The annual personal income in Iceland was 7.7 million ISK on average in 2021 or roughly 640 thousand ISK per month. The median annual personal income was 6.0 million ISK or 500 thousand ISK per month, indicating that half of the individuals had a total income over 500 thousand ISK per month.
A comparison of total income by age group shows that the average annual personal income was highest, about 10 million ISK, for 45-49 year olds, 50-54 year olds and 55-59 year olds. The total income of those aged 67 years and older was more than 7 million ISK.
Total income consists of income from work, capital gains and other income. In most age groups, income from work is the largest part of the total income, which decreases proportionally with higher age. Proportion of income from work was 78.5% for 25-64 year olds in 2021, but about 14% for those aged 67 years and older. Proportion of other income for 67 years old and older was over 70%. Other income includes e.g. income from unemployment benefits, social insurance administration and pension funds.
Of the total income in 2021, employment income was 68.2%, capital income 9.2% and other income 22.6%. Proportion of employment income was almost the same as in the previous year and has not fallen below 70% since 2010. Proportion of other income decreased from the previous year, which is partly explained by decreased payments of unemployment benefits. Unemployment benefits increased significantly in 2020, mainly due to the effects of the coronavirus epidemic.
About income statistics from tax returns
Statistics Iceland has published statistics on personal income for the period 1990 to 2021 by municipality, age and sex. This comprises total income as well as income from earnings, capital gains and disposable income including other income and taxes. Results are based on individuals’ tax returns.