Child benefits

Child Benefits

Child benefits are paid to parents or other legal guardians for each dependent child up to the age of 18.

Child benefits are income-tested and are calculated based on the income reported in the tax return, including capital income and foreign income.

Child benefits are available to individuals who support children and reside in Iceland for the majority of the year. The child must be registered as residing with the parent or guardian at the end of the year.

Payment Dates

Child benefits are paid four times a year:

• 1 February – advance payment

• 1 May – advance payment

• 1 June – assessed child benefit payment

• 1 October – assessed child benefit payment

The first two payments of the year are based on an estimate. Following the annual tax assessment (processing of the tax return), the remaining calculated child benefits are paid in two installments.

If your circumstances have changed, you may request a correction to the information used in the calculation.

Age of the Child

An additional child benefit is paid for children under seven years of age during the income year. This additional benefit is also income-tested.

Child benefits are first calculated as part of the annual tax assessment in the year following the child's birth. However, part of the benefit is paid in advance during the year of birth based on an estimate. See Child Benefits in the Year of Birth for further information.

Child benefits are calculated for the last time in the year in which the child reaches 18 years of age.

Eligibility and Calculation

Individuals are entitled to child benefits in Iceland if they support a child and are resident or domiciled in Iceland, or stay in Iceland for more than 183 days during a 12-month period. Exceptions may apply to children residing outside Iceland but within the European Economic Area (EEA).

Only the persons who support the child are entitled to receive child benefits.

• The child must be registered in the National Registry as living at the same address as the person providing support at the end of the year, unless a shared residence agreement has been registered with the District Commissioner.

• It does not matter if the child was not supported by the same person throughout the entire year.

• Individuals who pay child support are not regarded as the person providing support for the purposes of child benefits.

Income-Based Calculation

Child benefits are income-tested and calculated based on the income reported in the tax return. See Child Benefit Amounts for further information.

Capital income and foreign income are included in the child benefit calculation. This also applies to salaries from international organisations that are exempt from taxation.

You can view the information used to calculate your child benefits through Skatturinn's service portal under the "Samskipti".

A child benefit calculator is also available on Skatturinn's website.

Family Circumstances

Family status is determined based on the information recorded in the National Registry on 31 December of the preceding year.

Child benefits are divided equally between spouses and are calculated based on their combined income as reported in their tax returns.

The same applies to:

• cohabiting partners who meet the conditions for joint taxation at the end of the income year, and

• individuals who share a household with their child, even if they do not meet the requirements for registration as cohabiting partners.

Parents of Children With Shared Residence Arrangements

Parents who have entered into a shared residence agreement for their child with the District Commissioner may each be entitled to child benefits.

Child benefits are calculated automatically for both parents, provided that a valid shared residence agreement has been registered with the District Commissioner by the end of the year. No separate application to Skatturinn is required.

For children with shared residence arrangements, child benefits are calculated separately for each parent based on that parent's income and family circumstances.

As a result, the amount of child benefits may differ between the two parents, and it is possible for one parent to receive child benefits while the other receives none.

A shared residence agreement ceases to be valid if one of the parents moves out of Iceland.

Child Benefit Advance Payments

The final child benefit calculation is not available until the annual tax assessment is completed at the end of May, after the tax return has been processed. For this reason, the first two child benefit payments each year are based on an estimate and are treated as advance payments.

The estimate is based on withholding tax information and information from the previous year's tax return. The withholding tax reference period runs from November to November.

For example, for child benefits paid in 2027:

• The final amount of child benefits is based on the 2026 income year.

• The number of eligible children is based on the family's circumstances as at 31 December 2026.

• The first two payments of the year (advance payments) are based on the available income information (from

  November 2025 to November 2026) and information from the 2025 tax return.

• Once the 2026 tax return has been processed, the final child benefit amount is calculated and determines the last two payments of the year.

Advance payments are not made if there is insufficient information to calculate child benefits, for example if the previous year's tax return has not been submitted. In such cases, a separate application for advance child benefit payments must be submitted.

If your circumstances differ from the information used in the calculation, you may request an adjustment to your advance child benefit payments.

See Corrections to Child Benefit Calculations for further information.

Moving To or From Iceland

Individuals who move to or from Iceland during the year receive child benefits in proportion to the time they have resided in Iceland.

This does not apply to students living abroad who have applied to retain their tax rights in Iceland. They are entitled to child benefits in Iceland to the extent that the Icelandic child benefits exceed any child benefits or comparable payments received from abroad.