A lot of people more and more often choose Iceland as a destination for economic migration. Many of them think about permanent residence in Iceland. In this article, you will learn what to do if you want to stay in this country for a long time, what the earnings are and where to look for a job. We will also take a closer look at what retirement in Iceland looks like. Check and convince yourself of the trip!
Trip to Iceland – first formalities
At the beginning, it is worth emphasizing that Iceland is not a member of the European Union. Despite this, EU citizens can enter Iceland without completing any additional formalities (Iceland belongs to the Schengen area). Regardless of whether it is a tourist or work trip.
If you intend to stay in Iceland not longer than 3 months, you do not need to register or obtain a residence permit. However, if you take up a job in Iceland or decide to stay longer – it will be necessary to obtain a residence permit. For this purpose, register yourself in the National Register, by having the following documents:
- copy / photocopy of passport or ID card
- a birth certificate
- certificate of marital status (optional)
- confirmation of health insurance
- confirmation of employment (type and period of employment, amount of salary)
Important! The application can be sent by email, but an integral part of the procedure for entering the National Register of Iceland will be to appear in person at the place of registration and present the original travel document and birth / marriage certificate.
Kennitala
You will need an Icelandic Kennitala ID number, necessary for living in Iceland. It is a 10-digit code that is given for a period of 6 months. After that time, it should be extended. Kennitala is used, among others, for:
- making an appointment with a doctor (later issuing a prescription)
- setting up a bank account
- tax settlements
- taking out health insurance
- car registration
- renting an apartment
Where to look for a job in Iceland?
Here are the most popular industries in Iceland:
- Gastronomy / Hospitality
- Fishery
- Agriculture
- Construction
- Physical job
Most job offers can be found in the capital of the country – Reykjavik. As for the language, for a longer stay it is recommended that you learn Icelandic. It is comforting that the vast majority of Icelandic citizens know English, so there should be no problems with communicating.
Remember! Recruitments in Iceland start well in advance. If the employer plans to hire a person from May / June, the job offer will be published already in January / February.
Earnings in Iceland
The minimum wage in Iceland is ISK 368,000 gross (approximately EUR 2649). Although, as in many other European countries, this amount may vary depending on the decisions of local trade unions.
Average earnings in Iceland are estimated at the level approx. ISK 410 000 – 470 000 gross (approx. EUR 2951– 3383). Interestingly, in Reykjavik, average earnings will be several times higher and amount to about ISK 700 000 gross (about EUR 5038). Check average monthly earnings in Iceland:
| Occupation / Industry | Sample monthly earnings |
| Plumber | ISK 630 000 (approx. EUR 4534) |
| Paver | ISK 460 000 (approx. EUR 3311) |
| Mechanic | ISK 732 000 (approx. EUR 5269) |
| Builder | ISK 600 000 (approx. EUR 4319) |
| Work in gastronomy / hotel industry | ISK 472 000 (approx. EUR 3397) |
| Agriculture | ISK 578 000 (approx. EUR 4160) |
| Fishery | ISK 490 000 (approx. EUR 3527) |
Retirement in Iceland – necessary information
The retirement age in Iceland is 67, and from the age of 65 on, you can receive an incomplete retirement pension (reduced by 6% from the amount that will be paid after the age of 67). There is also a possibility to postpone the moment of retirement to 72 years of age, then the basic retirement pension will increase by 0.5% per month.
The retirement pension system is based on 2 pillars:
- Benefits financed from the state budget (taxes)
- Contributions paid by the employer (employee)
The first pillar is additionally divided into:
- basic retirement pension (grunnlífeyrir)
- the amount depends on the obtained income (tekjutrygging)
Important! Both pillars are connected to each other, i.e. in the case of higher earnings, the subsidy from the state is automatically reduced. Similar measures both minimize the risk of burdening the state budget and equalize the average amount of retirement benefits.
On the other hand, if a person is receiving a retirement pension in Iceland, he/she is not required to submit a separate retirement application.
How much is the minimum retirement pension in Iceland?
As mentioned above, your retirement pension in Iceland is highly dependent on your annual income. When submitting a retirement pension application, a given person is required to submit a lump sum income at the turn of recent years. But! The size of the benefit for 40 years in service must be at least 56% of the most recent earnings.
It is worth emphasizing at this point, that the income (apart from the salary) consists of:
- real estate rental income
- interest on funds in a bank account
- receiving additional benefits
- capital income
What’s more! If a person after retirement is still working, he/she needs to report the income he/she has earned at the end of each year. Based on the earned income, the amount of the retirement pension is proportionally calculated for the next year. In the event of any change in the salary, the obtained difference will be refunded to the account or the person will receive a request for a refund.
In order not to reduce the retirement benefit, the annual incomes from employment contracts must not exceed ISK 1 200 000 (approx. EUR 8637), while other remaining incomes should not exceed the maximum ISK 300 000 (EUR 2159).
In this calculator you can estimate how much your retirement benefit in Iceland will be.
The minimum retirement pension in Iceland is ISK 266 033 (EUR 1915).
Retirement in Iceland – the necessary documents
- A completed retirement application
- Proof of income
- Certificate from the employer about paid insurance premiums
- Certificate of employment
- Eventually a certificate of receiving additional social benefits
The retirement claim must be made via island.is.
Staying in Iceland – useful links
If you are planning to live in Iceland, have a look at:
- https://www.skra.is/ – National Register, where, among others, a Kennitala identification number is made.
- https://innskraning.rsk.is/ – Iceland Tax Office
- https://www.heilsuvera.is/ – contact with the medical staff
- https://www.sjukra.is/ – contact with the family doctor / change of clinic
- https://www.straeto.is/en/verslun – public transport in Reykjavik
- https://vinnumalastofnun.is/ – Labour Office
- https://www.tr.is/ – Health Insurance Board in Iceland
