Reiknað endurgjald 2026: what it is and what to pay yourself

Kassify · 6 November 2026

Reiknað endurgjald, calculated remuneration, is the salary you must set for yourself for work in your own business, whether the business runs on your own kennitala or in an ehf. you control. The minimum depends on the work and the number of staff: in 2026 it is, for example, 933.000 kr. a month for an owner in retail or services who works alone or with one employee, and you pay withholding tax, social security tax and pension contributions on it like any other salary.

Below are Skatturinn's categories for 2026, how to find yours, the due dates, a worked example in krónur and the mistakes that cost the most.

Who must calculate remuneration

The rule is in paragraph 2, item 1, section A of article 7 and article 58 of the Income Tax Act no. 90/2003, and the Director of Internal Revenue sets the minimum every year. For 2026 these are rules no. 1558/2025, published in the B section of the Official Gazette on 30 December 2025. Remuneration is calculated by:

• Anyone running a business on their own kennitala, for example a carpenter, a consultant or a hairdresser.
• Anyone working in a business they own jointly with others, for example in a partnership.
• Anyone working for a company, such as an ehf., where they are a controlling party. You are one if you own 5% or more yourself and, alone or with a spouse, children, parents, siblings, other close relatives or other working shareholders, own 50% or more of the company.
• A spouse, a child under 16 and other close relatives who work in the business, under category H.

The rule does not apply to shareholders working for a company listed on a public securities market. The remuneration should never be lower than what you would earn for the same work for an unrelated party.

The categories and the 2026 minimums

Skatturinn divides work into categories A to H. These are the general categories, A to E, with the monthly minimum. The staff count is the people working with you, and payments to contractors for bought-in work count like staff wages.

Category F covers seafarers, G farmers and H spouses and children working in a business. A tradesperson or someone in category E who manages more than five staff moves to B(1) to B(3). If the owner gets a car or other benefits, they come on top of the minimum.

On 5 November 2026 the 2026 rules are the newest on Skatturinn's site. The 2027 rules are published in the B section of the Official Gazette once the Director of Internal Revenue has set them.

How to find your category

1. 1
   The work

   Specialist training you work in goes in A, health professions and bookkeeping services in C, a licensed trade in D and work with no trade training in E. Everything else goes in B, including retail, restaurants and contracting.

2. 2
   The number of staff

   Count your staff and add the contractors you buy work from, converted to annual salaries. If two owners manage together, the number is split between them.

3. 3
   The first year

   The categories ending in 9 apply only in the first year, and only to someone starting their own business for the first time.

4. 4
   Another job

   If you hold another salaried job, the reference amount may be cut by what that salary exceeds 50% of the reference amount, but never below 25% of it.

5. 5
   The market salary

   Compare the category with what you would earn elsewhere. If you sell your staff's work, your remuneration may never be lower than the salary of an employee with similar training, experience and workload.

How it is paid and reported

Calculated remuneration is handled like any other salary. The difference is whether it is paid out or only calculated.

Withholding tax and social security tax go to Skatturinn on one return every month. The due date is the 1st of the month after the pay month and the final date is the 15th of that month. If the final date falls on a Saturday, Sunday or public holiday, it moves to the next working day, under regulation no. 13/2003. A return is also needed in a month when no salary is paid.

The pension contribution goes to the pension fund on a separate return, with union dues where they apply. The due date is set by the fund's rules. At Íslenski lífeyrissjóðurinn it is the 10th of the next month, and late interest runs if the payment does not arrive within that month.

Three exceptions matter to a small business. If the estimated remuneration is under 700.000 kr. a year, it falls outside withholding. If it is so low that no withholding tax arises in the year, you can apply to file the "Skilagrein vegna reiknaðs endurgjalds" once a year. And if the remuneration and wages to others together stay under 504.000 kr. in the year, social security tax can be filed once a year.

A worked example in krónur

Let us assume Anna owns all the shares in an ehf. that runs a shop. She manages it and one employee works with her, so she falls in category B(5), and let us assume she pays herself exactly the minimum. The rates come from Skatturinn and Ísland.is.

Over a year the remuneration is 11.196.000 kr., the annual amount in category B(5). Withholding tax is calculated on the salary as for any other employee. How it is calculated, with the tax brackets and the personal tax credit, is in the article on the payslip.

If Anna hires a second employee she moves to B(4), and the minimum rises to 1.173.000 kr. a month. If she pays herself only 600.000 kr., the company still has to pay withholding tax as if the salary were 933.000 kr., because for work for a company the rule uses the reference amount.

Salary or dividends

Salary lowers the company's profit, while a dividend is paid from profit after the company's 20% income tax and carries 22% capital income tax for you, and it does not replace calculated remuneration. How a dividend is decided and paid is in the article on share capital and dividends.

The mistakes people make

• The starter category runs on. B(9) is 681.000 kr. and B(5) 933.000 kr. In the second year the minimum rises by 252.000 kr. a month, and withholding has to rise with it.
• Contractors are left out. Invoices for bought-in work count as staff and can move you up a category.
• A lower salary in the ehf. than the reference amount. Withholding is still based on the reference amount. The gap shows up when the tax return is reviewed.
• Dividends instead of salary. The Director of Internal Revenue raises the remuneration to the reference amount if he does not accept the reasons for a lower one.
• A lower amount without documents. Skatturinn departs from the minimum only on written explanations and documents, such as on results, billed work and other jobs.
• The company car is forgotten. Car benefits are valued under the tax assessment rules and come on top of the category.
• No return in an empty month. The return has to arrive even when no salary is paid that month.
• The wrong final date. 15 November 2026 is a Sunday, so the final date for October salaries is 16 November. Payment after the final date carries a surcharge and late interest.

Kassify handles calculated remuneration

Kassify is a whole finance department for one fixed price: an accounting firm that uses AI, with certified bookkeepers and chartered accountants behind the work. The owner's calculated remuneration is part of payroll, and you need neither separate payroll software nor a memory for due dates.

• Payslips, withholding tax and pension returns every month. Withholding tax and social security tax reach Skatturinn before the due date on the 15th, and pension returns go to the funds and unions.
• The annual accounts and tax return included in the monthly price, prepared by a chartered accountant, so the remuneration and the return agree.
• Bookkeeping, payroll, VAT returns and the app for a fixed monthly price, 20% below a traditional accounting firm. You get the price in writing before you decide.
• Each bank connected directly and 0 manual entries. A bookkeeper replies within 24 hours when you hire or a question about your category comes up.
• The move in less than 7 days, included in the price. Kassify talks to your old bookkeeper and the payroll history comes with you.

More on Kassify's payroll. If you are setting up a company, the steps are in the article on how to start an ehf.

Questions

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