Average total income of individuals in Iceland amounted to just over 10.5 million ISK in 2025, or approximately 875 thousand ISK per month. This represents an increase of 5.7% from the previous year. Adjusted for price changes over the period, the real increase was 1.6%. The median total income was approximately 8.8 million ISK, meaning that half of individuals had total income below 730 thousand ISK per month. The median total income increased by 5.6% compared with the previous year, corresponding to a real increase of 1.5% after adjusting for inflation.
Total income is the sum of employment income, capital income and other income. Average employment income amounted to approximately 7.2 million ISK in 2025, while average capital income was around 1.2 million ISK and average other income approximately 2.2 million ISK. Employment income includes all wages and salaries, work-related income, vehicle allowances, daily allowances and fringe benefits. Capital income includes interest income, dividends, capital gains and rental income outside business operations. Income from self-employment and business activities is also classified as capital income. Other income includes pension payments, benefits from the Social Insurance Administration, and other transfer payments such as unemployment benefits, interest subsidies and child benefits.
Composition of income among men and women
In 2025, average total income among women amounted to just over 790 thousand ISK per month, compared with more than 960 thousand ISK among men. Among individuals aged 25 to 64 years, average total income was 897 thousand ISK per month for women and 1,088 thousand ISK for men.
Employment income generally constitutes the largest component of total income, although other income accounts for a larger share among older age groups. When examined by five-year age groups, employment income is higher among men than women in all cases. Differences in employment income between men and women can, among other factors, be attributed to differences in working hours, occupations and industries.
On average, capital income is also higher among men than women. Among individuals aged 25 to 64 years, average capital income amounted to 98 thousand ISK per month for men, compared with 88 thousand ISK for women.
Other income is generally higher among women than men through much of the life course. For example, among individuals aged 25 to 64 years, average other income amounted to 129 thousand ISK per month for women compared with just under 92 thousand ISK for men. This pattern is reversed among those aged 65 years and older, where average other income is somewhat higher among men.
Income statistics based on tax returns
Statistics Iceland has updated detailed statistics on individual income for the period 1990 to 2025, broken down by municipality, age, educational attainment and sex. The data include information on total income, employment income, capital income, disposable income, other income and taxes, presented as averages, medians, distributions and counts. Disposable income is defined as total income less taxes and pension fund contributions.
The statistics are based on the tax returns of individuals aged 16 years and older who are liable for taxation in Iceland and who submitted a tax return to the Directorate of Internal Revenue. Excluded from the statistics are individuals with manually processed tax returns, estimated income assessments, those who died during the year, and persons not considered residents of Iceland according to Statistics Iceland's population methodology.
The data is comparable over time, as harmonised methods are applied consistently from year to year. It should be noted, however, that the increasing use of pre-filled tax return information in recent years has reduced the number of tax returns excluded from the statistics and improved data quality. This may have some effect on year-to-year comparisons.