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Iceland Personal Income Tax and Payroll Tax for 2023 — Orbitax Tax News & Alerts

Iceland Revenue and Customs has published the key rates and amounts for 2023 (English), which includes the personal income tax changes in 2023. This includes the following monthly brackets and rates:

  • up to ISK 409,986 - 31.45%
  • ISK 409,987 to 1,151,012 - 37.95%
  • over ISK 1,151,012 - 46.25%

Note, the above rates include the average municipal tax rate of 14.45% that is applied in 2023 for employer withholding purposes.

Another related change is that the annual personal discount is increased to ISK 715,981 in 2023, up from ISK 646,993 in 2022. Further, the employer tax is maintained at 6.35%.

Additional information can be found on the Icelandic version of the Revenue and Customs website.