Private pension

Employees and self-employed people can pay up to 6% contribution of total wages to a private pension fund. This contribution is income-tax free, and employees receive an additional employer contribution of 2%.

It couldn’t be simpler?

Private contribution from wages	2%*	4%
Monthly wages ISK 150,000	3,000	6,000
Tax reduction	1,116	2,232
Employee's real contribution	1,884	3,768
Employer's contribution	3,000	3,000
Value of private pension	6,000	9,000

?at the same time the value of your real contribution is tripled

As shown in the table, your real contribution is tripled by saving 2% of ISK 150,000 wages per month. The value of your private pension is ISK 6,000, while your real contribution is only ISK 1,884. Therefore, your real contribution is only 31% of your private pension value: you receive the other 69% from your employer.

Employers pay the contribution to the private pension department of the employee's pension fund, unless the employee otherwise decides.

Starting your private pension is simple

You can have a contract sent to you to sign.

You can also print the contract and send it to the fund.

We then send your employer a copy of the contract.

Private pension saving is an important opportunity which all wage earners should consider.