Working in Europe | Unemployment | Iceland

Employees and self-employed individuals aged 18-70 are entitled to receive unemployment benefit providing that they have earned insurance cover and meet the conditions of the Unemployment Insurance Act and the Labour Market Measures Act; these include the following:

  •          Being unemployed.
  •          Being domiciled in Iceland, and being in the country.
  •          Actively seeking employment.
  •          Being fit for work.
  •          Prepared to take any job.

To apply for unemployment benefit, you should register on the first day that you are without a job (full employment or part-time) and you are starting to look for new work. You will then be paid unemployment benefit from the date when you first register. You apply for unemployment benefit on the internet, on the website of the Directorate of Labour (Vinnumálastofnun; VMS).  


Basic unemployment benefit payments are calculated follows:

  • Unemployment benefit is ISK 202.054per month (100% entitlement).
  • Unemployment benefit is ISK 151.541 per month (75% entitlement).
  • Unemployment benefit is ISK 101.027 per month (50% entitlement).
  • Unemployment benefit is ISK 50.514 per month (25% entitlement – minimum entitlement).

ISK 7.368 is paid each month for each dependent child under the age of 18 for whom the recipient is responsible. (This is 4% of full basic unemployment benefit).

Income-related amounts

Unemployment benefit will be paid at the basic rate for two weeks following your first registration, after which income-related amounts take effect.

  • The maximum of income-related unemployment benefit is ISK 290.366 per month.
  • Income-related amounts are calculated as follows:

    Wage-earners: Income-related unemployment benefit is 70% of your average gross income, based on the six-month period ending two months before you became unemployed.

    Self-employed individuals: Income-related unemployment benefit is 70% of your average gross income, based on the income year preceding the year in which you become unemployed.

    Your benefit entitlement: The amount of income-related benefit also depends on your benefit entitlement. For example, if you have maximum income-related benefit, but only 50% benefit entitlement, then the maximum amount you can receive is 50% of ISK 281.909, i.e. ISK 140.955.


  • Your right to receive income-related unemployment benefit is valid for 3 months from the beginning of thebenefit period, providing you meet the requirements.
  • If a waiting period is imposed on your unemployment benefit, you will not be entitled to income-related benefit.
  • Applicants only have the right to receive income-related benefit once in each benefit period, this being at the beginning of the period.