Iceland income tax law for 2024 Iceland Income Tax Rates for 2024

Iceland Income Tax Brackets

Tax Bracket (yearly earnings) Tax Rate (%)
kr0 - kr2,400,000 24.10%
kr2,400,000 - kr7,800,000 27.00%
kr7,800,000 and up 33.00%

Iceland has a bracketed income tax system with three income tax brackets, ranging from a low of 24.10% for those earning under kr2,400,000 to a high of 33.00% for those earning more then kr7,800,000 a year.

How does the Iceland Income Tax compare to the rest of the world?

Out of the thirty four countries tracked, twenty one have a higher maximum income tax rate then Iceland. Countries with similar tax brackets include Korea with a maximum tax bracket of 35.00%, Turkey with a maximum tax bracket of 35.00% and United States with a maximum tax bracket of 35.00%. Keep in mind that our ranking measures only nationwide income taxes, and does not account for local income taxes at state, province, or municipal levels.

Iceland Income Taxes
Maximum Income Tax Income Tax Allowance World Tax Rank
33.00% kr530,466 ($0 USD) 22nd of 34

What is the Iceland Income Tax?

Iceland's personal income tax is a bracketed income tax that must be paid yearly by all citizens to the government of Iceland. Failure to pay, or underpayment of, the Iceland income tax can result in high fees, fines, or jail time.

In addition to Iceland's income tax, other taxes may apply to wages or profits earned, including social services, medical care, and capital gains taxes.

Iceland Income Tax Allowance

Iceland provides most taxpayers with an income tax allowance of kr530,466, which can be kept as a tax-free personal allowance. Iceland's tax credit is a basic wastable tax credit, non-tapered, available to all (single) taxpayers without dependents.

A tax credit is a fixed amount of money that may be kept by taxpayers without paying any income taxes. Generally, a tax credit is subtracted from your gross income before your taxable income is calculated.

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