Guide to work in Iceland: overview, opportunities and FAQs

Updated 12 March 2023

If you're thinking about working abroad, choosing the right country can involve considering multiple factors like location, ease of transition and local culture. The small country of Iceland can offer a combination of sufficient familiarity while also being quite different. If you're thinking about working in Iceland, knowing what to expect can help you decide if it's the right choice. In this article, we give an overview of Iceland, describe what it's like to work in Iceland and answer some frequently asked questions.

Please note that none of the companies, institutions or organisations mentioned in this article are affiliated with Indeed.

An overview of Iceland

Iceland is a small Nordic island country in the north of the Atlantic Ocean between Scotland, Norway and Greenland. The capital city is Reykjavík and other population centres on the island include Kópavogur, Hafnarförður and Akureyri. Although these are the largest population centres, only Reykjavík has a population greater than 35,000 people at around 120,000. The total population of Iceland is quite small at just under 380,000 inhabitants. The main contributors to Iceland's economy are renewable energy, fishing, livestock agriculture, tourism, aluminium smelting and some pharmaceutical products.

Iceland has a relatively colder climate than the UK, with cool summers and average winter temperatures dropping below zero. The annual mean temperature is just under 2.5 degrees Celsius. Due to its northern location, there's significant variation in the length of days across the year. In the summer, days can last almost 22 hours but drop to fewer than five hours in December. The standard of living is quite high, but getting used to the differences between winter and summer can be challenging for those coming to Iceland from abroad. The official language is Icelandic.

What it's like to work in Iceland

If you want to know what it's like to work in Iceland, here's some useful information to consider:

Language

The official language of Iceland is Icelandic, which is a Germanic language that's related to Norwegian and Faroese. It has largely the same Latin alphabet as English but with some additional characters, for a total of 32 letters. Icelandic may be harder to learn than languages that are more similar to English, such as Dutch and French. According to the official marketing office for the city of Reykjavík, Visit Reykjavík, the vast majority of the population can speak English fluently. This means that getting around Iceland without speaking the language is feasible.

If you want to work in Iceland, speaking Icelandic is going to be useful for being a competitive candidate, but with the vast majority of the population speaking English, there's no lack of good English speakers. Larger companies in Iceland may employ English as their business language, so focus on these if you're not yet proficient in Icelandic.

Employment rights

The details in this section are based on information from the Iceland Government website, as of February 2023. Employees in Iceland are entitled to two days of paid leave for every month they work in a year. For a full-time employee, this means 24 days of paid annual leave. Employees in the public sector can have a higher rate with age. Iceland has a holiday period which lasts from 2nd May to 15th September. During this period, employees are entitled to take all of their leave in one go unless a collective agreement stipulates otherwise.

Collective agreements can play a significant role in Iceland, with trade union membership in the workforce at 85%. For illnesses preventing work, employees are entitled to two days of paid sick leave for each month they've worked. Collective agreements may cause these to differ between employers and sectors.

In-demand jobs

Iceland has a small population with a growth rate of just over 1.5% per year, and relatively low unemployment at 3.2%. The total number of vacant jobs is approximately 6,620 and the total number of occupied positions is 230,767, as of the end of 2022. The forecasted number of new jobs that are going to exist in Iceland between 2022 and 2025 is 15,000. With the number of Icelandic employees increasing by just 3,000 over the same period, there's potentially significant demand for foreign employees. If you're considering work outside of the fishing and agriculture sectors, Reykyavík is probably the best choice.

The sector of the economy that has the highest rate of unfilled vacancies is construction, with a vacancy rate of 8.1% as of the end of 2022. Major employers exist in the tourism, financial services and healthcare sectors. Others include industries like energy and agriculture. Significant demand exists in sectors such as hotels, restaurants, administration and logistics. There are also shortages in STEM roles like biotechnology and computer science. More than 40% of the workforce has a university education and foreign employees account for approximately 10% of the entire population.

Visa and residency

The details in this section are based on information from the Icelandic Directorate of Immigration, as of February 2023. Although Iceland isn't a full member of the European Union (EU), it's a member of the European Economic Area (EEA) and Schengen zone. This means that holders of a British passport may enter Iceland for up to 90 days without a visa within a 180-day period. Those coming to work in Iceland for short-term projects don't require a residency or work permit. For work beyond 90 days, it's necessary to apply for a residency permit.

There are both residence permits and work permits, in addition to long-term remote work visas. There's no online application system, which means sending the application by post to the Directorate of Immigration in Iceland. There are processing fees for these applications. You can also contact Icelandic visa processing centres in London, Edinburgh and Manchester, although these centres typically don't handle residency and work permits.

Frequently asked questions

Here are some frequently asked questions about working and living in Iceland, together with their respective answers:

How different are Icelandic qualifications?

Like many European countries, Iceland has its own qualifications system and the European Network of Information Centres National Academic Recognition Information Centre (ENIC-NARIC) can help you determine equivalence and issue the necessary certificates, particularly for academic qualifications. The Icelandic ENIC-NARIC office is at the University of Iceland. Icelandic academic qualifications follow a numerical system. For example, an Icelandic matriculation examination (Stúdentspróf) with a score of 10 is equivalent to three A-levels with grades of AAA or AAB, a 9 is equivalent to ABB and an 8 is BBB.

At the university level, the Icelandic equivalent of a bachelor's degree is the Baccalaurreatus, which has a numerical grading system up to 10. A 9-10 is equivalent to a first-class degree in the UK, a 7.5 is equivalent to an upper second and a 6.5 is equivalent to a lower second at the bachelor's level.

Is Iceland expensive?

Yes. Living costs in Iceland are high by European standards and incomes are relatively high too. For a single person living somewhere like Reykjavík, the minimum budget would be $1,600 per month. According to crowd-sourced data on Numbeo, the additional expense of living in Iceland compared to the UK is between 16.2% and 38.6%. It's necessary to note that this is crowd-sourced data and real prices may vary.

How can I find work in Iceland?

Iceland's small size can make it easier to browse a greater proportion of available vacancies. You can send your applications remotely and conduct interviews over the Internet in many cases. Local job sites include Störf.is and job.is. Neither of these sites has an English language option, so familiarity with Icelandic is going to be necessary to use them effectively. Consider looking for large employers in Reykjavík and sending a speculative application, especially if you're still unfamiliar with Icelandic and can't use local job sites.

Can I teach English in Iceland?

Since Iceland's population is quite proficient at English, there may be lower demand for English teachers than other countries. Teaching at the school level is one option because this is where most Icelanders are likely to learn the language. A Teaching English as a Foreign Language (TEFL) certificate or bachelor's degree are often among the minimum requirements for teaching jobs. Postgraduate qualifications and teaching experience may also be necessary.