To succeed in your expansion into Iceland, it is vital for both employers and employees to have a strong understanding of the Icelandic work culture. As a global Professional Employment Organisation (PEO), it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about the Icelandic work culture, we want to support your Global Expansion plans. 

The Basics of the Icelandic Work Culture

  • Language: The official language is Icelandic, but fluency in English is common, particularly in business. English and Danish are compulsory subjects at school.
  • Punctuality: Being on time is appreciated as being businesslike and courteous. Best to use the 24-hour clock when arranging meetings and appointments
  • Attitudes: Iceland is an essentially classless society. Workplaces and offices have an inclusive atmosphere regarding gender equality, workers’ rights and rejecting discriminatory behaviour. Unlike most Scandinavian neighbours, Icelanders can be spontaneous, flexible, and happy to change their plans.
  • Business Meetings: Unlike in some hierarchical business structures, don’t be surprised to see the decision-makers taking part in the meetings from day one. Icelanders do like a joke as a means of deflecting awkward moments … or deflating over-effusive visitors.
  • Greetings: Icelanders may use their first names in greeting, as original surnames are rare. Full names combine the first name, mother, or father’s first name with a suffix for ‘son’ or ‘daughter.’
  • Dress Code: Formal is safest for men and women, but as some companies may be more relaxed in this area, there is no harm in asking what is acceptable ahead of the meeting.
  • Gift-giving: Small, modest, and thoughtful gifts from the home country will be appreciated
  • Out of Hours: Icelanders are very happy to ‘oil the wheels’ at business dinners and lunches

Labour Law and Icelandic Work Culture

Icelandic Minimum Wage

Iceland does not have mandatory minimum wages set at the State level. Minimum pay is usually agreed contractually, by Collective Bargaining Agreements (CBAs) or trade union negotiations. For example, in 2021, one of the largest workers’ unions, Efling, dictated a minimum gross monthly wage for its full-time workers over 18 years old of ISK 351,000 (€2,410, US$ 2,720).

However, average wages are generally higher, vary between cities and regions and are among the highest in Europe. The monthly average wage in 2021 after tax was roughly ISK 410,000 (€2,815, US$3,175).

Probation Periods in Iceland

Trial or probationary periods cannot exceed three months. There is no provision under the Labour Code for probationary periods, so these are governed by business practice or collective agreements.

Working Hours in Iceland

Collective and trade union agreements generally set limits on working hours, which are normally 40 hours over a five-day week. The working day includes 35 minutes, split into two paid ‘coffee breaks’ making a total of 37 hours and five minutes per week. Working days generally begin between 8.00 and 10.00 am. Collective agreements can negotiate shorter meal and coffee breaks, enabling overtime to begin earlier.

Employees are entitled to 11 hours of continuous rest between workdays, considering time spent travelling to and from work. Sundays should always be free.

Overtime in Iceland

Extra pay for extra hours worked is calculated as 0.875% of the monthly salary per hour for up to 162.5 hours of overtime during the month. The rate is 1.0385% of the monthly salary per hour overtime for hours above 162.5 in a month.


For more information, download our free guide or get in touch with our consultants here