Icelanders may pay more in taxes than they realise

A new calculator from the Chamber of Commerce shows that taxes can account for a far larger share of household income than people may realise, mbl.is reports. The tax burden is also expected to increase around the turn of the year under the new budget proposal.

Ragnar Sigurður Kristjánsson, an economist at the Chamber of Commerce, said income tax and municipal tax did not tell the whole story. Taxes are also paid on all consumption, he said, but the total burden is not obvious in the daily lives of typical Icelanders.

An Icelander earning the median income, owning a property and a petrol-powered car, and facing typical household expenses can expect approximately 325,000 Icelandic krónur, or 41 per cent, of a monthly salary of 826,000 krónur to go towards various taxes.

The calculator allows people to estimate how much tax they pay in total.