Can I hire in Iceland without setting up a subsidiary?

Yes. That is exactly what an Employer of Record does: Skalis already has the ability to employ locally in Iceland. You hire your staff without creating an entity, tying up capital or handling local red tape.

How quickly can my employee be operational in Iceland?

Once the legal framework is validated, a compliant employment contract can generally be set up within a few days. Timing depends on the profile, the supporting documents and any local formalities (work permit for nationals from outside the EEA — EFTA).

In which currency and under which regime is the salary paid?

Payroll is issued and paid in the local currency (ISK), on local schedules and in the statutory format. Skalis withholds and remits social contributions and tax to local authorities within the regulatory deadlines.

What remains my responsibility once the employee is in post?

Operational management: tasks, objectives, management and work organisation remain entirely yours. Skalis is the legal employer in Iceland and handles the contract, payroll, contributions, benefits and compliance.

How is the total cost of an employee calculated?

The employer cost includes the gross salary, local employer contributions, any mandatory benefits and the Skalis management fee. You receive a transparent quote detailing the total cost before any commitment.

Can I move a freelancer already active in Iceland onto a local contract?

Yes, this is a common case. We take on your contractor under a compliant local employment contract, which secures the relationship for both parties and removes the misclassification risk.

EOR in Iceland - Skalis Portage Salarial

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Employer of Record · Iceland

Hire and expand in Iceland, without setting up a subsidiary.

Does your company want to employ someone in Iceland without opening a local entity? Skalis becomes the legal employer of your local staff on your behalf : compliant local contract, payroll in ISK, contributions and benefits. You run the work, we carry the employer.

Talk to an expert How it works

Iceland

CapitalReykjavik

Payroll currencyISK

Economic areaEEA — EFTA

Working language(s)Icelandic, English

Entity to set up0

Schengen areaYes

Local payroll in ISK•Contracts compliant with local law•Taxes & contributions withheld and remitted•A dedicated point of contact

In short : with an Employer of Record (EOR), Skalis legally employs your staff in Iceland under a compliant local contract and runs payroll in ISK, contributions and compliance — with no subsidiary to set up. Key facts in Iceland: 40 h/week, 24 working days paid leave, employer contributions ≈ 18 %, minimum wage no statutory minimum (collective agreements).

Why this market

Employing in Iceland through an Employer of Record

Attractive market : A high-value niche market (energy, tech, tourism) with a highly educated workforce.

Rather than opening a subsidiary — months of formalities, legal and accounting fees, tied-up capital — an Employer of Record lets you hire in Iceland within days, fully compliant. Skalis legally employs your local staff on your behalf; you keep full operational control.

You stay in control

Tasks, objectives, management, compensation : the day-to-day working relationship remains entirely yours.

Skalis carries the employer role in Iceland

We sign the local contract, run payroll in ISK and secure every local legal and social obligation.

Employer of Record · Data

Employment law in Iceland at a glance

Minimum wageNo statutory minimum (collective agreements)

Working week40 h / week

Statutory paid leave24 working days

Employer contributions≈ 18 %

Probation3 months

13th salaryNot mandatory

Payroll currencyISK

Indicative 2025 figures, confirmed when scoping your project.

What we take care of

Complete employer coverage in Iceland

From signing the contract to the final payslip, Skalis manages the entire employment lifecycle in Iceland.

Local employment contract

Drafting and signing a contract compliant with local labour law : term, notice, mandatory clauses.

Local payroll in ISK

Calculation, issuance and payment of salaries in ISK, on local schedules and in the statutory format.

Social contributions & tax

Withholding and remittance of contributions and tax to local authorities, within statutory deadlines.

Benefits & social protection

Health, provident, pension and leave : we align the package with local standards and obligations.

Compliance & risk management

Ongoing legal monitoring, correct worker classification and protection against misclassification risk.

Onboarding & support

Onboarding, expenses, leave and offboarding, with a dedicated point of contact.

The process

Your team member operational in Iceland within days

A simple journey, from the first conversation to the first payslip.

Scoping

You tell us the profile and target compensation in Iceland. We validate feasibility and the local legal framework.

Proposal

Within 48h you receive a transparent quote : full employer cost and employee package in ISK.

Contract & onboarding

We draw up the compliant local employment contract and add the person to our payroll systems.

Management

You direct the work; we handle payroll, contributions, filings and support throughout the contract.

EOR vs subsidiary

EOR or setting up an entity in Iceland?

Testing the local market, hiring a rare profile, supporting a client on site : an EOR avoids months of formalities.

Criterion	EOR with Skalis	Setting up a subsidiary in Iceland
Time to hire	A few days	3 to 6 months
Setup cost	No structural cost	Legal, accounting fees, capital
Local compliance	Ensured by Skalis	Your responsibility
Employer risk	Carried by the EOR	Entirely borne
Commitment	Flexible, per employee	Heavy and long-term
Ideal for	1 to a few employees, market test	Permanent large-scale presence

Frequently asked questions

Hiring in Iceland with an EOR

The exact local terms (minimum wage, mandatory benefits, notice periods, taxation) in Iceland are confirmed when scoping your needs. This page is for general information and does not constitute legal advice.

Employer of Record · Schengen

Hire in another Schengen country

Hire in Iceland as early as this week.

Tell us the profile you’re looking for : we’ll get back to you within 48h with a clear proposal, full employer cost included.

Book a meeting

EOR in Iceland