EUROCOSTSCOUNTRY COMPARISON · UPDATED 2026-07-15
Iceland vs Norway: taxes, salary and cost of living
Iceland and Norway present two different cost profiles: the first question is whether the salary gap compensates for housing and daily expenses.
Iceland vs Norway at a glance
| Indicator | Iceland | Norway |
|---|---|---|
| Standard VAT | 24% | 25% |
| Income tax | 16.55-46.29% | 22-47.4% |
| Social contributions | ~22% | 22.1% |
| Tax burden | 29.5% | 36.6% |
| Average monthly salary | €6,350 | €5,850 |
| Studio rent | €1,450 | €1,170 |
| Monthly food estimate | €500 | €450 |
| Gasoline | 1.95 €/L | 1.92 €/L |
| Electricity | 0.16 €/kWh | 0.17 €/kWh |
Salary advantage and purchasing power
Iceland records the higher listed monthly salary. The gap is €500, approximately 8.5% relative to the lower figure. Within the numeric EuroCosts sample, Iceland ranks 4 of 27 for salary and Norway ranks 5 of 27. Currency conversion and salary methodology can materially change a relocation budget.
Housing pressure and everyday spending
Norway has the lower listed studio rent by €280, a 23.9% difference relative to the higher rent. Iceland sits 34 of 37 and Norway 31 of 37 in the available low-to-high rent ranking. Norway 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 €4,230 in Norway. This leaves €170 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 7.1 percentage points. Standard VAT is 24% in Iceland versus 25% in Norway. Neither measure is a substitute for an individual payroll simulation.
Driving and mobility costs
Norway has the lower listed gasoline price by €0.03 per litre. For a driver buying 50 litres a month, that headline difference is about €1.5 monthly, before insurance, parking and road charges.
Choosing by relocation scenario
For Iceland and Norway, short stays are influenced heavily by rent and restaurant prices; permanent relocation adds payroll, healthcare and administrative costs. These figures work best as a shortlist, not a final decision model.
Where the comparison lands
Iceland produces the stronger simplified monthly remainder in this dataset, while Norway 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 Norway comparisons