The wage system in Iceland is quite complicated. A general minimum wage does not exist. It varies according to the position held, the employee’s age and their experience. However, a salary should not be below 260,000 gross ISK per month if you work full time. The average gross salary in Iceland is ISK 415,000, but unless you have a highly qualified position or a lot of experience, you will most likely be at the lowest end of the salary scale.
Icelanders often have multiple jobs and work long hours. A full-time job represents about 40 hours of work per week. Beyond 171.15 hours per month, your employer must pay you overtime. The hourly system also has an impact on wages; You are paid different rates according to the time of day – or night. From 7 am to 6 pm, the salary is a day salary; From 6 pm to midnight, an evening salary, and from midnight to 7 am, a night salary. If you work on a Saturday, a Sunday or a holiday, the rate also increases; On those days, your employer has to pay you 4 hours minimum work, even if you actually only work two.
Your employer cannot make you work more than 13 hours a day, and must give you 5 minutes break per hour if you work more than 5 hours. Rules vary by location, check with your union.
The annual vacation is 24 days, during which you are paid a holiday bonus – 10.17% of your annual salary is paid to you – usually June 1, but some employers pay it into the salary every month. On December 1, you are also entitled to a Christmas bonus of 82,000 ISK (in 2016) if you have worked full time for the same employer in the last twelve months.
The role of trade unions
The stettarfélag, or union of workers, is an organization that protects the rights of workers and gives you access to various advantages (renting holiday homes, reducing the price of Icelandic courses, reductions in sports halls, for example) . These “unions” do not have the political and militant role they have in France, and we urge you to subscribe to it. Virtually all people who live and work in Iceland are members of a trade union.
If you have worked in Iceland long enough, your union also pays your sick leave or maternity leave if you have gone beyond the days authorized by your employer.
The lowest wages pay 37.3% of taxes, directly taken at source, then 39.8% for wages above 527,000 ISK and 46.24% over ISK 836,000. The Icelandic government reimburses each worker 52,000 ISK (in 2016) per month, which is added to the salary.
Icelanders are not very fond of contracts, and many people in Iceland work without signing a contract – it does not exempt your employer from being obliged to follow the union’s rules, but we still advise you to ask for a contract to make your working conditions clearer. Many young people, foreigners or not, are not paid correctly because they ignore the rules. Go to your union and ask about your rights – they can also see if your salary is what it should be!
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