Employer of Record is a grey area in Iceland. There is no EOR law and no EOR licence; the nearest regime is the Act on Temporary Work Agencies (139/2005), and no source we read says whether it covers an EOR that employs a remote hire for a foreign client (althingi.is, checked 2026-10-10).
Employer statutory cost is ISK 1,183,400 on an ISK 6,100,000 salary, 19.40% of gross: the 6.35% tryggingagjald levy, an 11.5% employer pension and 1.55% in union funds (skatturinn.is, checked 2026-10-10). The EOR fee is on top: $399 to $599 per month where a vendor shows an Iceland price (Playroll, Deel), and $199 to $699 on global lists.
What sets Iceland apart is that pay floors come from collective agreements, not a statutory minimum, yet under Act 55/1980 they bind every employer in the sector. If the arrangement counts as agency leasing, the client is jointly liable for the EOR’s unpaid minimum pay and payroll charges.
Of the 9 providers, one, Remote, says it owns an Icelandic entity; the other 8 name none. An Employer of Record suits a company that needs one employee on Icelandic terms and accepts the open legal question, once the provider confirms its registration in writing. An independent specialist can work as a contractor, see also paying contractors in Iceland. For a permanent presence, your own Icelandic entity is the other route.
Employing someone in Iceland: key facts
Iceland has no statutory minimum wage; pay floors, hours, notice and benefits come from statutes and collective agreements that bind all employers in a sector. Amounts are in ISK, read on 2026-10-10.
Minimum wage
There is no statutory minimum wage. Under Act 55/1980 art. 1, terms agreed by the labour-market organisations are minimum terms for all employees in the branch and area covered, whether or not the employer is a member, and individual contracts below them are void (althingi.is, checked 2026-10-10). The two benchmarks below are rates of specific agreements, not statutory figures; we did not map which agreement applies to a given role.
Benchmark (full time, not a statutory minimum)
ISK per month
From
Source
SA-Efling general agreement, lowest grade (launaflokkur 4), starting pay
SA-VR agreement, office workers, after 3 years’ experience
538,924
2026-01-01
same
Not a statutory minimum wage: Iceland has none. SA-Efling general agreement, pay grade 4, starting pay, full time, ISK per month, table in force on 31 December each year; 2026 is the table from 2026-04-01. The 2022 table stayed in force through 2023. Source: Efling pay tables, checked 2026-10-10.
Employer contributions
2026 rates, no wage ceiling. Percentages are of gross pay (skatturinn.is, checked 2026-10-10).
Contribution
Rate
Note
Tryggingagjald (social insurance levy)
6.35%
General 4.90% + employment insurance 1.35% + wage-guarantee fee 0.05% + market fee 0.05%; unchanged from 2022; sea-fishing crews +0.65%
Employer pension
11.5%
Legal minimum total is 15.5%, split by collective agreements as employee 4% and employer 11.5% (Act 129/1997 art. 2)
Union funds
1.55%
Sickness 1% + holiday-home 0.25% + vocational training 0.3%; SA-VR and SA-Efling rates, other unions may differ
Total in our model
19.40%
Not counted: the optional supplementary pension (the employer matches 2% if the employee puts in at least 2%) and the accident, death and disability insurance the agreements require, for which we found no rate.
Not added: the 0.13% Virk contribution named in the agreements. Act 113/1990 art. 23a funds Virk from tryggingagjald revenue, so adding it would count twice; we did not confirm this reading with an adviser.
Source for pension and fund rates: VR agreement arts. 9.1 to 9.4, pension act, checked 2026-10-10.
Working hours and overtime
Statute: no more than 40 daytime hours a week, normally 8 hours a day Monday to Friday (Act 88/1971 art. 2) (althingi.is, checked 2026-10-10). It excludes some groups, such as managers whose hours cannot be monitored.
SA-VR office workers: 35.50 active hours a week, or 36.75 including contractual breaks; daily rest at least 11 hours (arts. 2.1.2, 2.4.1).
Overtime: no statutory rate. SA-VR pays 0.875% of the monthly daytime wage per hour up to 159.27 hours a month, 1.0385% above that, 0.9375% from 0:00 to 7:00 and 1.375% on major public holidays (arts. 1.7.2, 1.7.3) (vr.is, checked 2026-10-10). Rates differ by agreement.
Annual leave and public holidays
Statutory leave: 24 working days, 2 per month worked, leave year 1 May to 30 April; holiday pay at least 10.17% of total wages (Act 30/1987) (althingi.is, checked 2026-10-10).
SA-VR agreement: 25 days and 10.64% after 6 months for staff aged 22 or older. For leave taken from 1 May 2026: 26 days and 11.11% after 5 years in the trade, 28 days and 12.07% after 4 years in the company, 30 days and 13.04% after 6 years in the company (vr.is, checked 2026-10-10).
Public holidays: the government job portal counts 16 a year (work.iceland.is, checked 2026-10-10). The SA-VR agreement lists them, including 1 May, Ascension Day, Whit Monday, 17 June and the first Monday in August; we did not reconcile the list with the Act on holiday peace (32/1997).
Probation
No statutory probation period found.
SA-VR: the first three months are a trial period with 1 week’s notice for both sides.
SA-Efling: no notice in the first two weeks, then 12 calendar days.
The pay floor applies during probation (vr.is, art. 12, checked 2026-10-10).
Notice
Notice is mutual, in writing and set mainly by collective agreement; after probation it ends at a month change.
Source
Notice
SA-VR art. 12.1
1 week in the first 3 months; 1 month in the next 3; 3 months after 6 months’ employment; if made redundant after 10+ years with the company, 4 months at age 55, 5 at 60, 6 at 63
SA-Efling art. 12.2
12 calendar days after 2 weeks; 1 month after 3 months; 2 months after 2 years; 3 months after 3 years
Statute (Act 19/1979 art. 1)
1 month after 1 year, 2 months after 3 years, 3 months after 5 years with the same employer
Efling art. 12.2 states that it replaces art. 1 of the Act. Sources: vr.is, althingi.is, checked 2026-10-10. Collective redundancies fall under a separate act we did not read.
13th salary and bonuses
There is no statutory 13th salary. The SA-VR/LIV agreement fixes two supplements for full-time staff, pro-rated for part-year or part-time work: a December supplement of ISK 114,000 for 2026 (110,000 in 2025, 118,000 in 2027) and a holiday supplement of ISK 62,000 for the leave year from 1 May 2026 (vr.is, checked 2026-10-10).
Mandatory benefits
Pension fund membership: at least 15.5% of wages in total.
Sick pay under SA-VR art. 8.2: first year 2 paid days per month worked; after 1 year 2 months per 12 months; after 5 years 4 months; after 10 years 6 months. Work accidents: up to 3 months of daytime wages.
Insurance against death, permanent and temporary disability from work and commuting accidents (art. 8.6.1).
Children’s sick leave: 12 days per 12 months after 6 months (art. 8.5).
Employer-paid sickness, holiday-home and training fund contributions.
Parental leave is paid from the Maternity/Paternity Leave Fund, financed through tryggingagjald; we did not check this against Act 144/2020 (vr.is, checked 2026-10-10).
Work permits
EEA and EFTA citizens need no work permit. Non-EEA nationals need a work permit and a residence permit, and the employer applies (Act 97/2002) (government.is, checked 2026-10-10).
A temporary permit requires, among other things, that no worker could be found in Iceland, the EEA, EFTA or the Faroe Islands, a contract with pay equal to Icelanders and collective-agreement terms, a comment from the relevant union (7 days), health insurance and a return-fare guarantee (art. 7).
Special-skills permit (art. 8): a specific job needing specialist qualifications, usually granted for one year, extendable up to four years at a time.
The permit is tied to one employer; changing employer needs a new permit (art. 12). Employing someone without a permit is not allowed (art. 6).
Processing times and fees: not found.
Currency and payroll
Icelandic krona (ISK), not the euro. Central Bank rate on 2026-10-10: 1 USD = ISK 122.08 (cb.is, checked 2026-10-10). Pay is monthly: SA-VR art. 1.9 sets payment on the first day after the month ends, or the last working day of the month if that day is a holiday. Withholding tax and tryggingagjald are filed and paid monthly.
Is Employer of Record legal in Iceland?
Grey area. Iceland has no EOR-specific law and no EOR licence. The nearest regime is the Act on Temporary Work Agencies (starfsmannaleigur) 139/2005. Art. 1 c defines an agency as a person or company that, under a service contract, leases its employees for a fee to work at a user company’s workplace under the user’s supervision (althingi.is, checked 2026-10-10). None of the sources we read says whether an EOR that employs a remote person for a foreign client is such an agency, and we found no law-firm, Vinnueftirlit or ministry analysis of EOR under this Act. See also the Employer of Record glossary entry.
What the Act requires of an agency (althingi.is, checked 2026-10-10):
Registration is a notification, not a licence. Art. 2: anyone providing agency services in Iceland must notify the supervisory authority no later than the day the activity starts, and only agencies on the authority’s published register may provide the service. The current text names Vinnueftirlit rikisins (the Administration of Occupational Safety and Health); the Directorate of Labour still handles work permits. When supervision moved is not confirmed.
Establishment. Agencies not established in the EEA or EFTA may not provide services without establishment unless an international agreement allows it. An agency serving longer than ten working days in 12 months needs a representative in Iceland (arts. 2 to 3).
Records. Staff lists, work-permit validity for non-EEA staff, user-company identity and copies of employment contracts go to the authority; payslips and time sheets are kept for a month after the service ends (art. 4).
Equal terms. An agency worker gets at least the pay and terms they would have if hired directly by the user company for the same job (art. 5 a). An agency may not re-lease a worker to a user that employed them in the previous six months, and may not restrict the worker from later joining the user (arts. 6 to 7).
Collective agreements apply anyway. Under Act 55/1980 art. 1 floors, fund contributions and notice periods bind any employer in the sector (althingi.is, checked 2026-10-10).
The risk the client carries if the Act applies:
Joint liability. The user company is jointly and severally liable for unpaid minimum pay and other underpayments to the agency’s workers for the time they worked for it, including unpaid payroll charges but not unpaid holiday pay; a parent company is jointly liable (art. 4 b). Claims must reach the user within four months of falling due, and a court may extend this to twelve if the user knew or should have known of an obvious default. An undisputed claim is payable within 24 working days.
Exemptions (art. 4 c). Leasing shorter than ten working days in 12 months; claims by the agency’s owners or relatives; agencies recognised by the collective-agreement consultation committee; a user that has demonstrably checked contracts, time sheets, payslips and proof of payment; and cases where the Wage Guarantee Fund applies after bankruptcy.
Registration confirmation. The user must ask the agency for written confirmation that it informed the authority within ten working days of the start, report to the authority if it gets none, and hand the confirmation to the union shop steward or union on request (art. 4 a).
Penalties. Daily fines up to ISK 1,000,000 (art. 11 a), administrative fines up to ISK 5,000,000 for missing or false information (art. 11 b), ordinary fines (art. 13) and a police-enforced temporary stop of operations (art. 11).
Permits. A non-EEA hire cannot lawfully start before the permit is issued; hiring earlier is an offence for the employer (government.is, checked 2026-10-10).
Not settled in any source we read: whether the Act applies to an EOR with a remote employee and a foreign client at all, and what Vinnueftirlit’s position is. See also co-employment.
Who actually employs your hire in Iceland
We compared the 9 providers that operate in Iceland against their own pages, the Icelandic company register (Skatturinn, fyrirtækjaskrá) and Vinnueftirlit’s list of registered agencies, which showed 17 entries on 2026-10-05 (island.is, checked 2026-10-10).
Says “at Remote, we own our own legal entity in Iceland” (remote.com). Local Terms name Remote Technology Iceland ehf. and say employees are strictly the employees of Remote Iceland. Registered in the company register (5805210530); a board member is Remote’s co-founder and CEO
The Iceland page names no entity. The registry lists DEEL Iceland ehf. (5810211430), whose only board member is Alex Bouaziz, Deel’s co-founder and CEO; Deel doesn’t state it
The Iceland guide speaks of “global entity infrastructure”. The registry lists Globalization Partners Icel ehf. (7008212180), whose recorded beneficial owner is described in public sources as G-P’s founder and CEO; G-P doesn’t state it
Says Atlas HXM “operates its own entities” on a ranking page, a global claim with no Icelandic entity named. The registry lists Atlas Tech Solutions Icela ehf. (5509212940), earlier Elements Global Services Iceland ehf., the brand’s former name; the vendor doesn’t state it and the link is not verified
The Iceland page says its EOR handles full compliance and names no entity. No company found by name
From $199/month, global
All checked 2026-10-10. Providers whose Iceland coverage we could not confirm (Oyster, Rippling, Native Teams, Papaya Global, RemotePass, Pebl, Safeguard Global and others) are not in the table. Multiplier is not in it either: its Iceland pages were not reachable, though the registry lists Multiplier Technologies Ice ehf. (6607221060), whose chair is described in public sources as Multiplier’s co-founder and CEO.
Own entity means the vendor’s own statement and document plus a register record (Remote). For Deel, G-P and Atlas HXM the registry lists an Icelandic company with the brand’s name, but the vendor doesn’t state it; none of the 9 named a partner or mixed model. Source: vendor pages and Skatturinn company register, checked 2026-10-10.
Eight of the 9 don’t name an Icelandic employer in their own words. That matters because the Act on Temporary Work Agencies puts a duty on the client to ask for registration confirmation, so you need to know which entity would sign. None of the 9 providers, nor the companies the registry lists under the Deel, Remote, Multiplier, G-P or Atlas names, was found by name or company ID in Vinnueftirlit’s list of agencies; that is a limit of a name search, not a finding of non-compliance, since the list may omit an EOR for other reasons. Ask the vendor before signing: which Icelandic entity employs my hire, has it notified Vinnueftirlit under Act 139/2005, and can it give me the written confirmation art. 4 a asks me to request?
How to choose an EOR in Iceland
If you want the vendor’s own words on the entity, start with Remote. It is the only provider that states it owns an Icelandic entity and names it in its Local Terms. For the rest, get the entity name in writing before signing.
If you need a non-EEA hire to start, check the permit route first. An employer with no branch in Iceland can get temporary permits only under service contracts or academic, scientific or educational collaboration agreements, and whether an Icelandic EOR can sponsor a permit is an open question. Rivermate’s guide says an EOR can sponsor non-EEA/EFTA work permits and Remote People’s page offers work-permit help; both are vendor statements. Ask for the permit type and who applies.
If price decides, compare the same thing. Only Playroll ($399) and Deel ($599) show an Iceland price; the rest are global lists from $199. Add the 19.40% statutory cost, which is the same for every provider, and ask about the deposit: Playroll says it requires a refundable deposit of one month’s salary, a global condition.
If you hire in a sector with its own union agreement, ask which one applies. Floors, fund rates and notice differ by agreement, so the provider should name the agreement it will apply and the fund rates, which we show only for SA-VR and SA-Efling.
Why it fitsSays it owns its Icelandic entity; Local Terms name Remote Technology Iceland ehf., also in the company register. $699/month, a global price.
The oldest, most analyst-recognized EOR (founded 2012) — deepest certification stack and widest documented country footprint, but no owned-entity disclosure or dedicated Contractor of Record product.
8.3/10
★ 4.4
EOR price
From $599/mo per employee
Coverage
180+ countries
Time to hire
Vendor claim: 'hire anywhere in minutes'; no SLA published
A transparently-priced EOR and contractor platform with broad 180+ country coverage and unusually strong Africa/Middle East reach. Best for cost-conscious SMBs that want published prices and hands-on support over deep automation.
7.6/10
★ 4.7 · 209 reviews
EOR price
$399 per employee/month (no minimum)
Coverage
180+ countries
Time to hire
Vendor claim: EOR onboarding in 2-5 days; compliant contract generated in ~5 minutes
Certifications
SOC 2, GDPR
Support
24/5
What stands out
Transparent flat pricing: EOR $399/employee/mo, contractor $35/contractor/mo, no onboarding/offboarding fees
Broad 180+ country coverage with strong Africa/MENA reach
Fast self-claimed onboarding (2-5 days) and well-reviewed dedicated CSM/ESM support
Not a fit for
enterprises needing deep HRIS/finance integrations
buyers needing a dedicated Contractor of Record product
A long-running (2015) direct-entity EOR — broadest owned-entity claim (160+ countries), a capped misclassification-protection AOR product, but no Contractor of Record and thin independent review volume.
7.7/10
★ 4.2 · 101 reviews
EOR price
From $599/mo per employee
Coverage
160+ countries
Entity model
no partners
Time to hire
Vendor claims conflict: 'days' vs '2 weeks'; no SLA
Certifications
ISO 27001, ISO 27017, ISO 27018, GDPR
Support
24-hour support team (vendor claim); 15+ languages
What stands out
160+ countries with owned legal entities and no third-party partners — the widest such claim reviewed
Transparent, publicly listed pricing for both EOR ($599/employee/month) and AOR ($199/contractor/month)
AOR ships with a capped, quantified Classification Protection benefit ($100k/contractor/month, $1M aggregate per client)
Not a fit for
buyers needing a true Contractor-of-Record product, not an authorized-agent AOR
companies with their own local entities needing standalone global payroll
A global hiring platform (now a Payoneer company) covering 160+ countries across EOR, Agent of Record and contractor management, with rare published starting prices — strong for buyers who want transparent entry pricing and broad coverage in one tool.
8.0/10
★ 4.6 · 312 reviews
EOR price
Starting from $199 per employee/month
Coverage
160+ countries
Time to hire
Not publicly stated
What stands out
broad coverage: 160+ countries for EOR and contractors
published starting prices (EOR $199, AOR $99, CMS $19 per month)
payroll in 70 currencies
Not a fit for
buyers who require named security certifications (SOC 2/ISO 27001) published before purchase
buyers needing a dedicated Contractor of Record product
A young but fast-growing global-employment platform (180+ countries) with a real owned-entity core (38 entities), transparent flat pricing and standout human support. Best for SMBs — especially European — that value hands-on support and predictable pricing over deep automation.
7.6/10
★ 4.4 · 391 reviews
EOR price
From ~€299 per employee/month (varies by country/headcount)
Coverage
180+ countries
Entity model
38 owned
Time to hire
Vendor claim: ~48 hours in standard markets, same-day in some; longer in complex jurisdictions
Certifications
SOC 2 Type II, ISO 27001, GDPR
Support
24/7
What stands out
Broad 180+ country reach with a real owned-entity core (38 entities), not pure-partner
Transparent flat pricing; no setup/offboarding fees or annual lock-in
Fast onboarding (~48h standard) and strongly-rated 24/7 human support
Not a fit for
enterprises needing deep HRIS/finance integrations and advanced analytics
A budget-friendly, transparently-priced EOR with broad headline coverage (185+ countries) and a free contractor-management tier. Strongest for cost-conscious teams that want published prices up front rather than a sales quote.
7.8/10
★ 4.4 · 440 reviews
EOR price
Starts at $199 per employee/month
Coverage
185+ countries
Time to hire
Vendor claim: 1-3 days in most locations once documentation and contracts are approved
Certifications
ISO 27001, SOC 2 Type II, GDPR
Support
24/5 customer support; 24/7 for hiring managers and global employees
What stands out
Transparent published pricing: EOR from $199/employee/month, free contractor tier, $25/mo premium contractor tier
Broad headline coverage: EOR in 185+ countries, contractors in 150+, visas/work permits in 110+
Stated no setup fees, minimum contracts or termination fees
Not a fit for
buyers needing a dedicated Contractor of Record product
enterprises requiring extensive compliance attestations beyond ISO 27001 / SOC 2 Type II
A profitable, VC-free global-employment company that rebranded from Horizons in 2026, with strong G2/Capterra scores — but a split brand identity and no disclosed owned-vs-partner entity count.
7.8/10
★ 4.6 · 495 reviews
EOR price
From $199/mo per employee
Coverage
150+ countries
Time to hire
Local contracts in 24-48 hrs; up to 2-4 weeks elsewhere
Certifications
SOC 2 Type II, ISO 27001, GDPR
Support
Business hours; avg response <2hrs (top tier)
What stands out
Founded 2018 and profitable without VC funding - a longer, more stable track record than several younger rivals
Consistently high G2 (4.7/334) and Capterra (4.9/72) scores
Widest product range reviewed here: EOR, COR, contractor management, global payroll, US PEO, recruitment, incorporation
Not a fit for
buyers wanting a single, unchanging brand name and URL for contracts
teams that require a disclosed, numeric owned-vs-partner entity split before signing
buyers wanting a single, unchanging brand name and URL for contracts
What it costs to employ someone in Iceland through an EOR
The examples assume a full-time office employee on a monthly salary, 2026, no collective-agreement pay above the contract and no size-based relief (none applies to tryggingagjald). Gross pay is ISK 6,100,000 and ISK 12,200,000 a year, about USD 50,000 and USD 100,000 at the Central Bank of Iceland rate of 1 USD = ISK 122.08 on 2026-10-10: ISK 6,100,000 = USD 49,967 and ISK 12,200,000 = USD 99,934 (cb.is, checked 2026-10-10). Rates have no ceiling, and holiday pay of 10.17% or more is assumed to sit inside the stated gross.
Employer statutory cost only, before the EOR’s own fee. The December supplement (ISK 114,000) and holiday supplement (ISK 62,000) are not included in the cost; they are assumed to sit inside gross pay. Union-fund rates are SA-VR’s and may differ for other unions. Source: Skatturinn RSK 6.01 and SA-VR agreement, checked 2026-10-10.
Gross salary
Employer statutory cost
Components
ISK 6,100,000/year
ISK 1,183,400 (19.40%)
Tryggingagjald 6.35% = 387,350; employer pension 11.5% = 701,500; union funds 1.55% = 94,550 (sickness 61,000, holiday-home 15,250, training 18,300)
ISK 12,200,000/year
ISK 2,366,800 (19.40%)
Tryggingagjald 774,700; employer pension 1,403,000; union funds 189,100 (sickness 122,000, holiday-home 30,500, training 36,600)
History. Tryggingagjald plus employer pension on ISK 6,100,000 came to ISK 1,073,600 in 2021 and ISK 1,088,850 in 2026, a rise of 1.4%: the levy went from 6.10% to 6.35% in 2022 and the pension stayed at 11.5%. The history has no union-fund payments, because their 2021 to 2023 rates were not verified, so these totals sit below the ISK 1,183,400 above. With a rise under 5%, we’ve skipped a history chart (skatturinn.is, 2026 notice, checked 2026-10-10).
Not included: the optional 2% supplementary-pension match, the accident, death and disability insurance premiums the agreements require (rate not found) and the EOR fee.
The EOR’s own fee comes on top, in USD per month. Iceland-page prices: Playroll from $399 and Deel from $599 (management fee). Global or site-wide prices: Skuad, RemoFirst and Remote People from $199, Rivermate $319 to $639, Atlas HXM from $599 and Remote $699. G-P publishes no price for Iceland.
Hidden costs, where published: Playroll says it requires a fully refundable security deposit equal to one month’s salary per employee, a vendor claim on its global pricing page (playroll.com, checked 2026-10-10). For the other providers, setup fee, deposit, minimum term and termination fee are not published for Iceland. Treat a blank as unpublished, not zero.
When you don’t need an EOR
A role that is employment should not be relabelled as a contract. Temporary permits for an employer without an Icelandic branch are limited to service contracts and collaboration agreements, and whether an Icelandic EOR can sponsor a permit is not stated in our sources. Source: Act 139/2005 and Foreign Nationals’ Right to Work Act, checked 2026-10-10.
A genuinely independent contractor. If the person sets their own hours and tools and can serve other clients, a contract is closer to the real relationship. See how to pay contractors in Iceland and our hiring guide. Directing the person like staff while calling them a contractor raises contractor misclassification risk.
What the Tax Authority expects from the self-employed. A sole proprietor reports calculated remuneration (reiknað endurgjald) for their own work, taxed like wages, and the Tax Authority sets minimum reference amounts. For group A, which includes IT specialists, A(6) working alone is ISK 17,280,000 a year, A(5) is ISK 20,148,000, and the first-year start-up level A(9) is ISK 14,388,000. A lower figure needs written justification and the Tax Authority may accept it (island.is, rules 1558/2025, checked 2026-10-10).
Your own Icelandic entity. This avoids the agency question but not the collective-agreement floors. Playroll’s compliance page estimates 4 to 8 weeks to set one up and ISK 50,000 to 150,000 a month for accounting; these are vendor estimates (playroll.com, checked 2026-10-10). See permanent establishment.
A PEO. We found no Iceland-specific PEO information; Remote People’s page lists “EOR or PEO”. See the PEO glossary entry and EOR vs PEO.
What changed in 2026
2026-01-01: collective-agreement pay rise under the 2024 to 2028 SA agreements, 3.50% or at least ISK 23,750 a month; the December supplement is ISK 114,000 for 2026 (vr.is, checked 2026-10-10).
2026-01-01: tryggingagjald unchanged at 6.35% (skatturinn.is, checked 2026-10-10).
2026-01-01: income-tax bracket limits and the personal credit rose 5.5%, rates unchanged; the personal credit is ISK 869,898 a year and the weighted average municipal tax stays at 14.94% (stjornarradid.is, checked 2026-10-10).
2026-04-01: new SA-Efling pay table; the lowest grade starts at ISK 476,379 a month, up from ISK 476,093 (Efling table, checked 2026-10-10).
2026-05-01: holiday supplement of ISK 62,000 for the leave year from 1 May 2026; longer-service leave tiers of 26, 28 and 30 days apply to leave taken that year (vr.is, checked 2026-10-10).
2025-01-01: the latest dated amendment to the Act on Temporary Work Agencies in the consolidated text; the text now names Vinnueftirlit rikisins as supervisor and register keeper. We did not read the amendment, and the date supervision changed is not confirmed (althingi.is, checked 2026-10-10).
Numbers vendors haven’t updated
Employer cost. Statutory levy and pension plus union funds are 19.40% of gross in our model. Deel’s Iceland page estimates 22.60%: provident fund 11.5%, pension 2.0%, insurance fund 6.92%, sickness fund 1.0%, training fund 0.3%, union summer house 0.25%, recreational fund 0.1% and an administration fee of 0.60%. The Tax Authority’s 2026 notice gives tryggingagjald at 6.35%, and our total leaves out the optional 2% pension match (deel.com, skatturinn.is, checked 2026-10-10).
Working week. Statute allows 40 daytime hours; the SA-VR office-worker agreement sets 35.50 active hours, or 36.75 with breaks. Deel gives 36.75 hours for its EOR employees; Rivermate’s summary says 36 hours and its text 40 (deel.com, rivermate.com, checked 2026-10-10).
Annual leave. Statute gives 24 working days. RemoFirst’s guide gives 24, 27 after 5 years and 30 after 10; the SA-VR tiers are 26, 28 and 30 days after 5 years in the trade, 4 and 6 years in the company (remofirst.com, vr.is, checked 2026-10-10).
Public holidays. Remote and RemoFirst give 16, matching the government job portal (work.iceland.is, checked 2026-10-10).
How we built this page
Facts were collected and checked on 2026-10-10 against Althingi’s consolidated statutes, the Tax Authority’s 2026 employer notice, the SA-VR and SA-Efling collective agreements, the Central Bank of Iceland and the government’s work-permit legislation. Company details come from Skatturinn’s company register, read through a text proxy because direct requests were rate limited, and from Vinnueftirlit’s list of agencies on island.is; elsewhere we rely on vendors’ own statements. Vendors are ordered with a stated own entity first, then those that don’t disclose, and within a group by Iceland-page price and completeness of data; no vendor pays for placement.
Frequently asked questions
How much does an Employer of Record cost in Iceland?
Two layers. Employer statutory cost is 19.40% of gross: ISK 1,183,400 on an ISK 6,100,000 salary and ISK 2,366,800 on ISK 12,200,000 (6.35% tryggingagjald, 11.5% employer pension, 1.55% union funds). The EOR fee is on top: $399 to $599 per month where a vendor shows an Iceland price, and $199 to $699 on global lists. The December and holiday supplements are not in these totals.
Is Employer of Record legal in Iceland?
It is a grey area. Iceland has no EOR law and no EOR licence. The nearest regime is the Act on Temporary Work Agencies (139/2005), where registration is a notification to Vinnueftirlit rikisins, not a licence. No source we read says whether an EOR with a remote hire for a foreign client falls under it, and we found no law-firm or authority analysis.
What are the risks for a client using an EOR in Iceland?
If the arrangement counts as agency leasing, the client is a user company, jointly liable for the EOR's unpaid minimum pay and payroll charges; claims must reach it within four months, which a court may extend to twelve. It must also ask the agency for written confirmation of registration. Fines for a non-compliant agency reach ISK 1,000,000 a day.
Which EOR in Iceland owns its entity?
Of the 9 providers, Remote is the only one that says so: it states that it owns its legal entity in Iceland, its Local Terms name Remote Technology Iceland ehf., and the company register has the entity. For the other 8 the vendor names no Icelandic entity, though the register lists companies carrying the Deel and Globalization Partners names.
What is the cheapest EOR in Iceland?
Among prices on an Iceland page, Playroll is lowest at $399 per month, then Deel from $599. Global lists go lower: Skuad, RemoFirst and Remote People from $199. Price says nothing about the legal basis, so ask who employs your hire and whether the entity is registered as an agency.
Can an EOR in Iceland sponsor a work permit?
Not confirmed. A non-EEA hire needs a work and residence permit tied to one employer. An employer without a branch in Iceland gets temporary permits only under service contracts or academic collaboration agreements, and whether an Icelandic EOR can be the sponsoring employer is not stated in the sources we read.
Should I hire a contractor instead of using an EOR in Iceland?
If the person works independently, yes: see [how to pay contractors in Iceland](/software/contractor-payouts/iceland/) and [our hiring guide](/hire-contractors/iceland/). Note the Tax Authority expects a minimum reference remuneration from the self-employed, ISK 17,280,000 a year for an IT specialist working alone. See also [EOR vs PEO](/blog/eor-vs-peo/).
Where to go next
These platforms head to head
The full listings
Hiring contractors in Iceland instead
Employer of Record in other countries
Sources
The vendor pages every fact came from, with the date each was checked.
9 platforms tracked in this category. Every fact in the entries above comes from the vendor's own pages — each carries a footnote with the source and the date we checked it, and where a vendor publishes nothing we leave the field out rather than guess. Scores are ours and are not for sale. Full methodology · Report an error
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