Planning your move · Starting out

Moving to Iceland when you are starting out

This page is for people building a life here from zero: no local savings, no network, no rental history, and often no Icelandic yet. It answers the questions that normally come up when you think about moving to a new country, in plain words.

Guided by a resident. Written by someone who moved here and was helped by people who pointed the way. This page passes that help on, and every rule is checked against official Icelandic sources.

Last verified 10 August 2026 · island.is, Þjóðskrá Íslands, Skatturinn, Sjúkratryggingar Íslands, HMS

If you are still deciding whether to come at all, start with before you move to Iceland. This page assumes you are coming, or already here.

Can you actually live in Reykjavík on a normal salary?

We do not put exact amounts on this page because every move is different. A student, a single person, a couple and a family do not need the same budget. The number that decides your life here is not your salary. It is what is left after rent, in your own situation.

The honest answer is yes, a normal salary can work, but with very little left over in the first year, and only if your rent is shared. Wages in Iceland are high by European standards, and so is almost everything you buy.

Before you compare any job offer, learn what is taken out of your pay each month:

Income tax and municipal tax, taken by your employer.
At least 4% of your gross pay for your pension. Your employer pays more on top. This is not optional.
Union dues, in most jobs. Small, and they buy you real things: legal help, sick pay funds, course refunds, holiday flats.
Your personal tax credit (persónuafsláttur, say: PER-sohn-oo-af-slaht-tur) is taken off after the tax is worked out, so lower pay is taxed much more lightly than the headline rate looks.

Put your own gross figure into the official calculator instead of guessing: Skatturinn, individuals. Our taxes page explains the bands and the March deadline.

You want to know how much to save before you fly

What actually happens: Your first month costs far more than a normal month. Most landlords ask for a deposit and the first rent up front, you may need a phone, a bus card or a car, warm clothes you do not own yet, and your first salary usually arrives at the start of the month after you begin work. So you can be here four to six weeks before any money comes in.
What to do: Plan for a deposit plus first rent, plus at least two months of ordinary living costs on top. If you are coming on a residence permit, the Directorate of Immigration also has its own minimum support requirement you must prove; check the current figure directly with them, because it changes and it depends on your family size.
The common trap: Counting on finding a cheaper flat once you arrive. In Reykjavík the cheap flat is not waiting for you, and looking while paying for short-term accommodation burns your savings fastest.

Food feels impossible in the first weeks

What actually happens: Imported food, alcohol and eating out are expensive. Groceries are the one part of your budget you can change quickly, and the price difference between shops here is large.
What to do: Shop at the low-price supermarkets, buy Icelandic dairy, fish, lamb, bread and skyr rather than imported versions of what you ate at home, cook at home, and take your own coffee to work. Tap water is excellent everywhere, so never buy bottled water.

Kennitala and electronic ID: why nothing works until you have them

Iceland runs on two things: your kennitala (say: KEN-ni-tah-la, your personal ID number) and your electronic ID (rafræn skilríki, say: RAV-rine SKIL-reek-ee). Without them you cannot sign a lease, open a bank account, log into the health portal, or get a tax card.

You are an EU or EEA citizen and thought the kennitala was automatic

What actually happens: It is not. You apply to Þjóðskrá Íslands (say: THYOTH-skrow, Registers Iceland) to register your legal domicile (lögheimili). The kennitala that gives you full rights comes from that registration. A short-stay system number is a different, weaker thing, and it does not give you healthcare or a tax card.
What to do: Apply to register your legal domicile as soon as you have somewhere to live and a reason to be here, such as work or study. Bring your passport and your rental contract or employment contract.
The common trap: Waiting until you need it. Processing takes time, and everything else in your life here is stacked on top of it.

You cannot activate electronic ID with a foreign passport

What actually happens: Electronic ID is issued through your bank or a certified provider, and it is tied to your kennitala and a verified identity check in person. People often try to do it online from abroad and get stuck.
What to do: Once you have your kennitala, book an appointment at a bank branch with your passport and register electronic ID in your phone there. Then install the official apps you will actually use through island.is.
The common trap: Using someone else's phone or number to register it. The electronic ID is a legal signature. If it is not in your own name and your own device, you cannot sign anything, and it is very hard to undo.

The full chain, step by step, is on our residency page.

Are you covered by healthcare in your first months?

Usually not straight away. When you move your legal domicile here, the general waiting period before you are insured with Sjúkratryggingar Íslands (say: SYOOK-ra-try-ging-ar, Icelandic Health Insurance) is currently three months. People transferring insurance rights from an EEA country, the UK or Switzerland may be covered sooner.

EEA and EFTA citizens: bring a European Health Insurance Card from your home country and keep it valid until your Icelandic cover starts.
Everyone else: expect to need private cover for that first period. For many residence permits it is a condition, not a suggestion.

Confirm your own start date with Sjúkratryggingar Íslands and read our healthcare page.

Finding a room or a flat in Reykjavík

The rental market is small, fast and mostly in Icelandic. Sharing is completely normal for adults in their twenties and thirties here, and for most people arriving without savings it is the only realistic first step.

Reading an Icelandic listing

herbergi = rooms, including the living room. So 3 herbergi is usually a living room and two bedrooms.
fm = square metres. íbúð = flat. stúdíó = one room with a kitchen area. kjallari = basement. til leigu = for rent.
Leigusamningur = the rental contract. Trygging = the deposit. Húsgögn fylgja = furniture included.
Postcodes: 101 is the centre and the most expensive; 105, 107 and 108 are close in; 109, 111, 112 and 113 are further out and usually cheaper, with a longer bus ride. Hafnarfjörður, Kópavogur and Mosfellsbær are separate municipalities, often cheaper again.

You have no Icelandic rental history and keep being passed over

What actually happens: Landlords choose between many applicants and prefer people with a kennitala, a contract of employment and someone who can vouch for them. Arriving with none of these puts you at the back of the queue.
What to do: Take a room in a shared flat first, register your legal domicile there with the landlord's agreement, and build six months of paid-on-time history. Use the formal platforms and the municipality's own listings, and ask your workplace and union whether they know of anything, because a lot of housing here moves through people, not adverts.
The common trap: Paying a deposit for a flat you have not seen, to someone you have not met, by bank transfer. This is the most common way newcomers lose money here.

You want the rent support you are entitled to

What actually happens: Housing benefit (húsnæðisbætur, say: HOOS-nigh-thees-bye-tur) is paid by HMS, but only on a written lease that has been properly registered. An informal 'we agreed verbally' arrangement gets you nothing, and gives you no protection if you are told to leave.
What to do: Insist on a written lease in your own name, register it, then apply to HMS. Your municipality may also have its own extra support on top.
The common trap: Accepting a lower rent in exchange for no contract. You lose the benefit, the deposit protection and your right to stay.

See housing benefits on island.is, and our housing page for deposits and tenant rights.

Heating and hot water come from geothermal energy and are cheap, and are often included in the rent. Electricity usually is not. Ask before you sign.

Can you build a career here with only English?

You can get a job with English. Moving up is where Icelandic starts to matter. Tourism, hotels and restaurants, building work, cleaning, warehouses, transport, fish processing and much of the tech sector work in English every day. Schools, care, health, public offices, banks and any job facing the public need Icelandic.

You are stuck in a job below your training

What actually happens: Employers cannot always read your qualifications, and some professions here are protected by law and need formal recognition before you may work in them.
What to do: Start the recognition process early. Our page on recognising foreign qualifications explains the three routes, including assessment of skills you have but cannot prove on paper.

You want to learn Icelandic without paying full price

What actually happens: Courses for adults are widely available in the evenings and are subsidised, but they are rarely free. Most unions refund a large share of the fee for members, and some municipalities and libraries run free conversation groups.
What to do: Ask your union's education fund first, then look at the adult education centres and the university's Icelandic courses for foreigners. Then find a free conversation group, because a class alone will not make you speak.
The common trap: Waiting until you feel ready. Most people who never learn are the ones who waited for a quieter year that never came.

More on this: recognising foreign qualifications and work rights.

Remote work, freelancing and studying your way in

You want to keep your job abroad and live here

What actually happens: Where you pay tax follows where you live, not who pays you. If you live in Iceland long enough to be tax resident, Iceland taxes your worldwide income, and your foreign employer may also have duties here. There is a long-term visa for remote workers, but it is narrow, short, and does not lead to settling permanently.
What to do: Check the remote-work visa conditions with the Directorate of Immigration before you promise your employer anything, and get tax advice for both countries. Declare the income here from the start.
The common trap: Assuming that being paid abroad means you are invisible here. Iceland exchanges tax information with most countries.

You are thinking of studying here to get residency

What actually happens: A student permit lets you live here and work limited hours, but it is tied to your studies and does not by itself become a work permit when you finish. Tuition at the public universities is low compared with many countries, but living costs are the real bill.
What to do: If you want to study, choose the programme for the qualification, not as a shortcut. Then look at what your qualification lets you do here afterwards, and plan the permit change well before you graduate.

Start at Útlendingastofnun.

The dark winter, and how people get through it

From November to February daylight is short, and in midwinter it can feel like the day never fully starts. In June the opposite happens and it never gets dark. Both change how you sleep and how you feel, and both are manageable if you plan for them.

Get outside in the middle of the day, even in bad weather, even for twenty minutes. Daylight matters more than exercise here.
Buy blackout curtains or a good sleep mask before June. The midnight sun is not romantic when you have work at seven.
Wind, not cold, is what defeats people. Buy one properly windproof and waterproof layer and good shoes with grip, and the winter becomes ordinary.
If low mood lasts for weeks, stops you working, or stops you sleeping, that is a health matter, not a personality flaw. Speak to your local health centre (heilsugæsla, say: HAYL-soo-guy-sla).
A 4x4 is not necessary to live in Reykjavík. Proper winter tyres are, if you drive at all, and they are required by law in the conditions where you would need them. Driving outside the capital in winter is a different skill; check road and weather conditions every time.

Road and weather conditions: road.is and Veðurstofa Íslands. Health cover and how to see a doctor: our healthcare page.

Common questions

What is my actual take-home pay in Iceland after taxes?: Your employer takes income tax and municipal tax straight out of your pay, plus at least 4% for your pension and, in most jobs, union dues. Income tax in 2026 starts at 31.49% on the lowest band, and your personal tax credit is taken off after the tax is calculated, so low pay is taxed much more lightly than the headline rate suggests. Use the official calculator on skatturinn.is with your own gross pay rather than a general estimate.
Do I need private health insurance for the first months in Iceland?: When you move your legal domicile to Iceland, the general waiting period before you are health insured here is three months. People transferring insurance rights from an EEA country, the UK or Switzerland may be covered sooner. EEA and EFTA citizens should bring a European Health Insurance Card. People from other countries are usually required to hold private cover for that first period. Check your own case with Sjúkratryggingar Íslands.
Do EU citizens get a kennitala automatically when they arrive?: No. Nothing happens by itself. You apply to Þjóðskrá Íslands (Registers Iceland) to register your legal domicile, and the kennitala follows from that registration. A short-stay system number is a different thing and does not give you the same rights.
What does 3 herbergi mean on an Icelandic rental listing?: Herbergi means rooms, and the count includes the living room. A 3 herbergi flat is normally a living room and two bedrooms, not three bedrooms. Ferm or fm is the size in square metres.
Are there free Icelandic classes for new residents in Iceland?: Courses are usually paid, but most are heavily subsidised, and many unions refund a large part of the fee for their members. Some municipalities and libraries also run free conversation groups. Ask your union first, then your municipality.
Is heating included in rent in Iceland?: Hot water and heating are geothermal and comparatively cheap, and are often included in the rent, but electricity usually is not. Always ask what the rent covers before you sign, and get the answer written into the lease.

Official sources

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