Tax payments for children and teens

For tax purposes, a person considered an adult the year they turn 16.

In the 2026 tax year, individuals born in 2011 or later are considered children.

Turning 16 years old

The year you turn 16 the same rules apply to you as to adults regarding the personal tax credit and tax brackets.

You can therefore use the full personal tax credit from 1 January, which is currently 72.492 ISKper month.

Personal tax credit

If you do not use your personal tax credit each month, it will accumulate and you can use it later in the year, for example to offset withholding tax on summer wages. In that case, you must make sure to inform your employer that you have accumulated personal tax credit.

If you have high income for a short period of time, such as from a summer job, you may pay withholding tax on some wage payments and still have unused personal tax credit at the end of the year. Any overpaid tax will then be refunded in June of the following year, after you have filed your tax return and the income year has been settled.

On Skatturinn's service portal, you can see your wage payments and how your personal tax credit has been used. It is best to check this after the 17th of each month, once all information from employers has been received.

In special cases, it is possible to apply for an earlier refund, including for students.

The personal tax credit of young people cannot be used by others (for example, parents).

Filing your first tax return

You must file your first tax return in the year you turn 17.

A tax return is a summary of the previous year that affect your tax assessment, such as wage income, interest income, various assets, purchases and sales of assets, and liabilities.

The tax return must be filed in March each year, regardless of whether you had any income or not.

The tax assessment is the final settlement of taxes payable for the previous year and is based on the tax return. The assessment is completed at the end of May each year, when it becomes clear whether you need to pay additional tax or will receive a refund.

Children's tax rate

Children do not pay tax on income (wages) up to 300.000 ISK per year. This is called the tax-free allowance.

For income above 300.000 ISK per year, a tax rate of 6% applies.

(The tax consists of 4% income tax paid to the government and 2% municipal tax paid to the local municipality.)