Emergency number in Iceland is 112

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Iceland-town

Finances & Banks

Mandatory pension

The Pension Act No. 129/1997 provides for a mandatory affiliation to the pension fund provided for in the applicable collective agreement, for all workers between the ages of 16 and 70. The membership of a workers’ pension fund is determined by the collective agreement on which the basic wages for each worker are determined.

The minimum contribution as from January 1, 2007 is 12%, of which 4% are deducted from the worker’s wages and 8% which is added by the employer.

The contribution base is comprised of all types of wages or compensation for work which is subject to income tax. The contribution base shall not, however, include benefits paid in kind, such as clothing, food or accommodation, or payments which are intended to cover expenses paid, e.g. vehicle allowances, per diem and food allowances.

The workers 4% contribution is deducted from their income before taxes are levied. The tax liability is postponed in the sense that the pension benefits are taxed as income from employment when they are eventually paid out.

Supplementary pensions

Law and collective agreements provide for a framework of supplementary pensions contributions. Final arrangements, however, are made on an individual basis as part of the contract of employment. A worker who pays 2% of his pay into a supplementary pension scheme receives a counter-contribution of 2% from his employer.

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Banks

There are three major banks here, and it is recommended that you get an Icelandic bank account and a debit card. With a debit card, you can withdraw money from kiosks or ATMs, or charge directly to your account from the store. To open an account at any of the banks you will need your ID number (kennitala), passport, and two passport photos. Visa, Mastercard and, to some extent, American Express cards, are widely used and accepted.

“Note: Alvotech can assist expats in opening a bank account.”