Taxes
Calculated remuneration is not your invoice total.
- Updated
- Sources reviewed
- Tax year
- 2026
Calculated remuneration (reiknað endurgjald) is the salary a self-employed person pays themselves for work in their own business. Skatturinn publishes annual reference amounts in categories A–H by type of work and education, and calculated remuneration may not be below the category reference without a justification Skatturinn accepts. Withholding, 15.5% pension and 6.35% social security are paid on it monthly, and entitlement to benefits and pension is based on it.
Key figures
- What it is
- the salary you pay yourself in your own business
- Minimum
- reference category A–H
- published annually by Skatturinn
- Charges on it
- withholding, 15.5% pension, 6.35% social security
- Determines
- entitlement to benefits and pension
An invoice shows the sale for a project. Calculated remuneration concerns pay for your own work in the business. Understanding the difference helps you discuss the correct inputs before calculations are made.
What does the term mean?
A person working in their own business must calculate remuneration for that work. Skatturinn publishes annual guidance reflecting the work and circumstances. The benchmarks relate to comparable pay for work performed for an unrelated party. Skatturinn: calculated remuneration in 2026.
Do not select a figure from an old example at random. Use the relevant year, describe the actual work and understand why a particular input applies to you.
Prepare for the discussion
Write down:
- The kind of work you perform and its extent.
- Whether you also have a paid job elsewhere.
- How the business’s activity and income have changed.
- The amount currently registered and who confirmed it.
- Questions that need answering before the next period is processed.
This list prepares you for a review; it is not a formula that automatically produces the correct result. Take it with you when asking Skatturinn or an adviser for help.
Keep the records consistent
Once the appropriate basis is established, check that the correct period and amount are used in payroll processing. Retain an explanation of changes so you and anyone helping you can follow what happened.
Payroll from Fustle supports calculations and agreed filings for sole traders. You need to provide accurate, current information. Opening an account does not, by itself, determine your individual tax position.
Quick answers
Is calculated remuneration all the money received by the business? No. Do not use these concepts interchangeably.
Can I keep using last year’s benchmark? Check the current guidance and confirm the inputs.
Sources checked 23 September 2026. A general explanation of the concept, not a determination of your remuneration.
Frequently asked questions
What if my income is below the reference amount?
You can apply to Skatturinn for a reduction with a justification, for example part-time work or a newly started business. Without approval the category reference is used at assessment.
Can I pay myself more than the reference?
Yes. Higher calculated remuneration means higher withholding and charges in the month but also higher entitlements and lower profit taxed through the return.
How is the category chosen?
By the nature of the work and education or experience according to Skatturinn's descriptions for each year. The category is recorded in RSK 5.02 and changed with a new notification.
Sources
- Skatturinn — reiknað endurgjald 2026, viðmiðunarflokkarskatturinn.is/atvinnurekstur/stadgreidsla-og-reiknad-endurgjald/reiknad-endurgjald/2026/reiknad-endurgjald-2026
- Skatturinn — staðgreiðsla og reiknað endurgjald í rekstriskatturinn.is/atvinnurekstur/stadgreidsla-og-reiknad-endurgjald/
- Skatturinn — tryggingagjaldskatturinn.is/atvinnurekstur/skattar-og-gjold/tryggingagjald
- Lög um tekjuskatt nr. 90/2003althingi.is/lagas/nuna/2003090.html
- Lög um staðgreiðslu opinberra gjalda nr. 45/1987althingi.is/lagas/nuna/1987045.html
General information, not advice on your situation. Skatturinn and other authorities assess each case. Check the review date and sources before relying on a figure.
Related content
- TaxesTaxes and contributions for the self-employedWhich taxes and contributions does a contractor in Iceland pay in 2026? Income tax in three brackets, personal tax credit of 72,492 ISK, social security 6.35%, pension 15.5% and VAT. How they add up and when to file.
- TaxesWithholding tax: monthly filing on your own salaryHow a self-employed person in Iceland files withholding tax on calculated remuneration: what the return contains, due date on the 1st and final due date on the 15th of the next month, surcharges, wage statements and how withholding is settled at assessment.
- Contributions and pensionGive social security contributions their own line.Understand tryggingagjald, its place in payroll and the records you need to review calculations, filings and payments for your business.
- Rights and benefitsRights of the self-employed: what the contributions give youWhat entitlements does a contractor earn through social security and pension contributions? Unemployment benefit, parental leave, sickness benefit, accident insurance, disability and retirement pension. The conditions, and why calculated remuneration sets the amounts.
- Getting startedRSK 5.02: registering as an employer and for VATWhat RSK 5.02 is, who must file it, the 8-day rule, what to fill in and how the electronic registration works. A guide for contractors and the self-employed in Iceland.
- CalculatorsPayroll calculator for contractorsCalculate what you take home from an invoice as a contractor in Iceland in 2026, or what you need to invoice for a target salary. Tax brackets, personal tax credit, pension and social security in one calculation.
Where does Fustle fit in?
Record the work and create the invoice. The service you choose determines the support included.