With the recruitment grant, employers can increase job opportunities in the labour market for job seekers registered with the Directorate of Labour.
Amount of grant
ISK 428,015 per month is the amount an employer can receive for a new employee. This corresponds to 100% of the basic unemployment benefits plus an 11.5% pension fund contribution, for up to 6 months.
The employer must meet the following conditions:
An application for a hiring grant must be submitted and the position registered before the employee begins work.
The hiring grant must result in an increase in the number of employees at the relevant company, institution, or non-profit organization; the individual must be hired as a salaried employee.
At least one employee must already be on the payroll of the relevant company, institution, or non-profit organization before applying for the hiring grant.
The relevant company, institution, or non-profit organization must not have laid off an employee in the past six months who performed the same job as the position to be filled.
The job seeker must not have performed the same job at the relevant company, institution, or non-profit organization within the past 12 months.
The company, institution, or non-profit organization must be compliant with payments of wage-related and public charges, such as pension fund premiums and contributions, union dues, and insurance tax.
Jobseekers must meet the following conditions:
Be insured under the Unemployment Insurance Act and be receiving unemployment benefits when participation in the measure begins.
Have been actively seeking employment and registered as unemployed with The Directorate of Labour for at least three months following job loss.
The employer applies for a hiring grant and registers the position on the Employers’ My Pages portal.
An application for a hiring grant and registration of the position must be completed before the employee begins work.
A copy of the signed employment contract between the employer and the employee must be submitted, meeting the provisions of the applicable collective agreements.
The maximum duration of the agreement is 6 months.
As a general rule, a 100% full-time position is assumed in cases involving a hiring grant.
The hiring grant agreement and the payments under it become invalid if the job seeker leaves their position with the employer for any reason during the validity period of the agreement.
The period during which a hiring grant is in effect with an employer does not count toward the qualification period for unemployment benefits.
The job seeker is removed from the unemployment register from the date of hiring.
The amount of payments to a company is based on how long the job seeker has been registered:
If a job seeker has been registered for 3 to 6 months, the employer receives 50% of the basic unemployment benefits, plus an additional 11.5% pension fund contribution as a grant.
If a job seeker has been registered for 6 months or longer, the employer receives 100% of the basic unemployment benefits, plus an additional 11.5% pension fund contribution as a grant.
Examples:
A job seeker who has been registered for 4 months:
The monthly grant amounts to ISK 214,008, based on 100% employment.
A job seeker who has been registered for 7 months:
The monthly grant amounts to ISK 428,015, based on 100% employment.
Payments may be claimed monthly or as a lump sum at the end of the period. The employer applies for payment of the grant through the Employers’ My Pages portal. A condition for payment from The Directorate of Labour is that wages have been paid and that all wage-related charges have been paid to the tax authorities (Skatturinn). Each application must be accompanied by a payslip for the relevant month being claimed.
When national unemployment, or unemployment in a specific region, exceeds 6.5%, the payment criteria for hiring grants change.
If a job seeker has been registered as unemployed for 1 month or longer, the employer receives 100% of the basic unemployment benefits, plus an additional 11.5% pension fund contribution as a grant.
The employer applies for payment of the grant through the Employers’ My Pages portal. A condition for payment from The Directorate og Labour is that wages have been paid and that all wage-related charges have been paid to the tax authorities (Skatturinn). Each application must be accompanied by a payslip for the relevant month being claimed.
For job seekers
The recruitment grant agreement and the payments under it become invalid if the job seeker leaves their position with the employer for any reason during the validity period of the agreement.
The period during which a recruitment grant is in effect with an employer does not count toward the qualification period for unemployment benefits.
The job seeker is deregistered from the unemployment register from the date of hiring.
Read more
Recruitment grants are covered in Article 3 of Regulation No. 935/2025 on labour market measures.
For further information, please email: vinnumidlun@vmst.is
