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Overview of Iceland

Iceland is located between Europe and Greenland. It is well known for its spectacular landscapes, volcanos, geysers, glaciers and hot springs. The capital is Reykjavik and over 60% of the island’s populations lives here. Iceland has a population of approx 365.000 people and the nation language is icelandic. Iceland is home to the first parliament grounds in Europe but was one of the last places on Earth to be populated by humans. The main energy source for the island is geo-thermal energy.

Puncutality is appreciated and one should try to be early to a meeting, so that it can start on time. Most Icelanders dress well for business meetings and it is expected that the visitor dresses formally as well. Icelanders enjoy mixing business with pleasure and so a visitor may be surprised if the meeting tend to be more informal than expected. Icelanders value honesty, a direct approach and the keeping of one’s word once given.

Currency of Iceland

  • Icelandic Króna

Health Insurance and the Social Security system of Iceland

Iceland has a universal healthcare system which is mainly paid for by taxes. There is almost no private healthcare and no private hospitals.

Social security includes pensions, health insurance and disability insurance for all members.

Employer cost of Iceland

The cost for an employer to hire someone in Iceland is a plus of 6.10% to the gross salary.

Salary and bonuses of Iceland

Regular employees are paid either weekly or monthly.

A Christmas bonus is paid on the 1st of December and holiday bonuses are paid in summer.

Bonuses are not paid as a requirement but can be agreed upon for reaching requirements.

Public Holidays in Iceland

  • January 1st – New Years Day
  • moveable – Maudy Thursday
  • moveable – Good Friday
  • moveable – Easter Day
  • moveable – Easter Monday
  • Thursday between 19 and 25 April – First day of Summer
  • May 1st – Labour Day
  • 39 days after Easter – Assumption of Mary
  • moveable – Whit Sunday and Monday
  • June 17th – Icelandic National Day
  • First Monday in August – Commerce Day
  • December 24th – Christmas Eve
  • December 25th – Christmas
  • December 26th – 2nd Day of Christmas
  • December 31st – New Year’s Eve

Working Hours in Iceland

The regular work week in Iceland is 40 hours.

The regular work day is 9:00am until 5:00pm and in summer from 8am until 4pm.

Any work done outside of the regular working hours is seen as overtime. This is compensated with an additional 80% to the hourly wage.

Vacation in Iceland

In Iceland one receives a minimum of 24 days of vacation a year. Holiday pay is 10.17% of total wages. After 5 years in the same line of work, the number of days increase to 25 and after 5 years with the same employer, the number of days increase to 27 and 11.97% of total wage for holiday pay. After 10 years with the same employer, the days increase to 30 and the holiday pay increases to 13.04%

Sick Leave in Iceland

If an employee falls sick in Iceland, the employer has the right to demand a sick note from the doctor to verify the illness. In the first year with a new employer, the employee is entitled to 2 sick days per month, as well as 2 days per month for children’s sick leave, if the child is under 13. After the first 6 months, an employee is entitled to 12 children’s sick days per year.

After one year of working for the same employer, the employee is entitled to 2 months sick leave. After 5 years, an employee is entitled to 4 months sick leave and after 10 years, the employee is entitled to 6 months.

Termination/Severance in Iceland

When terminating an employee in Iceland, one has to do so in writing. The termination period is usually 3 months unless both parties agree on a different date. The employer does not need a reason to terminate an employee but an employee can request a meeting upon termination. Unless otherwise agreed upon, the employee is expected to continue working until the end of the notice period.