All amounts listed below are calculated before tax.
Basic unemployment benefits
ISK 383.870 per month based on 100% right to benefits.
ISK 287.903 per month based on 75% right to benefits.
ISK 191.935 per month based on 50% right to benefits.
ISK 95.968 per month based on 25% right to benefits. This is the minimum entitlement.
Child support
ISK 15,355 per month are paid for each child under 18 years of age. provided that the applicant is responsible for the child’s support.
Income-related benefits
ISK 605.159 per month is the maximum amount of income related unemployment benefits. For the first two weeks, basic unemployment benefits are paid then the benefits are income related for three months. Income related benefits are only paid once in each 30 month benefit period.
No one can receive higher payments than this amount, no matter how high the 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. However, the amount will never exceed ISK 605.159 per month.
To calculate the income, an 8-month period is reviewed retrospectively from the date the application is submitted. The most recent 2 months are not included in the calculation.
Income-related unemployment benefits for self-employed individuals are 70% of the average total income, based on the income year preceding the year in which the applicant became unemployed.
Income threshold
The income threshold indicates how much a person may earn per month before unemployment benefits are reduced. ISK 94.487 kr. is the income threshold.
December bonus
Amount
The maximum amount is ISK 109.469 It is never less than ISK 27,367.
Tax is paid on the December bonus.
Conditions
Confirm job search between 20 November and 3 December in 2025.
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 2025 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 ISK.43,787
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 32,840
Personal tax credit
ISK 72.492 is the personal tax credit amount for the year 2026. 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 unemployment benefits that are too high, they must repay the excess amount to the Unemployment Insurance Fund. This is usually because income was higher than stated in the application or in the information registered on My Pages. All income must be reported on My Pages of the Directorate of Labour.
Overpaid unemployment benefits are collected as follows:
When an individual is receiving unemployment benefits:
The individual receives a notification on My Pages or by letter.
25% of the debt is deducted from each monthly payment.
When an individual is not receiving unemployment benefits:
A collection letter is sent to the individual’s mailbox on island.is.
The debt is sent to the Collection Center in Blönduós (the District Commissioner of Northwest Iceland). A claim is created in the individual’s online bank.
Collection
It is possible to apply for a payment arrangement with the District Commissioner.
If the claim is not paid within 30 days after the collection letter has been sent, and no agreement is made, a payment request is issued by a process server.
Appeal of a decision
Decisions by The Directorate of Labour regarding refunds of overpaid unemployment benefits are enforceable. This means enforcement action may be taken to recover the claim.
An administrative appeal does not suspend the legal effect of collection measures, except that enforcement is postponed until a ruling has been issued by the Welfare Appeals Committee.
