Iceland · Work
Iceland Labour shortage work permit
Income needed: ISK 260k+ a month ≈ $2,130
Residence and work permit due to shortage of labour
Checked against official sources on Change log
Key facts
Labour shortage work permit is a work route for Iceland. Applicants need income of ISK 260k+ a month ≈ $2,130. You can stay 1 yr, renewable. Local work: limited. Checked 2026-10-12 against the official source.
- Money needed
- ISK 260k+ a month ≈ $2,130
- Government fees
- ISK 80k ≈ $660
- First stay
- 1 yr
Cost, time and long term
To apply: government fee ISK 80k ≈ $660; income to show ISK 260k+/mo ≈ $2,130. No lawyer or agent fee is included.
Government feesISK 80k ≈ $660
- ISK 80,000 (≈ $660)Processing fee for a residence permit based on work.
Shown, not spentISK 260k+/mo ≈ $2,130
- ISK 259,951 a month (≈ $2,130)Minimum secure means of support for an individual, before tax, for as long as the permit is valid (equal to the basic financial assistance of the City of Reykjavík).
RenewalRenewable
The first permit is up to one year and can be renewed for up to two years at a time while the conditions are still met, never longer than the work permit; the employer must advertise the job again at renewal unless exempt.
Directorate of Labour and Directorate of ImmigrationDirectorate of Immigration
Permanent residenceAfter 4 years of residence
Permanent residence after 4 continuous years on a permit that can serve as its basis, such as expert-knowledge work, labour-shortage work, athlete or family permits. The applicant must also have attended at least 150 lessons of Icelandic for foreigners with at least 85% attendance, or passed the Icelandic test for foreigners, and must not have been abroad for more than 90 days in any year of the permit.
CitizenshipAfter 7 years of residence
Citizenship needs 7 years of legal domicile and continuous residence; stays abroad over 90 days in a 12-month period do not count.
Where to applyAbroad or in-country
Applicants who need a visa to travel to Iceland must be outside Iceland while applying; visa-free nationals may be in Iceland during a legal stay.
Presence rulesStay rule
The residence permit can be revoked if you stay abroad for more than three consecutive months.
Why this route may not fit
Check this before you apply.
- Needs a job offer from an employer in Iceland
- Work rights are limited
- Not open to EU, EEA or Swiss passports
What you'll need
Who can apply5
- The applicant is 18 or older and has an employment contract with a specific employer.
- The employer has asked the Directorate of Labour to find an employee in Iceland, the EEA, EFTA states or the Faroe Islands.
- The employer gives detailed reasons why a worker from outside the EEA, EFTA states or Faroe Islands is needed.
- Permits are granted only in exceptional circumstances to answer temporary swings in the labour market.
- Applicants who need a visa to travel to Iceland may not be in Iceland when applying or during processing.
What you must show2
- Secure means of support of ISK 259,951 (≈ $2,130) a month before tax for the whole period of the permit.
- Processing fee: ISK 80,000 (≈ $660).
Documents4
- An employment contract stating all wage figures in line with the relevant collective agreement.
- Proof of the employer's attempts to hire, and a justification of why the foreign worker is needed.
- Health insurance valid in Iceland with at least ISK 2,000,000 (≈ $16,400) cover for three months from registering a legal domicile.
- A criminal record certificate from the country of residence, not older than 12 months.
Steps1
- The Directorate may ask the employer to advertise the job through the Directorate of Labour and EURES, ideally for three weeks.
After you arrive3
- A first permit for a specific job is granted for up to one year at a time.
- Seasonal jobs can be granted for the season, and permits can be renewed for up to two years.
- Holders who lose their job can get a six-month permit to look for another job.
When you become tax resident
How Iceland decides tax residence and treats foreign-source income, from its tax records.
- Stay on this route
Up to 1 year at first, renewable
- Tax residence
A person staying in Iceland for six months or more in a twelve-month period is a resident with unlimited tax liability from the day of arrival; municipal tax is 14.94% on average and included in the brackets.
- Foreign-source income
Employment income less the mandatory pension fund contribution; residents are taxed on worldwide income, non-residents on income from Icelandic sources.
All tax rules for Iceland Tax records checked
What you need to arrange
- Health insurance
Health insurance valid in Iceland with at least ISK 2,000,000 (≈ $16,400) cover for three months from registering a legal domicile
- Police certificate and civil documents
A criminal record certificate from the country of residence, not older than 12 months
Taken from this route's requirements above. The authority's own list is the one that counts.
Full official text
Residence permit for a job where the employer shows no suitable worker could be found in Iceland, the EEA, EFTA states or the Faroe Islands; granted only in exceptional circumstances. 1 2 3 4
What you must show and pay
- Income of at least ISK 259,951 a month (≈ $2,130) · Minimum secure means of support for an individual, before tax, for as long as the permit is valid (equal to the basic financial assistance of the City of Reykjavík). 1
- A fee of ISK 80,000 (≈ $660) · Processing fee for a residence permit based on work. 1
Requirements
- The applicant is 18 or older and has an employment contract with a specific employer. 1 2
- The employer has asked the Directorate of Labour to find an employee in Iceland, the EEA, EFTA states or the Faroe Islands. 2
- The employer gives detailed reasons why a worker from outside the EEA, EFTA states or Faroe Islands is needed. 2
- Permits are granted only in exceptional circumstances to answer temporary swings in the labour market. 2
- Applicants who need a visa to travel to Iceland may not be in Iceland when applying or during processing. 1
- Secure means of support of ISK 259,951 (≈ $2,130) a month before tax for the whole period of the permit. 1
- Processing fee: ISK 80,000 (≈ $660). 1
- An employment contract stating all wage figures in line with the relevant collective agreement. 1
- Proof of the employer's attempts to hire, and a justification of why the foreign worker is needed. 1
- Health insurance valid in Iceland with at least ISK 2,000,000 (≈ $16,400) cover for three months from registering a legal domicile. 1
- A criminal record certificate from the country of residence, not older than 12 months. 1
- The Directorate may ask the employer to advertise the job through the Directorate of Labour and EURES, ideally for three weeks. 2
- A first permit for a specific job is granted for up to one year at a time. 2 4
- Seasonal jobs can be granted for the season, and permits can be renewed for up to two years. 2 4
- Holders who lose their job can get a six-month permit to look for another job. 4
Stay
- First permit up to one year for a specific job; renewable for up to two years at a time; the employer must advertise the job again at renewal unless exempted.
- First stay: up to 12 months, decided case by case.
- Renewable, subject to the conditions in force at renewal.
Nationality
Nationals of countries outside the EEA and EFTA. Not open to: Austria, Belgium, Bulgaria, Switzerland, Cyprus, Czechia, Germany, Denmark, Estonia, Spain, Finland, France, Greece, Croatia, Hungary, Ireland, Iceland, Italy, Liechtenstein, Lithuania, Luxembourg, Latvia, Malta, Netherlands, Norway, Poland, Portugal, Romania, Sweden, Slovenia, Slovakia.
Work
Work only for the employer named in the work permit; a new employer needs a new work permit before starting.
Family
Marital spouse, cohabiting spouse after one year of cohabitation, children under 18 in the holder's custody and parents aged 67 or older can apply for family reunification.
Official sources
- Residence permit based on work · Directorate of Immigration of Iceland (Ísland.is) · checked 2026-10-11
- Apply for a work permit: shortage of employment · Directorate of Labour and Directorate of Immigration (Ísland.is) · checked 2026-10-11
- Apply for a work permit · Directorate of Labour and Directorate of Immigration (Ísland.is) · checked 2026-10-11
- Residence permit based on work: rights and obligations · Directorate of Immigration (Útlendingastofnun) · checked 2026-10-11
- Permanent residence permit · Directorate of Immigration of Iceland (Ísland.is) · checked 2026-10-11
- Application for Icelandic citizenship: when can I apply · Directorate of Immigration (island.is) · checked 2026-10-11
- Residence permit based on work: application and fee · Directorate of Immigration (Útlendingastofnun) · checked 2026-10-11
Labour shortage work permit and its alternatives
| Route | Money needed | Stay | Work |
|---|---|---|---|
| Labour shortage work permit | Needs income of ISK 260k+ a month ≈ $2,130 | 1 yr, renewable | Limited |
| Athlete permit | Needs income of ISK 260k+ a month ≈ $2,130 | 2 yr, renewable | Limited |
| Expert work permit | Needs income of ISK 260k+ a month ≈ $2,130 | 4 yr, renewable | Limited |
| Service contract permit | Needs income of ISK 260k+ a month ≈ $2,130 | 1 yr, renewable | Limited |
| Blue Card Portugal | Needs income from €1,726 a month ≈ $1,930 | 2 yr, renewable | Limited |
Questions people ask
How much money do I need for the Labour shortage work permit?
Income of at least ISK 259,951 a month (≈ $2,130). Minimum secure means of support for an individual, before tax, for as long as the permit is valid (equal to the basic financial assistance of the City of Reykjavík). A fee of ISK 80,000 (≈ $660). Processing fee for a residence permit based on work.
How long can I stay on the Labour shortage work permit?
First permit up to one year for a specific job; renewable for up to two years at a time; the employer must advertise the job again at renewal unless exempted.
Can I work on the Labour shortage work permit?
Limited. Work only for the employer named in the work permit; a new employer needs a new work permit before starting.
Can I bring my family on the Labour shortage work permit?
Marital spouse, cohabiting spouse after one year of cohabitation, children under 18 in the holder's custody and parents aged 67 or older can apply for family reunification.
Who can apply for the Labour shortage work permit?
Nationals of countries outside the EEA and EFTA. Not open to: Austria, Belgium, Bulgaria, Switzerland, Cyprus, Czechia, Germany, Denmark, Estonia, Spain, Finland, France, Greece, Croatia, Hungary, Ireland, Iceland, Italy, Liechtenstein, Lithuania, Luxembourg, Latvia, Malta, Netherlands, Norway, Poland, Portugal, Romania, Sweden, Slovenia, Slovakia.
Does the Labour shortage work permit lead to permanent residence in Iceland?
Time on the Labour shortage work permit counts toward permanent residence in Iceland, which the rules allow after 4 years of residence. Time on the Labour shortage work permit counts toward citizenship, which the rules allow after 7 years of residence.
How are Labour shortage work permit holders taxed in Iceland?
No special regime in our records is tied to the Labour shortage work permit. The standard rules apply: Employment income is taxed in three monthly brackets: 31.49% up to ISK 498,122, (≈ $4,080) 37.99% up to ISK 1,398,450 (≈ $11,500) and 46.29% above, including municipal tax.
More in Iceland
Work visas elsewhere
≈ USD figures are approximate: daily reference rates from ExchangeRate-API, dated 12 Oct 2026, refreshed when the site is updated.
Ask the AI about this route AI
An AI assistant answers from the published records on this page and cites them. It can't assess your personal eligibility. Don't include personal details.
How this was checked
Checked on 2026-10-12 against 7 official sources. Status: verified against the official sources.
Every figure on this page comes from the official source it links to. The record was researched against these sources, then reviewed separately, with special attention to effective dates and amendments. Where a source does not state something, the page leaves it out.
- Residence permit based on work · Directorate of Immigration of Iceland (Ísland.is) · checked 2026-10-11
- Apply for a work permit: shortage of employment · Directorate of Labour and Directorate of Immigration (Ísland.is) · checked 2026-10-11
- Apply for a work permit · Directorate of Labour and Directorate of Immigration (Ísland.is) · checked 2026-10-11
- Residence permit based on work: rights and obligations · Directorate of Immigration (Útlendingastofnun) · checked 2026-10-11
- Permanent residence permit · Directorate of Immigration of Iceland (Ísland.is) · checked 2026-10-11
- Application for Icelandic citizenship: when can I apply · Directorate of Immigration (island.is) · checked 2026-10-11
- Residence permit based on work: application and fee · Directorate of Immigration (Útlendingastofnun) · checked 2026-10-11
Tracked since 2026-10-10. Rule changes and corrections are listed on the changes page, and the methodology page explains how facts are checked. Found something out of date? Email contact@stayglobe.app with a link to the official source.