Labour Market Information: Iceland

National level - Iceland

^{* The years referenced in this report vary, as the data is based on the most up-to-date information available for each indicator, as of December 2024.}

Labour market

As of 1 January 2024, 398 940 people lived in Iceland.

^{Note: nama_10r_2gdp, Statistics | Eurostat (europa.eu)}

In 2023, more than 0.2 million people were active on the labour market in Iceland. The employment rate was 83.7%, 13.3 percentage points higher than the EU27 average and 1.4 percentage points lower compared to 2018. In 2023, for women, the employment rate was 81.3%, for men, the employment rate was 85.9%, and for youth, the employment rate was 71.7%, all above the EU average.

^{Note: lfst_r_lfe2emprt, data refer to working age population (15-64), youth age group (15-24)  Statistics | Eurostat (europa.eu)}

In 2023, the unemployment rate was nearly matching the level registered in 2022. In 2023, the unemployment rate returned to the level before the pandemic, when it equalled 2.8% in 2018, and 3.6% in 2019. The unemployment rate is consistently below the EU27 average. In 2023, it was 2.4 percentage points lower in Iceland than in the EU27.

In 2023, 80.1% of the active workforce were from Iceland, 11.8% from other EU Member States and 7.7 from third countries. In the EU27, as of 2023, the highest proportion of the workforce comes from the respective country (85% on average), while on average a smaller portion is from foreign countries (4.3% from other EU Member States, and 10.5% from third countries).

In 2022, most employees worked in wholesale and retail trade; repair of motor vehicles and motorcycles (18.5%), followed by manufacturing (15.2%), construction (11.8%) and accommodation and food service activities (11.4%). In terms of number of enterprises, most can be found in construction (15.4%), professional, scientific and technical activities (13.6%), and real estate activities (10.8%).

In Iceland, the highest proportion of employees (33.9%) worked in micro companies with up to 9 employees. These companies accounted for the majority of all enterprises in the country (95%) with 42 736 of such businesses. 21.7% of persons employed worked in large companies with more than 250 employees, 20% of persons employed worked in medium companies with 50 to 249 employees, 14.4% of persons employed worked in small companies with 20 to 49 employees and 9.9% of persons employed worked in small companies with 10 to 19 employees.

Vacancies

Job vacancy rate

Regarding the job vacancy rate (defined as the number of job vacancies expressed as a percentage of the total sum of occupied posts and job vacancies), in 2023 this was 2.7 % in the industry, construction and services, nearly matching the EU27 average. This rate has increased by 1 percentage points compared to 2022 and it is still above the situation before 2020, when it stood only at 1.9%.

^{Note: jvs_a_rate_r2 Statistics | Eurostat}

The sectors with the highest vacancy rates were human health and social work activities; education; arts, entertainment and recreation; public administration and defence; compulsory social security; administrative and support services.

^{Note: lfsa_ehomp, Product - Datasets - Eurostat}

Widely used job portals

Wages

Minimum wage

As of 2024, Iceland did not have a statutory minimum wage and relied on collective bargaining to set wage floors. As collective bargaining in Iceland is high at 90% (OECD-ICTWSS), most workers are covered by some form of wage floor.

Monthly average gross and net earnings

In 2023, the gross average earnings of a single person stood at EUR 6184, while the EU27 average was EUR 3417. The equivalent net wage was EUR 4 490 in Iceland, compared to EUR 2351 in the EU27. Compared to 2018, gross average earnings increased by 8.9% in Iceland and by 19.8% in the EU27. During the same period, the net wages have increased by 10.4% in Iceland and by 22.1% in the EU27.

^{Note: earn_nt_net, Single person earning 100% average, annual rates transformed into 12 monthly payments. Statistics | Eurostat (europa.eu)}

Trends

Remote work

The incidence of remote work has been gradually increasing in Iceland between 2018 and 2023, from 6.5% to 7.1%. Similarly, the share of remote work as measured by ‘sometimes’ has increased from 25% to 35.5%.

back to top