EUROCOSTSCOUNTRY COMPARISON · UPDATED 2026-07-15
Iceland vs Italy: taxes, salary and cost of living
A move between Iceland and Italy is not simply a choice between a cheap and an expensive country; income, rent and taxation pull the result in different directions.
Iceland vs Italy at a glance
| Indicator | Iceland | Italy |
|---|---|---|
| Standard VAT | 24% | 22% |
| Income tax | 16.55-46.29% | 23-43% |
| Social contributions | ~22% | ~42% |
| Tax burden | 29.5% | 47.1% |
| Average monthly salary | €6,350 | €3,312 |
| Studio rent | €1,450 | €726 |
| Monthly food estimate | €500 | €320 |
| Gasoline | 1.95 €/L | 1.74 €/L |
| Electricity | 0.16 €/kWh | 0.3 €/kWh |
Salary advantage and purchasing power
Iceland records the higher listed monthly salary. The gap is €3,038, approximately 91.7% relative to the lower figure. Within the numeric EuroCosts sample, Iceland ranks 4 of 27 for salary and Italy ranks 12 of 27. Currency conversion and salary methodology can materially change a relocation budget.
Housing pressure and everyday spending
Italy has the lower listed studio rent by €724, a 99.7% difference relative to the higher rent. Iceland sits 34 of 37 and Italy 19 of 37 in the available low-to-high rent ranking. Italy also has the lower food estimate, so the housing result is reinforced by groceries.
After subtracting only the listed rent and food estimates, the simplified remainder is €4,400 in Iceland and €2,266 in Italy. This leaves €2,134 more in Iceland, before utilities, transport, healthcare, childcare or personal taxes not already reflected in salary.
VAT and personal tax context
Iceland has the lower listed tax burden by 17.6 percentage points. Standard VAT is 24% in Iceland versus 22% in Italy. Neither measure is a substitute for an individual payroll simulation.
Driving and mobility costs
Italy has the lower listed gasoline price by €0.21 per litre. For a driver buying 50 litres a month, that headline difference is about €10.5 monthly, before insurance, parking and road charges.
Choosing by relocation scenario
For a remote worker paid from abroad, housing and daily costs may matter more than the local salary ranking; on that narrow view, Italy deserves closer attention. A locally employed professional should instead begin with salary and payroll definitions.
Where the comparison lands
Iceland produces the stronger simplified monthly remainder in this dataset, while Italy leads on listed rent. Your income source determines which advantage matters more.
Sources and data references
- PwC standard VAT rates
- PwC personal income tax rates
- PwC corporate income tax rates
- EuroCosts data scope and generation process
Explore Iceland comparisons · Explore Italy comparisons