All amounts listed below are calculated before tax.
Basic unemployment benefits
ISK 364.895 per month based on 100% right to benefits.
ISK 273.671 per month based on 75% right to benefits.
ISK 182.447 per month based on 50% right to benefits.
ISK 91.223 per month based on 25% right to benefits. This is the minimum right.
Child support
ISK 14.595 per month is paid for dependent children younger than 18 years of age.
Income related benefits
ISK 575.246 per month is the maximum amount of unemployment benefits. No one can receive higher payments than this amount, no matter how high a salary was.
Applicants who are subject to a waiting period at the start of a period are not entitled to income related unemployment benefits.
Income-related unemployment benefits are 70% of the average total wages. The maximum amount is still 575.246 ISK per month.
To calculate, an 8-month period is checked from the date of application. The last 2 months are not taken into account.
Income-based unemployment benefits for self-employed are 70% of the average total wages and are based on the income year preceding the year in which the applicant became unemployed.
Income limit
ISK 89.817 kr. is the income limit. An income limit determines how high a salary can be earned before it affects the amount of unemployment benefits.
Unemployment benefits are reduced by half of the income that exceeds the income limit.
Example 1
A person has 100,000 ISK in income before tax. The calculation is then as follows:
364,895 ISK, which is 100% unimpaired benefits, plus 100,000 ISK totals 464,8951 ISK.
ISK 349,851 + the maximum free income of ISK 89.817 , totals ISK 454.712
ISK 464,895 – ISK 454,712 is a total of ISK 10,183 krónur. Half of that amount is ISK 5,091The reduction in benefits is then ISK 5,091.
Example 2
The average income per person is ISK 113,458.
The maximum free income limit of ISK 113,458 - ISK 89,817 totals ISK 23,641
The decrease is then ISK 23,641 divided by two, which is ISK 23,641
December bonus
Amount
The maximum amount is ISK 104,955. It is never less than ISK 26,239.
Tax is paid on the December bonus.
Conditions
Confirm job search between 20 November and 3 December in 2024.
Be insured under the unemployment insurance law during the month of November.
To be eligible for full December benefit, a jobseeker must have been registered as unemployed for 10 months or more in 2024 and be eligible for full benefits.
A person seeking work who does not have full benefits and has been registered as unemployed for 10 months or more receives a proportionate amount of compensation in accordance with their right to unemployment benefits.
A person seeking employment who has been registered as unemployed for less than 10 months receives a disproportionate December allowance based on the number of months he has been registered and in accordance with his or her right to benefits.
Less than 10 months in the register:
If you have been registered for 4 months and have a 100% benefit, you have the right to receive a 40% December bonus or 41,982 ISK.
If you have been registered for 6 months and have a 50% benefit, you have the right to receive a 30% December benefit or ISK 31,486.
Personal tax credit
ISK 68.691 is the personal tax credit amount for the year 2025. A personal tax credit can be used to reduce income taxes on wages and pensions. If you want to change the use of the personal tax credit, you can contact the Directorate of Labour.
Overpaid unemployment benefits
If an individual receives too much in unemployment benefits, the amount must be paid back. Usually, the income was higher than the amount that was estimated by the applicant.
All income must be reported on My pages.
Overpaid unemployment benefits are collected as follows:
Refund:
You can pay off a debt with Vinnumálastofnun by transferring it to the following bank account:
Bank: 0160-26-004404, kt. 440407-0640
Note that if payment is not executed from the debtor's account, the debtor's ID number must be included in the explanation.
The applicant will continue to receive unemployment benefits:
The applicant is informed of the decision of the Directorate of Labour and the amount of overpaid unemployment benefits on my pages or by letter.
Overpaid unemployment benefits are offset against the same person's subsequent unemployment benefits amounting to 25% of the subsequent unemployment benefits each month.
Applicants who do not receive unemployment benefits:
If the applicant deregisters from the unemployment register, the remaining debt due to overpaid unemployment benefits is collected according to the above.
The applicant is informed of the decision of the Directorate of Labour and the amount of overpaid unemployment benefits with a 15% levy by sending a collection letter.
The burden shall be waived according to Article 39 (2) of Act No. 54/2006, if the insured would argue that he will not be blamed for the deficiencies that led to the decision of the Directorate of Labour.
If the applicant does not meet the payment requirement of the Directorate of Labour, the case is sent to the District Commissioner’s Collection Centre in Blönduós for further collection.
The decisions of the Directorate of Labour on reclaiming overpaid unemployment benefits are enforceable. It should be noted that an administrative complaint does not delay the legal effects of the collection except to the extent that the enforceability is delayed until the Welfare Authority's ruling is available.
Payment distribution:
If payment distribution is required, the claim can be sent to the Collection Centre at Blönduós. The additional cost of the claim is not added when it is sent to the Collection Centre at Blönduós. Note that 30 days from the date of the collection letter or the penalty decision, the debt will be transferred there for further processing.
The amounts apply from 1 January 2025. They are determined by law each year.