Iceland

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Source: EURES The European Job Mobility Portal. For up-to-date information visit the Living and Working Conditions section about Iceland on the EURES Portal.

How to find a job

There are a number of ways to go about job searching, but it is a good idea to start looking for a job before you move to Iceland. The EURES portal contains all the jobs advertised at the Directorate of Labour in Iceland; EURES jobs are specifically marked by the European flag. On the portal, you may also find detailed information on the living and working conditions in Iceland as well as on the current situation on the country's labour market.

You can also contact a EURES Adviser by sending us an email at This email address is being protected from spambots. You need JavaScript enabled to view it..

Employment agencies [ráðningarþjónustur]: You may register free of charge with one or more private employment agencies. You can find employment agencies and homepages where you can find jobs in Iceland here: https://vinnumalastofnun.is/en/job-search/other-recruitment-agencies

Read the [classified] advertisements in the local newspapers: The two largest newspapers in Iceland are Morgunblaðið (www.mbl.is) and Fréttablaðið (www.visir.is). A special employment section (Atvinna) comes out on Saturdays in Morgunblaðið and Fréttablaðið, but there are often job advertisements on other days. Note that most job advertisements are in Icelandic.

Speculative applications: If you know the industry in which you want to work, you may want to send the relevant companies an application with a CV, call them directly or visit them and ask if there are any positions available. EURES can also help you to find suitable companies.

Contacts: Tell everyone you know in Iceland that you are looking for employment. Word-of-mouth via family and friends often gives good results.

Social media: On Facebook you will find circles/groups where you can apply for access to advertised jobs. Use the words 'starf, störf, vinna, atvinna' [job, jobs, employment, work] to find those groups.

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How to apply for a job

Curriculum Vitae/Résumé

In Iceland the usual practice is to enclose a résumé/CV with your job application. The CV should preferably fill no more than one or two pages. Most people include their photograph with the CV. Because CVs vary a great deal, here is a list of the information that should be included. The information should be in reverse chronological order (most recent information first):

Personal details: Name, address, phone number, e-mail address and perhaps date of birth (ID number) and marital status.

Education: It is here that formal education is specified. It should include when you studied, the name of the school, degree, and in what area your degree and your expertise is.

Work experience: This is a very important part of your résumé. Include a brief description of each job/position, name of the company and when you worked there.

Other qualifications: Here you should mention your language skills; spoken and written. You can also describe your computer skills, the type of driving licence you might have and other relevant qualifications.

Other/hobbies: Describe in a few lines your interests outside of work and leisure activities. If you have lived abroad by all means mention it.

References:  It is very important to name at least two people who will give you a good reference. State the names, job title, telephone numbers and e-mails of those individuals. Contact your referees and make sure you have their approval.

Cover letter

When you send in a job application or a CV you should also include a cover letter. The letter should be no longer than one page. Your cover letter is an important marketing tool that highlights your most attractive qualifications as a potential employee. While you may use the same CV for every job you are applying for, you should write a different cover letter for each job applied for.

Consider the following when writing the letter:

If you are responding to an advertisement be sure to read it carefully, and make sure you respond to what it asks for.

Explain why you want this particular job.

Make it clear to the recipient that you are familiar with the company and with the required qualifications and, furthermore, how you satisfy these.

Standard application

Larger employers in Iceland often use standard application forms. You will find these application forms on the job agencies’ websites or on the website of the relevant company. Most of them are available only in Icelandic, with the exception of the EURES application form www.vinnumalastofnun.is/eures. Employers decide who to invite for job interviews on the basis of these application forms, so it is important to fill them in correctly. You can often attach your CV, application letter and perhaps other important documents with the application.

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Finding accommodation

It is best to secure accommodation before you move to Iceland, though this may not always be possible. If you need accommodation during your first days in Iceland, a guesthouse or youth hostel may be the best short-term solution while you look for more permanent accommodation.

The rental market in Iceland is difficult. Rental rates are high and the availability of rental housing does not meet demand. Prices are highest in the centre of Reykjavík (ZIP code 101) and generally decrease as you move away from the centre. Rental rates outside of the capital district, in rural areas in particular, are much lower than in the capital.

It is very common to look for and find housing for rent on the internet. In the two largest newspapers, Fréttablaðið and Morgunblaðið, ads appear for vacant premises. Look for 'Available Housing' (Húsnæði í boði) either in the printed version or Web version.

The website www.bland.is is quite extensive, with many apartments and rooms available for rent. Choose 'real estate' (fasteignir) and then 'for rent' (til leigu). You can also insert your own housing advertisement for free or at a reasonable price. On social media, such as Facebook, there are many groups where both housing to rent is advertised and people advertise their housing. These groups can be found under the terms 'rent' (leiga) and 'housing' (húsnæði) and you can apply for membership.

You can use the services of rental agencies, but please note that payment for their services is made separately.

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Recognition of diplomas and qualifications

The importance of transparency and mutual recognition of diplomas as a crucial complement to the free movement of workers

The possibility of obtaining recognition of one’s qualifications and competences can play a vital role in the decision to take up work in another EU country. It is therefore necessary to develop a European system that will guarantee the mutual acceptance of professional competences in different Member States. Only such a system will ensure that a lack of recognition of professional qualifications will become an obstacle to workers’ mobility within the EU.

Main principles for the recognition of professional qualifications in the EU

As a basic principle, any EU citizen should be able to freely practice their profession in any Member State. Unfortunately the practical implementation of this principle is often hindered by national requirements for access to certain professions in the host country.

For the purpose of overcoming these differences, the EU has set up a system for the recognition of professional qualifications. Within the terms of this system, a distinction is made between regulated professions (professions for which certain qualifications are legally required) and professions that are not legally regulated in the host Member State.

Steps towards a transparency of qualifications in Europe

The European Union has taken important steps towards the objective of achieving transparency of qualifications in Europe:

Going beyond the differences in education and training systems throughout the EU

Education and training systems in the EU Member States still show substantial differences. The last enlargements of the EU, with different educational traditions, have further increased this diversity. This calls for a need to set up common rules to guarantee recognition of competences.

In order to overcome this diversity of national qualification standards, educational methods and training structures, the European Commission has put forward a series of instruments, aimed at ensuring better transparency and recognition of qualifications both for academic and professional purposes.

  1. The European Qualifications Framework

The European Qualifications Framework is a key priority for the European Commission in the process of recognition of professional competences. The main objective of the framework is to create links between the different national qualification systems and guarantee a smooth transfer and recognition of diplomas.

  1. The National Academic Recognition Information Centres (NARICs)

A network of National Academic Recognition Information Centres was established in 1984 at the initiative of the European Commission. The NARICs provide advice on the academic recognition of periods of study abroad. Located in all EU Member States as well as in the countries of the European Economic Area, NARICs play a vital role the process of recognition of qualifications in the EU.

  1. The European Credit Transfer System (ECTS)

The European Credit Transfer System aims at facilitating the recognition of periods of study abroad. Introduced in 1989, it functions by describing an education programme and attaching credits to its components. It is a key complement to the highly acclaimed student mobility programme Erasmus.

  1. Europass

Europass is an instrument for ensuring the transparency of professional skills. It is composed of five standardised documents

The Europass system makes skills and qualifications clearly and easily understood in the different parts of Europe. In every country of the European Union and the European Economic Area, national Europass centres have been established as the primary contact points for people seeking for information about the Europass system.

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Kinds of employment

There are special provisions in the Icelandic labour protection legislation regarding of children and adolescents working under the age of 18 years. According to those provisions, a special permit from the Labour Inspectorate is required to hire children under the age of 13 to work and children under the age of 15 may only be employed for lighter work. Working hours of adolescents aged 15-18 are limited to 40 hours per week and generally it is prohibited to have adolescents working during the period from 22:00 to 06:00.

The Icelandic labour market is very flexible. It is, for example, very easy for employers to recruit employees and to let them go. Likewise, it is easy for people to start new jobs and resign from their jobs.

Employment contracts can either be verbal or written at the start of the employment relationship.  However, according to the provisions of the collective labour agreements, a written employment contract must be made within 2 months of the employee's employment if they are employed for more than 1 month and if they work for more than 8 hours a week. Employment contracts can either be indefinite or for a certain period of time, and it is common for people to be in full-time employment, but there is also a number of people working part-time jobs.

Self-employed individuals bear the responsibility for paying taxes and expenses on their income to the Treasury.

See https://www.island.is/en/business_and_inndustry/business/self_employed/.

There is no specific legal definition of "Seasonal worker" in Icelandic law. Wages and other terms of employment concluded in collective agreements by the social partners are by law minimum terms , applying to all workers. Collective agreements are according to Act No. 55/1980 automatically binding for all workers and employers operating within its occupational and geographical area.

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Employment contracts

If a worker is hired for longer than 1 month and on average for more than 8 hours per week, a written contract of employment must be made or terms of employment confirmed by the employer in writing no later than two months after the employee starts work.

The contract must include the following information:

Where an employment relationship comes to an end within a period of 2 months from the start of work, the information mentioned above must be made available to the worker at the end the relationship.

A contract of employment can be terminated by the employer or the worker giving the notice of termination required by collective agreements. There are, however, a number of important derogations from this principle which restrict the freedom of the employer to end the employment relationship.

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Working time

In line with collective labour agreements the average maximum weekly working time over a four-month reference period shall not exceed 48 hours per 7-day period, including overtime. Working time is in this context defined as active working time. Working time for each 24-hour day must be organised in such a way as to provide at least 11 hours of consecutive rest for the worker. If possible, the daily rest time should be between 23:00 and 06:00. Moreover, workers are entitled to a rest break of at least 15 minutes during each working day of more than 6 hours. Coffee and meal breaks are considered to be breaks. For each 7-day period a worker is to have at least one day off from work, which is directly connected to the daily rest.

Night workers are those who work more than 3 hours between 11 pm and 6 am as a regular part of their job. Employers are required to take all reasonable steps to ensure that the 'normal' hours of their night workers do not exceed 8 hours in every 24 hours.

The duration of a lunch break varies between sectors of the labour market, from 30 minutes to one hour, taken between 11:30 and 13:30 and is not counted as paid working time. Workers are usually entitled to two coffee breaks during daytime work and these should be taken before and after noon. The length of each coffee break ranges from 15 to 35 minutes, depending on the applicable collective agreement.

Hours of daytime work are usually defined as 40 hours per week depending on the collective agreement, divided into five eight-hour working days from Monday to Friday. Collective agreements thus define full-time work as 173.33 working hours per month (40 hours per week). Work exceeding these limits is paid as a percentage of the daytime rate and is paid as overtime. Overtime pay is due if the daily hours exceed 8 hours or if the work is done outside the limits of daytime working hours defined in collective agreements.

Wages for overtime are defined as hourly pay equalling 1.0385% of the monthly wages for daytime work. Overtime calculated in this manner on top of daytime pay is the minimum wage for work done during overtime periods.

People who do shift work receive a special supplement for work done outside of normal working hours. In general, the supplement is at least 33% for the period from 17:00 to 24:00 Monday to Friday and 45% for the period from 24:00 to 08:00 every day, including weekends.

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Leave (annual leave, parental leave etc.)

All employees are entitled to leave and holiday pay for a minimum of 2 working days for each month worked during the previous holiday year (1 May to 30 April).

The minimum holiday for each year is therefore 24 working days.

The Act stipulates that holiday allowance is to be whenever salary is paid, at a minimum of 10.17% of total wages. That guarantees a minimum annual paid holiday of 24 working days. Holiday is to be granted during the period 2 May to 15 September each year and workers shall at all times be given the right to take at least 14 days’ holiday during the summer holiday period. The employer decides in consultation with his employees when they go on vacation during the summer vacation.

Public holidays are: New Year's Day (1 January) (major holiday), Maundy Thursday, Good Friday (major holiday), Easter Monday, First Day of Summer (First Thursday after 18 April), International Workers' Day (1 May), Ascension Day, Whitsun (major holiday), Whit Monday, Icelandic National Day (17 June) (major holiday), Tradesmen's Day (1st Monday in August), Christmas Eve from 12 noon (24 December) (major holiday), Christmas Day (25 December) (major holiday), the day after Christmas (26 December), New Year's Eve from 12 noon (31 December) (major holiday).

Overtime is paid for work on public holidays, but on major holidays a special supplement is added.

The right to sick leave and its duration varies, depending on collective agreements. For example, public employees generally have more sick leave than employees in the general market. In general, however, the employee's sickness entitlement increases the longer they work with the same employer. The minimum right is 2 days for each 1 month worked.

A parent is also entitled to 12 days in each 12-month period for the illness of children under the age of 13.

By law, all parents are entitled to maternity/paternity leave. Both parents have independent rights to maternity/paternity leave of up to 3 months after birth, and in addition they have 3 months which they can split between themselves. The total right to maternity/paternity leave after birth or adoption of a child is therefore 9 months. The right to payments for maternity/paternity benefits depends on the position of the parent in the labour market, i.e. whether they are in the labour market, are home makers or are studying.

Parents also have the right to parental leave for up to 4 months to take care of their child. The right expires when the child reaches 8 years of age. Employees on parental leave are not entitled to payment from the maternity/paternity leave fund or other public funds.

Paid study leave is not common in the private sector. However, public employees with university education are entitled to paid study leave after four years at the same institution, under collective agreements. The length of the leave and how it is acquired varies, according to the occupation in question.

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Payment

The social partners negotiate wages and other issues that affect employment in collective agreements. Salaries and terms of employment must never be less than those stipulated in collective agreements. The minimum wage is therefore negotiated in each sector of the labour market by the social partners and can differ between occupational sectors. Employers must observe the minimum rates fixed in the applicable collective agreement when they negotiate contracts of employment with individual workers.

Collective agreements usually set minimum wages to those 14 years of age and older. For information on wage rates and working hours, please contact the trade union or the federation to which it belongs.

Collective agreements require that payment of wages must be accompanied by a written salary statement (pay slip). Workers are entitled to ask their union representatives to check whether their wages and deductions made by their employer have been calculated correctly.

A written pay statement must include, as a minimum, the following information:

Wages on the Icelandic labour market are usually paid directly into the worker’s bank account, but can also be paid directly with cheques or cash. Collective agreements usually state that wages are to be paid monthly on the first weekday after the end of the month for which the wages are being paid. Wages in some sectors are paid on a weekly or bi-weekly basis.

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End of employment

The general principle on the private labour market is that any employment contract concluded for an indefinite period of time may be terminated for any reason, by both employer and employee, subject to notice periods, based on the applicable collective agreement. However, there are some restrictions under this rule that protect, for example, pregnant women, employees on maternity/paternity leave and union representatives at their workplace.

Notice of termination must be in writing and the notice period starting from the end of the month (or week if applicable). If the worker does not receive his formal notice of dismissal at least on the last working day of the month, his notice period is automatically pushed back to the end of the next month. The length of notice periods ranges from 1 week to 6 months (3 months is common), depending on length of service and service time at the affected organisations.

The employment contract remains intact until the end of the notice period, which means that rights and obligations of both parties remain unchanged during the period. The parties can however come to an agreement to end their employment relationship immediately.

Where the worker leaves without giving the required notice, the employer may have, in certain circumstances, a right to claim damages. There are exceptions, where no notice is required – such as in the event of gross misconduct by either party, or dangerous or unsuitable working conditions.

There is no reference in the law or in collective agreements in the private sector to any special retirement age, but public servants have to retire at the age of 70. Retirement age can be said to be governed by rules relating to entitlement to old age pension. For the majority of workers, entitlement to old age pension is set at 67 years old. Workers have the option of early retirement at age 65 or to postpone their retirement to the age of 70. Seamen are entitled to old age pension at age 60.

All employees are obliged to pay an amount from their salary into a pension fund.  Payments from a pension fund reflect the employee's contribution over the years, i.e. how long and how much the person has paid into the fund, and can therefore vary greatly. The same applies to disability pensions, but you are entitled to such pension benefits if your working capacity is reduced due to an accident or illness, where the resulting impairment is assessed to represent at least 50% permanent disability.

According to social security legislation, those who have reached the age of 67 and have lived in Iceland for at least 3 years between the ages of 16 and 67, are entitled to a pension. The entitlement is calculated in proportion to the number of years the person has lived in Iceland between the ages of 16 and 67. In order to receive full entitlement, the person must have lived in Iceland for 40 years. Payments of old-age pension from the social security are reduced due to income, e.g. wages or pension benefits from a pension fund. Those who are entitled to payments from a pension fund receive low or no payments from the social security system.

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The health system

Health care centres can be found throughout the country. In the capital area, those centres are located in the neighbourhoods and residents must register at their neighbourhood centre. Health care centres provide all the general medical services, and people usually go there first because of illness or health problems. The centres also provide maternity protection, child welfare, school health care and home care. A fee is charged, specifically for research, but charges are low for those who are insured. Elderly and disabled citizens pay lower fees and the service is generally free of charge for children under 18 years of age.

Outside normal health care centre opening hours, doctors are on duty at health care centres in the villages outside the capital area while, in the capital area, the Emergency Watch (Læknavaktin), located at Smáratorg in Kópavogur, operates this service. Medical services outside normal opening hours, at night and at weekends, are more expensive.

Emergency rooms and accident centres or emergency departments are located in most health centres and hospitals. The service is provided throughout the year. The emergency phone number 112 (one, one, two) carries out all emergency services and responds to all emergency calls and assistance requests.

People can go directly to medical specialists who operate their own offices. This service is much more costly than at the health care centres, although health insurance will contribute to the cost. There is, however, a yearly limit on these payments. The elderly, disabled people and children pay lower fees.

In general, the health insurance does not cover dental services. However, dental care services are being implemented for children under 18 years of age. As of 1 January 2018, only one fixed fee of ISK 2 500 applies to children. Specific rules apply to the participation of health insurance in dental costs for the elderly and the disabled and the cost of orthodontics for children.

Medicines, both prescriptions and retail drugs, can be purchased only in pharmacies and drug stores. Health insurance subsidises prescription drugs through a special, step-by-step payment system, each person paying proportionally less as their medical expenses increase within a 12-month period. In the first step, the person pays for the medicine in full and, in the second step, they pay 15% of the price of the medicine. In the third step, they pay 7.5%. Once the cost of the drug has reached a certain maximum, the patient will receive full coverage for the remainder of the period.

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Income and Taxation

Median of total wages of full-time employees per month in 2017:

Managers

ISK 979 000

Experts

ISK 678 000

Technicians and other qualified workers

ISK 631 000

Office workers

ISK 510 000

Workers in services and sales

ISK 479 000

Tradesmen and qualified labourers

ISK 682 000

Machine operators

ISK 586 000

Unskilled labourers

ISK 467 000

Industrial tradesmen

ISK 733 000

Labourers

ISK 521 000

There are two levels of value added tax, 24% and 11%. The general level is 24%, and applies to all products and services that are not specifically defined by law to be at the 11% level, or that are exempt from VAT. At the 11% level, for example, are food sales, excluding alcohol, accommodation services, books and magazines, hot water, electricity and oil for central heating, CDs, condoms, non-disposable nappies and radio and television usage charges. Certain services are exempt from VAT, for example, health services, services of schools and educational institutions, social services, public transport and hospital transport and artistic activities.

The employer is obliged to deduct local taxes from wages and other payments to employees. The tax deduction consists of local authority tax and income tax payable to the state.

The deductible tax percentage is 36.94% of a (monthly) income up to ISK 927 087 and 46.24% from an income above ISK 927 087. Personal tax credit is ISK 56 447 per month for the year 2019.

Typical monthly deduction from a salary of ISK 583 000 (median wage in Iceland in 2016).

Total wages:

ISK 583 000

Deduction from wages:

Pension-fund contribution (4%):

ISK 23 320

Deductible tax percentage level 1 (36.94%):

ISK 206 746

Deductible tax paid (deductible tax - personal tax credit):

ISK 150 269

Union dues (0.7%):

ISK 4 081

Total deduction:

ISK 177 670

Paid salary:

ISK 405 330

Other general taxes on individuals

Capital income tax i.e. interest income, dividend, sales profit and rental income is 20%.

A radio broadcasting fee is charged to all persons aged between 16 and 70 with income tax over income limits. The radio broadcasting fee is ISK 17 500 for the year 2019.

Car taxation is calculated on the basis of the CO2 emissions and the weight of the vehicle.

An oil surcharge applies to usable fuel on vehicles. The amount payable is ISK 62.85 per litre of fuel plus 24% value added tax.

A levy for the elderly project fund is applied to all persons aged between 16 and 70 with income tax over income limits. The levy is ISK 10 464.

Couples and partners do not receive a special tax credit, but they can use their spouse's personal allowance if it is not fully utilised.

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The education system

The education system is divided into four parts, pre-school, compulsory school, upper secondary school and university.

Attending pre-school is not mandatory. Most pre-schools are run by local authorities, but there are also privately operated pre-schools. Parents apply for a pre-school stay for their child in their municipality or the relevant pre-school. It varies from municipality to municipality when children can enter pre-school, but it is usually between the ages of one and two.

All children aged 6-16 years are required to attend compulsory school in Iceland. Parents or guardians are responsible for registering children at school, and most primary schools are run by local authorities.

Upper secondary education follows compulsory school, but attendance is not mandatory. The duration of the secondary education varies, depending on whether it is an academic programme or vocational education, and a matriculation degree usually takes 3 years. Upper secondary schools are referred to as comprehensive high schools (fjölbrautarskólar), colleges (menntaskólar), trade schools (iðnskólar) or vocational colleges (verkmenntaskólar). Students complete studies either with a matriculation degree in academic subjects, a vocational degree from a trade school or a special degree programme. Some upper secondary schools offer evening classes and distance learning for an older group of students.

Those who have completed a matriculation or equivalent degree can attend university. Some subjects require a special entrance exam. Some universities offer a special graduate programme for those who have not completed a matriculation degree and distance education in certain subjects. University education is completed with an appropriate degree according to level and length of study, i.e. a diploma, a bachelor, masters or doctorate degree. In Iceland, there are seven universities, five of which are operated by the government and two are private universities.

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The cultural and social life

One of the main characteristics of culture in Iceland is the language, Icelandic, with a very small speech community. A large number of Icelandic books are published every year, and fiction writing has a long tradition, which can be traced back to the Icelandic Sagas of the 13th and 14th centuries. Iceland has long been considered a literary nation, although book reading has declined somewhat in recent years.

Icelandic music has attracted worldwide attention in recent years, and it is safe to say that the music scene in the country is flourishing. Concerts are well-attended and every year there are popular music festivals that attract visitors from around the world.

About 90% of all buildings in Iceland are heated with hot water, and central heating costs are much lower here than in neighbouring countries. This adds to a great swimming culture in Iceland, and many people begin or end their day with a swim. In Reykjavik alone, there are seven public swimming pools that are open all year round, from early morning until evening. Most swimming pools are outdoors and usually have hot tubs. Swimming is compulsory in elementary schools in Iceland.

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