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 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 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.
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 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 debt 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 January 1st 2025. They are determined by law each year.
