbs until the early fifties: among people with such income, it peaks at ISK 12,184,000⁷ a year at ages 50–54, where men average ISK 13,718,000⁷ and women ISK 10,555,000⁷.

Income rises with education. For people aged 25–64 with income from work, the median was ISK 8,478,000⁷ a year with basic education, ISK 9,722,000⁷ with a vocational qualification, ISK 12,240,000⁷ with a master's degree and ISK 14,116,000⁷ with a doctorate. Vocational graduates out-earn those with a general upper secondary education, whose median was ISK 8,297,000⁷.

Reykjavik average salary and income by municipality

There is no official salary figure by town, so tax-register income is the closest measure. Reykjavík residents had a mean total income of ISK 10,434,000⁷ ($81,281) in 2025, slightly below the national mean. The highest incomes are in two of the capital's neighbouring municipalities, Seltjarnarnes at ISK 13,893,000⁷ and Garðabær at ISK 13,229,000⁷. Akureyri, the largest town in the north, averaged ISK 10,140,000⁷, and the lowest mean among all 62 municipalities was ISK 6,871,000⁷ in Eyja- og Miklaholtshreppur.

Average salary in Iceland after tax

Income tax is withheld from every pay slip. In 2026 the combined state and municipal rate is 31.49%⁹ on monthly income up to ISK 498,122, 37.99%⁹ on income up to ISK 1,398,450 and 46.29%⁹ above that, with the municipal part based on an average of 14.94%⁹. Everyone gets a personal tax credit of ISK 72,492⁹ a month, which is subtracted from the tax. Employees also pay 4%⁹ of wages into a pension fund, which is deducted before tax is calculated.

On those rules, a median salary of ISK 948,000 leaves about ISK 669,211³ a month ($5,516): ISK 240,869³ goes in income tax and ISK 37,920 into the pension fund, so the employee keeps 70.6%. The average salary of ISK 1,058,000 leaves ISK 734,693³ ($6,055). Tax takes a smaller share of low pay because the credit is fixed: a retail starting wage of ISK 481,643 leaves ISK 389,267³, 80.8% of gross, while ISK 2,000,000 leaves 62.6%³.

How much tax do you pay in Iceland?

Iceland takes less from an average wage than most OECD countries once employer contributions are counted, but more directly from the employee. The OECD's tax wedge, which adds income tax and social security contributions paid by both employee and employer, was 31.5%⁵ of labour costs for a single person on the average wage in 2025, below the OECD average of 35.1%⁵ and close to the United States at 30.0%⁵. Germany's was 49.3%⁵. Measured only on the employee's side, the net personal average tax rate in Iceland was 27.2%⁵, above the OECD average of 25.1%.

How much is minimum wage in Iceland?

Iceland has no minimum wage set by law. Instead, "the minimum wage for each sector of the labor market is negotiated in collective agreements", and the wages agreed there are minimum terms for all workers in the relevant occupation.¹⁰ The government's own guidance adds that "employers and employees may not negotiate for lower wages or worse employment terms than those provided for in the collective wage agreements."¹¹

The retail agreement between the LÍV union federation and SA shows what those floors look like. From 1 January 2026, an adult shop worker starting out is paid at least ISK 481,643⁶ a month ($3,970), rising to ISK 523,064⁶ after five years with the same employer. Office staff start at ISK 515,559⁶. Young workers have lower rates: ISK 404,580⁶ a month at 16 and ISK 298,619⁶ at 14. On the same date, rates in the SGS general workers' agreements rose by 5.3%¹², and by at least ISK 23,750¹² a month.

Iceland collective bargaining coverage percentage

Agreements can replace a legal minimum because they cover almost everyone. The OECD and AIAS put collective bargaining coverage in Iceland at 90%¹³ of employees in 2024, against an OECD average of 33.6%¹³ and 11.1%¹³ in the United States. Union membership is just as high: trade union density was 90.6%¹³ in 2023, the highest of the countries compared here, where the OECD average is 15.2%.

Average wages in Iceland compared to world leaders

To compare pay across countries, the OECD converts average wages with purchasing power parities, which adjust for price levels. On that basis the average full-time wage in Iceland was $100,605¹ in 2025, the highest of all OECD countries, ahead of Luxembourg at $98,530¹ and Switzerland at $92,285¹; the United States was at $86,977¹. The OECD average was $64,809¹. The other Nordic countries are lower: Denmark $78,090, Norway $73,462 and Sweden $61,443. At constant prices, Iceland's average wage grew 34.6%³ from 2015.

Iceland per capita income

Income per person across the whole economy tells a similar story. The World Bank puts Iceland's gross national income per capita at $89,220¹⁴ in 2025 by its Atlas method, fourth among the ten rich countries compared here, behind Switzerland, Norway and Luxembourg and just ahead of the United States at $88,810¹⁴. In 2015 it was $53,170¹⁴. Gross domestic product per person was $98,323¹⁴ in 2025.

How fast wages are rising

Statistics Iceland's wage index, which tracks changes in wages over time, rose 7.9%¹⁵ in 2025 and 6.6%¹⁵ in 2024. Over the ten years to 2025 it rose by 7.7%³ a year on average, and the index now stands at about 10 times³ its 1989 level. Prices absorbed most of the rise in 2025: tax-register income grew 5.7% in 2025 but only 1.6% after inflation.⁷

Poverty rate of Iceland

High average pay does not reach everyone. Statistics Iceland's at-risk-of-poverty rate, based on the EU survey of income and living conditions, was 9.0%¹⁶ in 2023, about 35,000¹⁶ people. The rate has moved between 7.6%¹⁶ and 10.2%¹⁶ since 2004. Children are most exposed, at 12.8%¹⁶, and people aged 65 and over least, at 3.9%¹⁶.

What the numbers mean

For someone weighing a job in Iceland, the headline average needs three corrections. First, it is an average of full-time pay including overtime; the typical employee earns the median, ISK 948,000², and regular pay without overtime is lower again. Second, tax and pension take nearly 30% of a median pay slip, leaving about ISK 669,211³ a month. Third, prices are high, which is why the purchasing-power comparison matters: it still puts Iceland first in the OECD, so the high wages are not only a matter of an expensive currency.¹

The spread between jobs is wide. Doctors and ship and aircraft controllers earn about twice the average, while childcare, retail and tourism jobs pay the least: shop salespersons average ISK 771,000² and accommodation and food services ISK 859,000². Collective agreements cover 90%¹³ of employees and set the floor for these jobs, and over the past decade the lowest-paid jobs listed here saw the fastest pay growth.

Conclusions

1. The average full-time salary in Iceland was ISK 1,058,000, about $8,242, a month in 2025, but 64% of employees earn less; the median of ISK 948,000, about $7,385, is the better guide to a typical salary.
2. After income tax and the 4% pension contribution, a median earner keeps about 70.6% of gross pay, and the fixed personal tax credit makes the system progressive: a retail starting wage keeps 80.8%, a salary of ISK 2 million 62.6%.
3. Pay by job ranges more than threefold, from ISK 641,000 for child-care workers to ISK 2,169,000 for doctors, and the unadjusted gender pay gap, 10.4% in 2024, has widened since 2022 after falling from 20.5% in 2008.
4. Iceland has no legal minimum wage, yet it has the OECD's highest average wage in purchasing power, $100,605 in 2025, with agreed floors, such as ISK 481,643 a month for adult retail staff, set in agreements that cover 90% of employees.