Moving to a new country takes courage. It also creates exciting opportunities and new beginnings. Taking the time to learn what to expect in Iceland – and what is expected of you – will help you make the most of your opportunities.

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Introduction to Iceland

Quality of life in Iceland

You will soon realize that Iceland is a nice place to live. First of all, you have very clear air to breath and drinking water that comes direct from the faucet. There is a broad variety of recreation in Iceland.


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It is quite popular to enjoy one of the swimming pools that you find in every town and village. The pools have natural geothermal hot water, usually ca. 25-30°C for adult’s pools and up 35°C for children pools. Swimming instruction is mandatory in all elementary schools.

Most of the buildings in Iceland are heated with geothermal water and the hot water for daily use is also geothermal, direct from the hot springs.

“Iceland performs well in many measures of well-being relative to most other countries in the Better Life Index. Iceland ranks at the top in jobs and earnings, and above the average in social connections, subjective well-being, health status, environmental quality, personal security, civic engagement, and education and skills.”

It doesn’t matter where you are located in the country, wild nature is always just a stone’s throw away. For this reason hiking is very popular and you can find hiking routes of every intensity close to where you live. If you drive a little bit out of the towns after dark and the sky is clear, you will probably see the spectacular northern lights. The Icelandic Met Office publishes an Aurora forecast every day.

As you may have heard, Reykjavík is considered a hot city in Europe – not only because of the hot water! The nightlife is famous and at weekends many young people party into the early hours.

If you like shopping, you have many choices. In the downtown area there are various shops and the main shopping street is Laugavegur which is also one of the city’s oldest shopping streets. On Laugavegur you will also find many bars and nightclubs. The main shopping malls are Kringlan and Smáralind.. Kringlan is close to the city center and Smáralind is some 10 to 15 minutes’ drive from the center. On weekends it is popular to visit the Reykjavík flea market. It is located by the Reykjavík harbor and has a lot of interesting stuff for sale, including many local delicacies.

There is always something going on in the cultural live: we have small and big music events, i.e. Justin Timberlake played here last year and Justin Bieber is giving two concerts in autumn 2016. In the Reykjavík area you will find many and varied entertainment events all year round. Very popular among the youngest generation is the Reykjavík Park and Zoo that is located in a beautiful park close to the Reykjavík center. In the Zoo you will find Icelandic domestic animals including reindeers, harbour seals and artic foxes. The children can also enjoy a short horse-riding tour within the Zoo.

In every town and village, you will find sports clubs that offer various sports training and competitions for all ages. The most popular sports in Iceland are football, handball and golf. Horse-riding is also very popular and many families keep their own horses on farms or in special facilities close to the home. Skiing has always been a popular sport in Iceland, but we can only practice skiing for a relatively short period of time, mostly between January and April / May, depending on weather conditions.

It may sound strange, but there are no trains in Iceland. But we have a well functioning public transport system operating all around the island. The ring road is paved but beyond that, at some places there are gravel roads, that usually are well maintained.

The populated areas in Iceland consists of 8 main regions whereas almost 70% of the population live in the Reykjavík area.


Contrary to popular belief, Iceland has a rather mild, coastal weather. The average summer temperature in the capital Reykjavik, is 10.6°C/51°F in July. The highest recorded temperature in the capital area is 24.7°C/77°F.


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The average winter temperature in Reykjavík is about 0°C/32°F in January. A branch of the Gulf Stream flows along the southern and the western coast greatly moderating the climate. However, this brings mild air from the Atlantic which in contact with colder arctic air results in a climate that is marked by frequent sudden weather changes and often strong wind. Furthermore this leads to more rainfall in the southern and western part than in the northern and eastern part of the island. During summer the nights are bright throughout Iceland and in June the sun in the north never fully sets. The longest day is 21. June and the shortest day is 21. December.


According to ancient written sources, the Norwegian chieftain Ingólfur Arnarson became the first permanent settler in Iceland in 874. Over the next centuries, people of Nordic and Gaelic origin settled in Iceland. Iceland came under the Norwegian king sovereign in 1262 and later the Danish king. Iceland became an independent democracy on June 17 1944 and has a written constitution and a parliamentary form of government.


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The people of Iceland celebrate the 17th of June as their Independence Day.

For ages Iceland was one of the poorest countries in Europe and the population did not exceed 70.000 people. In the 20th century the industrial revolution finally found its way to Iceland with the industrialization of the fishing fleet. In less than a century the Icelandic society has evolved dramatically, now being one of richest countries in the world with a population of around 330.000 people. Iceland is a member of the UN, NATO, EEA, and OECD.


According to Iceland’s constitution, the government is divided into 3 branches; the legislative, the judicial, and the executive branches. Althing, where laws are made and amended, is the Legislative branch. Executive branches, such as the ministries, directorates and various other government agencies, carry out laws. Judicial power lies with the Supreme Court and the district courts.


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Icelanders elect a president by direct popular vote for a term of 4 years, with no term limit. The president’s role is mostly ceremonial. Most executive power rests with the Government. Althing is the legislative body of 63 members from 6 districts, elected for a term of 4 years by popular vote. Anyone who is eligible to vote can stand for parliament. A cabinet of ministers stays in power until the next general election or a new government is formed. There are currently eleven ministers and one prime minister. The ministers usually sit in Althing.

Iceland has a universal suffrage, which means that every Icelandic citizen over eighteen can vote in the parliament election. Foreign nationals who have had legal residence in Iceland for five years can vote in local government elections. Danish, Finnish, Norwegian and Swedish citizens are granted the right to vote after three years of residence. Only Icelandic citizens have the right to vote in national elections.


Icelandic is one of the Nordic languages, it resembles the Norse language as it was spoken centuries ago. While the majority of Icelanders speak more than one language, Icelandic is the official language and is used almost exclusively in all areas of daily life in Iceland.


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A large majority of Icelanders also speak English as a second language as well as Danish or another Scandinavian language. To a certain degree you can say that a fair knowledge of these languages is a precondition for many unskilled and technical jobs in Iceland, while knowledge of Icelandic is not necessarily required. However, learning the Icelandic language gives you a great advantage and enhances your chances to find a more interesting and better paid job.


Freedom of religion is guaranteed in Iceland by the Constitution. There is a State church, the Evangelical Lutheran Church, to which over 85% of the population belongs.

Congregational activity in the capital is not strong and church attendance is low. Still the church plays a significant role in all major occasions in Icelander’s lives.

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Driving in Iceland

People from the EEA who hold a valid, standardized European driver’s license are not required to exchange their license. Europeans without this type of standardized license must exchange theirs for an Icelandic license.


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In Iceland drivers are obliged by law to use headlights at all times, day and night. Passengers in the front and back seats of automobiles are required by law to use safety belts. Be aware that outside the capital area driving conditions may be difficult. Large sections of highways are not paved and have a loose gravel surface.

For more information regarding driving in Iceland contact any tourist information centre in Iceland. There is information in English   on     the     following   websites:   www.randburg.com,  www.travelnet.is. and www.visiticeland.com/discovericeland/about-iceland

Currency and banks

The unit of currency used in Iceland is the Krona, abbreviated ISK, one of the world’s smallest currencies. In September, 2016, 1€ = 129 ISK. You can check the rate of the ISK at: www.sedlabanki.is


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Banks will exchange the most common currencies and it is a good idea to exchange your currency there as there are few shops in Iceland that accept foreign currency. Most shops and businesses accept major credit cards. Credit and debit cards may even be used in taxis. Debit and credit cards are commonly used in Iceland for small transactions. After you find a job you will need a bank account for your day-to-day transactions as most employers deposit the pay checks directly. Most banks are open weekdays from 09:00-16:00. To find a branch near you see: www.islandsbanki.is, www.landsbanki.is or www.arionbanki.is


Local time in Iceland is Greenwich Mean Time (GMT) all year round. So in Iceland the time is one hour later than Central European time during the winter, but two hours later in the summer time.

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Kepping in touch with home

To call to Iceland – the country code for Iceland is +354. No area code is necessary as all domestic calls are local. To call from Iceland – Dial 00 for an international line, then country code followed by the area code and finally the phone number. Sometimes the cheapest way to call abroad is to use an international calling card. For more   information and key figures about Iceland see www.mfa.is, www.island.is and www.iceland.is

You find the Icelandic telephone directory (in English) here.

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Working in Iceland

The Icelandic economy is small but growth and input have been sufficient to provide Icelanders with living standards that are among the highest in the world. Tourism, use of renewable natural resources such as the country’s rich fishing grounds and its hydro-electric and geothermal power capacity are the most important sources of export income.


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Diversification is increasing with fast growing sectors, including software and biotechnology industries, international and local film industry, tourism and the export of fisheries know-how. With a relatively young and well educated work force, Iceland is increasingly complementing its natural resources with industries capitalizing on human resources and technology.

The Icelandic labour market is characterized by demand for labour. The demand has partly been met by workers from other EEA countries. We expect an ongoing demand for EEA workers in some sectors such as the constantly growing tourism sector, the health care sector, the fish industry, seasonal jobs in the meat industry as well as some jobs in the service industry. There is also a growing demand in the construction industry.

“Iceland’s Scandinavian-type social-market economy combines a capitalist structure and free-market principles with an extensive welfare system, including generous housing subsidies. The economy is highly affected by fluctuations in world prices for its main exports: fish and fish products, aluminium, and ferrosilicon. Prior to the 2008 crisis, Iceland had achieved high growth, low unemployment, and a remarkably even distribution of income. However, GDP contracted by 4.7 percent in 2009 and by 3.6 percent in 2010 and since 2011 growth has been weak, expanding only by 1.8 percent in 2014, as exports of goods and services struggled to recover at the same pace than imports.[1]“. 

Most economic indicators are positive and the unemployment rate is among the lowest in the world and the inflation rate is also low.

Are your diplomas valid in Iceland?

You can have your diploma[s] assessed for equivalence and recognition in Iceland. The basic principle is that valid qualifications to practice a certain profession in your homeland are also valid in other EU/EEA countries. Higher degrees, 3 years of studies [BA, BSc, BS] and vocational studies with a secondary school education, should be recognized all over the EU/EEA.


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The Ministry of Education, Science and Culture is responsible for coordination of recognition procedures in Iceland. The ministry does not process all applications for recognition. Individual ministries handle the recognition for their respective spheres, for instance the Ministry of Health is responsible for recognition for medical and health professions. An assessment of equivalence of your diplomas will make it easier for Icelandic employers to evaluate your knowledge and skills. Elja assists you in issues concerning getting your diplomas assessed in Iceland.

Workers rights and labour laws

In Iceland the collective agreements between unions and employer’s associations are generally binding, which means that they also apply to non-union members. 90% of the labour market is covered by collective agreements.


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Wages and other terms of employment concluded in collective agreements are minimum terms. Salaries lower than what is stated in the collective agreement are illegal. The minimum wage depends on both education and work experience, e.g. the minimum wage for a qualified and experienced carpenter is higher than for an unskilled worker. Therefore make sure that you have all papers on your education and/or work experience. You can find a link to your union where you find further information on terms of employment at www.asi.is.

Contract of Employment – Workers are entitled to a written job contract no later than two months after first day of employment. Every employee receives a contract of employment with ELJA.

  • Holiday The general rule is that you are entitled to two vacation days for each month worked. In all wage contracts, there is a clause concerning holiday allowance. The holiday allowance should be calculated at the time of each wage payment, with a minimum of 10,17% of total wages. The holiday allowance enables you to go on holiday and still receive your regular salaries.
  • Weekly day off. For every seven day period a worker shall have at least one day off from work, which is directly connected to the daily
  • Pension Funds. In Iceland it is mandatory to pay to a pension fund. The employee pays a percentage (4%) and the employer must also pay a percentage (6%). Pension funds are transferable between EEA You will find information on the Pension Funds webpage.
  • Compensation for accidents occurring while on the job. Insurance against occupational injury covers employed persons working in Iceland. The occupational injury insurance covers accidents in the course of work. For further information see: tr.is/media/erlend-mal/English.pdf
  • The European Health Insurance Card can be used in all member states of the European Economic Area (EEA) and in Switzerland. Icelandic citizens and other residents in Iceland who are EEA citizens and have National Health Insurance in Iceland are entitled to the European Health Insurance Card.
  • Absence from work due to Worker who is unable to perform his normal duties due to sickness or accidents is entitled to wages for a limited period of time. The minimum rights are two paid days a month.
  • Termination of Employment. – The Icelandic labour market is flexible when it comes to recruiting and laying off staff. However, both employer and worker are subject to notice periods. The notice periods vary between unions and also depend on the length of employment. The general rule is that if you have worked less than three months the notice is one week, a month if you have worked for 3-6 months and 3 months if you have worked for longer than 6 months. Termination should always be accompanied by a written letter.

There are 15 public holidays in Iceland. They are called “red days” as they are marked in red on Icelandic calendars.


Everyone working in Iceland must pay taxes. The taxation system in Iceland is a PAYE system (Pay-As-You-Earn). ELJA will calculate and deduct taxes from all salaries and wages paid out to employees as required by law. The main income tax bracket is 37.30% in 2016. All those with a tax card are entitled to a personal tax credit of 50.500 ISK per month (February 2016). For more information, please visit the webpage of the Directorate of Internal Revenue.


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For every year you work in Iceland you must fill out and submit a tax return. It is usually due in March each year. When leaving Iceland you are also expected to send an income report to the tax authorities a week before you leave. This is done because your final taxes must be calculated, in some cases there may be a partial refund. Final assessment takes place on the basis of the tax return in the end of July the year following the tax year. If your withholding tax was higher than your assessment you will get a refund, and if you did not pay enough you must pay the difference. If you have an agent in Iceland who can claim your tax refund or pay for you the residue, he must have a written permit from you to receive the payment. If you do not turn in a tax return, the tax authorities estimate your income and tax you accordingly. This estimation is usually high and can cost you dearly. To avoid a bill from the Icelandic tax authorities later on when you have returned home make sure your tax return is sufficient.

Most people now do their tax return online, which is quite simple as many numbers are filled in in advance by the authorities. Instructions are also available in many languages on the Internal Revenue webpage: Please note that ELJA assists you with this process.

Housing and costs of living

ELJA can assist its workers in finding appropriate housing at a reasonable price. All our accomodation fulfills governmental standards and most are furnished.



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Here is a list of average prices of everyday items in the capital area.

1 kg bread € 2,50
1 ltr. of milk € 0,90
Coffee, 500 gr € 3,50
Bread cheese (1 kg) € 12,00
Bus ticket € 2,75
Gasoline (95 okt.) € 1,26
Hot dog from a stand € 2,45

Note: Cost of living figures can change and the rate of the Euro also.

What should you bring with you?

  • Educational diploma (if applicable to job applied for).
  • Criminal record certificate (clean record).
  • Driving license (if applicable). Certificate to operate special machinery (if applicable).
  • EU Passport (valid more than 6 months).
  • Birth certificate (if passport/id card does not state the registered birth place).
  • European health insurance card (EHIC).
  • E 104 form for the Icelandic Health Insurance (Not mandatory). *
  • Marriage certificate (if applicable – if this document is not presented when registered in Iceland, the person will be registered with an unknown marital status. which could affect the individual’s rights in some cases, and his children).
  • Sufficient funds to get you started until your first salary. Be aware that pay day is usually the first day of the month so it may be a while until your first pay check.
  • Enough money for a return ticket in case you decide not to stay in Iceland.

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Registration as a legal resident in Iceland

A citizen of an EEA/EU country may stay and work in Iceland for up to three months from arriving in the country, or stay for up to six months if seeking employment. If you intend to stay longer than three months you must apply for a residence permit. It is recommended that you do so directly after arrival in Iceland. ELJA takes more or less care of those formalities but of course your involvement will be needed.


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Visit our ELJA office or give us a call: www.elja.is. We assist you in finding housing, applying for an Icelandic ID number (“kennitala”) and other necessary formalities. If at any time you need help or information, please contact our ELJA office.

The kennitala (ID number)

All people born in Iceland and all people legally residing in Iceland are issued an Icelandic personal identification number. This number, “kennitala”, is issued by the National Registry (“Þjóðskrá”).


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This personal ID number is a ten digit number. The “kennitala” is very important in Iceland and is widely used to identify people, for instance it is necessary for health care, banking and enrolling in schools. The kennitala is your identity number. Your kennitala is connected to you and all your personal information such as, your correct name, your legal address, your age, and your civil status. ELJA assists you in getting your Icelandic ID number (“kennitala”). Whenever you move back to you native country or change address, you must notify the National Registry by filling out the proper forms. All personal information connected to the “kennitala” is guarded by strict laws, regulated by the Data Protection Authority in Iceland.

Social security

Before moving to Iceland you should contact the social security agency or health insurance programme where you were insured prior to your arrival to Iceland to obtain an E-104 form. The form will ensure your health insurance coverage in Iceland immediately on the transfer of residence.


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If you intend to stay for longer than three months in Iceland you need to apply for registration in the Icelandic health system and submit an E-104 certificate to the Icelandic health insurance as soon as possible. A citizen of an EEA State who does not possess a residence permit, and is therefore not registered as resident in Iceland, cannot enjoy health insurance coverage. In order to secure health insurance at the start of employment, the best course is to apply for and obtain a residence permit before coming to Iceland. (Further information on residence permit, visit: www.utl.is).

Those who are covered by social security in Iceland are entitled to various benefits like hospitalization, general medical assistance by physicians and specialists, home nursing, x-ray exams, per diem sickness benefits, physiotherapy, medications, dental treatment for children, occupational injury insurance, invalidity pensions, old-age pensions, death grants and child pensions.

Occupational injury insurance

If you get injured during the course of work, such injury is normally covered by occupational injury insurance. The same amount applies to all persons and is decided by law. Invalidity pensions and death grants in respect of accidents are paid, as are child pensions. Also, medical and medicinal costs etc., already paid by the injured person are reimbursed. Those who have so requested in their tax returns are also insured against injury sustained during housework. Further information can be found at: www.tr.is/media/erlend-mal/English.pdf

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Health care

Iceland is divided into health care regions, each with their own primary health care centres, some of which are run jointly with the local community hospital. The primary health care centres have the responsibility for general treatment and care, examination, home nursing as well as preventive measures such as family planning, maternity care and child health care and school health care.


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This service is open to all regardless of availability and regardless of insurance. Those that cannot show proof of insurance will pay higher fees. To find the health care centre closest to your home look for “Heilsugæslustöð” in the phonebook. If you are in the capital area you can also find the information here. For medical problems that arise after the closing time of the health care centres you can use a service called “Læknavakt”, located at Smáratorg 1, Kópavogur, tel. 1770 or you can call 848 2600 if you are closer to Akureyri. Læknavakt is open on a walk-in basis from 17:00-23:30 weekdays, and from 09:00-23:30 on weekends and holidays.

Telephone lines are open for advice and house call requests between 17:00-08:00 on weekdays and 24 hours on weekends and holidays.

Emergency services

Emergency and trauma services are located at the National University Hospital.

If you are not sure if your injury is an emergency you may call the hospital at 543 2000 and ask them for advice. If you need immediate assistance (ambulance, police and fire department and rescue units) then call 112. Be prepared to state your name, what the problem is and your location.

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Education in Iceland

A fundamental principle of Icelandic education is that everyone should have equal opportunities to acquire an education, regardless of sex, economic status, residential location, religion, possible handicaps, and cultural, social or ethnic background. The education system is divided into four levels:

  • Pre-school (leikskóli) – for children between the ages of 2 and
  • Primary school (grunnskóli) – 6 to 16 years of This is the compulsory school time.
  • Upper-secondary school (framhaldsskóli) – For those who are 16-20 years of age or anyone that has completed compulsory education or has turned 18 years of
  • Higher education or university (háskóli) – For those that have completed upper-secondary school and have a matriculation examination “stúdentspróf” or equivalent.

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Useful information

Directorate of Labour

Directorate of Immigration

Statistics Iceland

National Registry

The State Social Security Institute

The Ministry of Health and Social Security

The Ministry of Education, Science and Culture

The Ministry of Social Affairs

Directorate of Customs

Directorate of Internal Revenue

Reykjavík Social Services

The Labour Association

Icelandic counselling and information centre for survivors of sexual violence

Women’s Shelter

The Icelandic Red Cross

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