Salary and Pay Slips

Laun og launaseðlar

Wage payments must be accompanied with pay slips which clearly state the amount paid, how the wages are calculated and an overview of taxes and other expenses drawn from the salaries.

> Deductions of salaries are in the form of:

• Tax payments: The employer withholds the tax deducted from the salary and defrays the amount to the collector for the Treasury.
• Vacation payments/Holiday allowance: The employee defrays, at minimum, 10.17 % of the wages on to a separate bank account which is in the employee’s name. This amount substitutes wages when the employer takes time off work due to summer vacation.
• Pension fund payments: All wage earners must pay into a pension fund, which is paid out at retirement age. The general rule is that the premium paid into a pension fund or reversionary annuity is 10% of the total salary package. The employee pays 4% of that amount, and the employer pays the additional 6%.
• Payments to labour unions or trade unions.

General information about wages and working hours

Information about employment and employees on Island.is