Household gross disposable income increased by 10.8% from 2023 to 2024 according to preliminary figures. Disposable income per capita amounted to roughly 6.3 million ISK in 2024 and is estimated to have increased by 8.8% from the previous year with 2% increase in population. The purchasing power of household disposable income per capita increased by 2.8% during the same period due to an increase in the consumer price index by 5.9% over the year.
Increase in household income from wages and salaries
Household total income is estimated to have increased by 8.1% in 2024 from the previous year. Increase in wages and salaries bears the brunt of the total increase, increasing by roughly 158 billion ISK from the previous year or 6.9%. For the same period, taxes on income increased by 45 billion ISK or about 6.9%. According to Statistics Iceland wage index, salaries in Iceland increased by 6.6% in 2024 from the previous year while the number of employed persons increased by 2.2% during the same period.
Household interest expenses are estimated to have increased by 10.1% in 2024 from the previous year. During the same period, household property income increased by 16.6%.
Social benefits other than social transfers in kind increased by 11.6%
Social benefits other than social transfers in kind are estimated to have increased by roughly 66 billion ISK from 2023, an increase of 11.6%. The share of social benefits other than social transfers in kind of household total income was measured at 15% in 2024.
The household sector’s net social contributions increased by 3% in 2024 compared with 2023.
Household gross disposable income is estimated to have increased by 10.1% in the fourth quarter of 2024, compared with last year’s corresponding quarter. Disposable income per capita amounted to just under 1.6 million ISK in the quarter and is estimated to have increased by 8.5% compared with the fourth quarter of 2023. Due to increased inflation rate, the purchasing power of household disposable income per capita in the fourth quarter of 2024 increased by 3.5% compared with last year’s corresponding quarter, but the consumer price index increased by 4.9% during the same period.
Household total income increased by 8.1% in the fourth quarter of 2024, compared with last year’s corresponding quarter, where wages and salaries increased by 7.6% and property income increased by 13.1%. Household total expenditure increased by 5.7% in the fourth quarter of 2024, compared with last year’s corresponding quarter, where taxes on wages and salaries increased by 9.1% and interest expenses increased by 4.9%.
Social benefits other than social transfers in kind are estimated to have increased by roughly 10% in the fourth quarter of 2024, compared with last year’s corresponding quarter, equivalent to 14.4% of household total income in the quarter. The household sector net social contribution increased by 4.4% in the fourth quarter of 2024, compared with last year’s corresponding quarter.
Revised figures
Figures for previous years have been revised. The main changes related to the February release of the new production approach is that D.1-wages, D.61-social contributions, P.2-intermediate consumption, P.1-Output and D.1-cost of wages are shifting in line with the new figures. This affects disposable income of households for the years 2018-2023.
The methodology has also been aligned with government finance statistics. This includes changes to D.7-other current transfers of households. This change affects the entire time series.
These are preliminary figures based on the best available information and thus Statistics Iceland will publish revised figures when exhaustive information is available, e.g. tax returns from corporations and individuals.