Maternity and paternity leave is a leave of absence from paid employment acquired at the birth of a child, primary adoption of a child under eight years of age, or the permanent foster care of a child under eight years of age.
Each parent might have the right to 6 months of leave, at the most. Both parents may have rights to 12 months of leave, in total.
The requirement is to have worked in Iceland continuously for for the last six months before the date of birth, in a minimum of 25% employment.
Informing your employer: 8 weeks before expected due date
Employers have the right to know about planned leave 8 weeks before the expected due date, according to law.
When an application is sent through Ísland.is, the employer receives an email that is also a notification of the planned taking of maternity and paternity leave.
The employer does not have to agree to a period of leave immediately, but has time to think about it or comment.
Applying: 6 weeks before expected due date
Parents are encouraged to apply 6 weeks before the expected due date, as the processing of applications can take 2-5 weeks.
When a child is adopted or taken into permanent foster care, the date of arrival in the home is used instead of the expected date of birth.
It usually takes 2-5 weeks to process an application. If supporting documents are missing, it may take longer.
Application status
If an applicant does not receive an email, the application is still being processed. If further information or supporting documents are needed, the applicant will receive an email from the Maternity and Paternity Leave Fund.
Application has been processed
Letter of rights. Parent is sent a letter of rights by email.
Payment plan. When the child is born, the applicant receives a payment plan by email.
Payment is made on the last working day of the month.
Example: A parent who starts leave in January will receive payment on the last working day in January.
The correct payments
It is important to inform about changes in income and payments by sending an email to: faedingarorlof@vmst.is. Otherwise, a parent may receive the wrong amount and must pay back the difference, with a 15% levy.
If a period is to be changed or a new one is registered, the parent uses the same application as was sent to apply originally. The application is on My Pages at Ísland.is. A new application should not be created.
Using your personal tax credit
Wage earners can use their personal tax credit to lower the income tax withdrawn from their salaries. This tax credit can be used during maternity and paternity leave.
80% of the average total wages, over a certain period, is the monthly payment during maternity and paternity leave.
The maximum payment is 700,000 ISK per month. This means no one receives a higher payment than this.
Labour market rights
Maternity and paternity leave is a part of the period of employment when various work-related rights are assessed.
Examples of work-related rights are the right to take or extend holidays under collective agreements, the right to increase the age of employment, the right to sick leave, and the right to unemployment benefits.
Employment of the parent remains unchanged during the maternity and paternity leave. The employee shall have the right to return to their job. If this is not possible, the parent is entitled to a comparable job with the employer in accordance with the employment contract.
An employee may not be terminated because the person concerned has notified of the planned taking of maternity and paternity leave, or is on leave, unless there are valid reasons. A written justification must be made by the employer. The same applies to terminations of employment by a pregnant parent and a parent who has recently given birth.
Maternity and paternity grant
Parents who are studying, are not employed, or in employment of less than 25% may be entitled to a maternity and paternity grant.
