Parents may be entitled to parental leave when their child is born, adopted or becomes a permanent foster child.
Each parent has the right to 6 months of parental leave and the total rights of two parents are therefore 12 months.
The requirement is to have worked in Iceland continuously for the last 6 months before the date of birth of the child, at least 25% of the work rate each month.
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Wage earners can use their personal tax credit to lower the income tax withdrawn from their salaries.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.
You can calculate your potential payments during parental leave: Open calculator
80% of the average total wages over a certain period is a monthly payment during maternity leave.
A maximum payment of ISK 700,000 per month is allowed. No one can receive more than this amount during parental leave, no matter how high the salary the person concerned had.
A minimum monthly payment of ISK 222,494 is for a parent working 50-100%.
Parental leave is a part of the length of service when various work-related rights are assessed. Examples of work-related rights are the right to take leave and extend the period of leave under collective agreements, the right to increase the age of employment, the right to illness, the right to notice 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.
Birth grant
Parents who are studying, are not employed or work in a work-rate of less than 25% may be entitled to parental grants either for students or for parents who are not working.
