Individuals with a student residence permit do not automatically have the right to work in Iceland, although there are certain situations where an individual may be able to apply for a work permit. Please contact the Directorate of Labour (IS Vinnumálastofnun) or the Icelandic Directorate of Immigration for further information.

Income Tax

Everyone working in Iceland must pay taxes. The taxation system in Iceland is a PAYE system (Pay-As-You-Earn). Employers are required to calculate and withhold taxes from all salaries and wages paid to employees. To receive a tax card, go to your local or inland tax office. You can find their addresses at the Internal Revenue’s website (IS Ríkisskattstjóri)

Applicants must have an Icelandic ID number (IS kennitala), and be prepared to show personal identification with a picture. In order to have the right amount of tax deducted, you have to give your employer your tax card. The student is obliged to file a tax return with the IRO no less than one week before the student’s departure.

For further information on this matter, contact the Directorate of Labour, Tryggvagata 17, vinnumalastofnun@vmst.is, tel. +354 515 4800.