Bereavement leave

Amounts and calculations

The calculation of payments is based on information obtained by the Directorate of Labour on parents' income from tax returns, the cash register and the insurance premium register of tax authorities.

Work

The right to parental leave is created when the parent has worked in Iceland continuously for the last 6 months before the date of birth of the child, in at least 25% of the employment rate as a worker or self-employed person.

25% employment rate

Full-time employment is 172 hours per month, so 43 hours per month would generally be considered to be 25% employment. Full-time employment can however be defined differently in the collective agreement and the definition in the agreement is taken into account. Parents who are not employed or in less than 25% employment may be entitled to a maternity allowance.

Self-employed

Full-time employment of a parent working in his/her own business is based on the parent having paid monthly local tax and insurance premium on the calculated consideration or salary of a minimum threshold amount of the Directorate of Internal Revenue in the relevant profession or according to the collective agreement.

Apart from traditional work, participation in the labour market includes:

Working in another EEA country

Calculation

The monthly payment to a parent on grief leave is 80% of the average total wage over a certain period.

Payments will not exceed ISK 600,000 per month.

The calculation of payments is based on information on parents' income from tax returns, the cash register and the insurance contribution register of the tax authorities.

What period is the focus?

The calculation is based on a continuous period of 6 months in the Icelandic labour market which ends 2 calendar months before the loss of a child, stillbirth or abortion. It must not be less than 3 months in the calculation.

What is considered as salary?

The calculation includes wages and salaries from the Icelandic labour market, including the calculated remuneration. The condition is that the insurance premium has been paid on these payments.

Participation in the labour market

Other than wages and calculated remuneration, payments for other participation in the labour market are also included in the calculation. You can see what is considered participation in the labour market outside of traditional work here:

Minimum payments

• The monthly payment in a grief leave to a parent in a 25-49-year-old job is never less than ISK 160,538.

• The monthly payment in a grief leave to a parent working 50 - 100% is never less than ISK 222,494.

Taxes, other charges and the use of personalised discounts

• All payments from the Parental Leave Fund are subject to cash payment.

• During the leave, the parent pays a minimum of 4% of the leave payment to the pension fund and the Directorate of Labour a minimum of 11.5% of the contribution.

• Parents may contribute to the private pension fund, but the Directorate of Labour does not pay a counter contribution.

• Parents may pay to a union during the mourning period. It is good to note that rights with a union can lapse if payments to it stop.

Use of personalised discounts

You can use personal tax credits against deductions for cash taxes.

Study or work outside Iceland

Parents who have been in more than 10 ECTS studies and in less than 25% of their work, or who are working abroad, may be entitled to receive months excluded from the calculation and thus increase their payments. It is best to contact the Directorate of Labour for guidance if such circumstances apply: