The Directorate of Labour’s payment office handles the payment of unemployment benefits for the whole of Iceland.  

Unemployment benefits are paid out on the first working day of each month.  

Please note that you must confirm your job search through My pages between the 20th and the 25th each month to ensure payment.  

  • Payments to job seekers who confirm their job search between the 20th and 25th days of each month will receive their benefit payment on the first working day of each month. 
  • Payments to job seekers who confirm their job search between the 26th and 3rd days of each month will be paid after the first week of the month. 
  • Payments to job seekers who confirm their job search after the 3rd day of the month will be paid on the first day of the next month. 


The following amounts are valid from the 1st of January 2020: ​ 

 Basic unemployment benefit payments are calculated as follows: ​ 

  • Unemployment benefit is 289.510 kr. per month for a 100% entitlement. ​ 
  • Unemployment benefit is 217.132 kr. per month for a 75% entitlement. ​ 
  • Unemployment benefit is 144.755 kr. per month for a 50% entitlement. 
  • Unemployment benefit is 72.375 kr. per month for a25% entitlement (minimum entitlement). 


 11.580 kr. 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  

The maximum income-related unemployment benefits are 456.404 kr. per month.  

Your right to receive income-related unemployment benefits is valid for 3 months, providing that you meet the requirements.  

Please binformed that the income-related unemployment benefits have been temporarily extended to 6 months. This applies to those who have not fully exercised their right to income-related benefits. This provision is valid until the 30th of September 2021.  

Please note that the first two weeks of your registration are calculated at the basic rate.  

Wage-earners: Income-related unemployment benefits are 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 benefits are 70% of your average gross income, based on the income year preceding the year in which you become unemployed. 

(The amount of income-related benefits also depends on your benefit entitlement. For example, if you have a maximum income-related benefit, but only 50% benefit entitlement, the maximum amount you can receive is 50% of 456.404 kr.or 228.202 kr. 



Personal tax credits

Personal tax credit (persónuafsláttur) is a tax deduction you can use to reduce the tax withdrawn from your salary 

Personal tax credits are ISK 54.628. per month in the year 2020.  

In the application for unemployment benefits you can choose whether and how you would like to use your tax credits 

If you have already submitted your application, you can change your tax credit settings through My pages’. 

You can find information on the status of your tax credits via Iceland Revenue and Customs’ website 

If you have not received your benefit payment, this may be for one of the reasons below:

Did you forget to confirm that you are still looking for work in the period 20 – 25 of last month?

between the 25th day of the month and the 3rd day of the next, your benefit payment will be made 7 working days after the first payment. If you confirm after the 3rd day of the month, then you will be paid after the beginning of the next month.

Has your application been processed?

Processing applications can sometimes take longer than usual. Sometimes more information or documents are needed and these have to be called for; if they are not submitted before the 20th day of a month then it is not certain that you will be paid benefit at the beginning of the following month.

Did you apply within the period for which payment is now being made?

The payment period for unemployment benefit is from 20th of each month to the 19th of the following month.

Did you have unused vacation entitlement which you had not disposed of?

You must use up your vacation (paid holiday) from the previous vacation acquisition period before you start drawing unemployment benefit. You can arrange to transfer vacation entitlement that you have earned in the current acquisition period to the next period.  The vacation period is from 1 May to 15 September each year; thus, vacation days which you have earned before 1 May each year must be used in the following vacation period, beginning on 1 May.

Have you answered all letters from the Directorate of Labour?

It is important that you answer all letters from the Directorate of Labour: if you fail to do so, the department will take the view that you are no longer looking for work, and you may fail to meet the requirements of the Unemployment Insurance Act, No. 54/2006, in which case payments to you will be stopped until you submit the information required.

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