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 March 2026.}

Labour market

As of 1 January 2025, 389 444 people lived in Iceland.

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

The employment rate was 87%, 11.2 percentage points higher than the EU27 average and almost identical to 2018. In 2024, for women, the employment rate was 83.4%, for men, the employment rate was 90.2%, and for youth, the employment rate was 74.6%, 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 2024, the unemployment rate was equal to the level registered in 2023. In 2024, the unemployment rate has not yet returned to the level before the pandemic, when it equaled 2.3% in 2018, and 3.1% in 2019. In 2024, it was 2.7 percentage points lower in Iceland than in the EU27.

In 2024, 80.5% of the active workforce were from Iceland, 11.2% from other EU Member States and 8 from third countries. In the EU27, as of 2024, the highest proportion of the workforce comes from the respective country (84.4% on average), while on average a smaller portion is from foreign countries (4.3% from other EU Member States, and 11.3% from third countries).

In 2024, most employees worked in wholesale and retail trade; repair of motor vehicles and motorcycles (18.3%), followed by manufacturing (15.3%), construction (13%) and accommodation and food service activities (12.8%). In terms of number of enterprises, most can be found in construction (15.9%), professional, scientific and technical activities (13.2%), and real estate activities (10.7%).

In Iceland, the highest proportion of employees (26.3%) worked in micro companies with up to 9 employees. These companies accounted for the majority of all enterprises in the country (94.5%) with 44 145 of such businesses. 25.1% of persons employed worked in large companies with more than 250 employees, 21.3% of persons employed worked in medium companies with 50 to 249 employees, 16.4% of persons employed worked in small companies with 20 to 49 employees and 10.9% of persons employed worked in small companies with 10 to 19 employees.

Transnational labour markets and mobility

In 2025, there were approximately 40 000 EU movers of working age residing in Iceland, comprising 17.2% of the working-age population, significantly above the EU-27 average and noting an increase of 4.5% compared to 2024. They show a predominantly male gender distribution (61% male, 39% female) and are predominantly young (47% aged 20–34). This composition differs from the EU average, where the population of movers shows gender balanced and is predominantly aged 35–49.

Iceland has consistently attracted more EU movers than it has lost across the 2019–2025 period, with a net balance of 1 743 in 2025. In 2024, inflows of EU movers significantly decreased by 16% compared to the previous year, while outflows significantly increased by 17%.

Third-country nationals numbered 15 000 in 2025, representing 6.3% of the working-age population and showing growth of 10.8% from 2024. Combined, EU movers and third-country nationals comprise approximately 23.5% of Iceland’s total working-age population.

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 2025 this was 1.9 % in the industry, construction and services, nearly matching the EU27 average. This rate has increased by 0.7 percentage points compared to 2024 and it is still equal to the situation before 2020, when it stood 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: jvs_a_rate_r2, Statistics | Eurostat}

Widely used job portals

Wages

Minimum wage

As of 2026, 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 2024, the gross average earnings of a single person stood at EUR 6592, while the EU27 average was EUR 3 603. The equivalent net wage was EUR 4 798 in Iceland, compared to EUR 2474 in the EU27. Compared to 2019, gross average earnings increased by 20% in Iceland and by 22.8% in the EU27. During the same period, the net wages have increased by 21.8% in Iceland and by 24.5% in the EU27.

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