One in ten Icelanders makes over $8,100 a month

According to a new report published by Statistics Iceland the average employed Icelander last year earned about $6,440 per month or 794,000 kr which makes around $77,250 for the whole year.

Half of Icelanders enjoyed a monthly income of between $4,620 and $7,360, using today‘s exchange rate, or $55,440 to $88,320 on an annual basis. According to Mbl.is the report notes that in 2020 salaries in the lowest decile rose at a quicker pace than did salaries in the highest decile. The lowest 10% of income earners saw their wages rise by 9.5% while incomes of the highest 10% rose by 5.1% on average.

The Sars-CoV-2 pandemic had the effect of raising the average salary nationwide as the contraction in the tourism industry disproportionately affected those in on the lower rungs of the job market, leaving them unemployed and therefore causing the average salary to rise.

The numbers also show that one in ten wage earners makes at least one million krona per month, the equivalent of $8,107 per month or $97,280 per year. In contrast one in ten makes less than 400,000 kr per month, equivalent to $ 3,250 monthly or $39,000 per year.

Bankers mike twice that of hotel workers

When looking at individual segments of the economy those employed in the insurance and financial sector enjoyed the highest average salary: about 1.1 million krona or $8,920 a month, or $107,040 in a year. The wages were about half that in the hospitality industry which was also the lowest paying sector last year, with monthly wages averaging 597,000 kr or $4,840 which is equal to $58,080 per year.

Although Icelandic salaries may seem generous in comparison to other countries readers should be aware that Icelandic salaries are heavily taxed as are consumer goods, leaving people with less purchasing power. The marginal individual income tax rate is 46,26% not including union dues and a mandatory pension payment of 4%, and the sales tax can be as high as 25%. ai@mbl.is