All wage increases, i.e. amounts, are in ISK, and the wages of low-income workers will increase more proportionately than those with higher wages. The increase in pay scales during the effective term of the agreement is a total of ISK 90,000, while the general increase is ISK 68,000. All wages will increase by the same amount during the first year. During 2020 to 2022, the pay scales will increase more in ISK than wages that are in excess of the rates.

The annual wage increase involves the following: a fixed ISK amount increase, increases linked to economic growth and revision in light of the developments of the wage index in the labour market.

Wage increases

All wage increases, i.e. amounts, are in ISK, and the wages of low-income workers will increase more proportionately than those with higher wages. The increase in pay scales during the effective term of the agreement is a total of ISK 90,000, while the general increase is ISK 68,000. All wages will increase by the same amount during the first year. During 2020 to 2022, the pay scales will increase more in ISK than wages that are in excess of the rates.

2019 = All wages increase by ISK 17,000 per month as of 1 April.
2020 = Rates increase by ISK 24,000 per month, while the general increase is ISK 18,000 as of 1 April.
2021 = Rates increase by ISK 24,000 per month, while general increases will be ISK 15,750 as of 1 January.
2022 = Rates increase by ISK 25,000 per month, while general increases will be ISK 17,250 as of 1 January.

Holiday bonuses

  • 2019: 50.000 kr
  • 2020: 51.000 kr
  • 2021: 52.000 kr
  • 2022: 53.000 kr

In addition a special 26.000 kr. holiday bonus increase will be paid to everyone before 2 May 2019. Holiday bonus for 2019 is in total 76.000 kr. 

December bonuses

2019: 92.000 kr 
2020: 94.000 kr
2021: 96.000 kr
2022: 98.000 kr

Wage increases 2019-2022

 

The economic growth increase ensures that the share of wage earners in value creation remains stable

Economic growth per person Economic increase
>1,0% +3.000 kr.
>1,5% +5.500 kr.
>2,0% +8.000 kr.
>2,5% +10.500 kr.
>3,0% +13.000 kr.
   
  • Statistics Iceland (Hagstofan) publishes economic growth per person figures in March of each year.
  • Wage increases, therefore, will take place in May.
  • The annual contractual wage increase consists of base pay increases and wage premiums.

The economic increase is added in full on rate-of-pay wages, while 75% goes to general increases.

Pay adjustment guarantees before pay scale wages

The third aspect of the wage increase involves pay adjustment guarantees for pay scale wages, which will be paid on an annual basis to ensure that the members who are paid according to pay scale rates follow general wage increases in the event of a wage drift in the mainstream labour market.

The pay adjustment guarantee is an ISK amount increase that is added to the wage rate on 1 May each year.

A comparison is made of the wage developments of certain wage rates and wage developments according to the wage index between the months of December each year. In the event that the wage index increases more than the reference rate, all wage rates in collective wage agreements shall increase by the same amount in ISK, which is calculated as the proportion of the excess increase from the pay scale.