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Cost of Living in Iceland

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Last updated in Nov. 2022. The original question is from Dec. 2015.

Q: I’ve recently been offered a job in Iceland and have been looking into the cost of living, which is quite high compared to many other European countries. Is a salary of ISK 700,000 (USD 4,800, EUR 4,600) a month enough to cover the basics?

Derek, Ireland.

A: According to Iceland Statistics, the average salary in Iceland is ISK 635,000 (US 4,370, EUR 4,200) before tax per month, so the offer you received is well above that. Income tax is 31.45% for income up to ISK 370,482. For income in the range ISK 370,483 to ISK 1,040,106, the tax is 37.95%, and for income above ISK 1,040,106, the tax is 46.25%. The personal tax-free allowance is ISK 53,916 monthly or ISK 646,993 annually. For more on taxation, visit skatturinn.is.

The average rent for a centrally located one-bedroom apartment in Reykjavík is ISK 185,000 (USD 1,270, EUR 1,220) per month. This website offers information on the cost of renting an apartment. The figures show the price per square meter in various parts of the country.

A single person can expect to spend ISK 195,000 (USD 1,340, EUR 1,290) a month on food, clothes, medical services, recreation, transport, communication, and other services. For comparable figures for families check this website.

Here is the website of Statistics Iceland that shows average household expenditure.

Based on these figures, you can accept the job offer, knowing that you’ll have more money to spare than the average person in Iceland.

VH

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