Employer of Record Iceland

Think of it like this: Agility EOR becomes the legal employer of your employees, taking care of all the paperwork and compliance headaches.

Agility EOR

• We manage the onboarding process and ensure everything’s in order before your employee starts
• We make sure your employees are treated fairly and compliantly in their relevant territory
• We take care of all HR matters, and can answer any and all HR queries you may have e.g. maternity/paternity leave, holidays, sick pay, and more
• We provide compliant contracts, process local payroll, and file taxes
• We issue payslips and handle payments to the employee and authorities

Your Company

• You find and manage your employees’ daily tasks
• You support their development through their work
• You follow our guidance on employment laws and best practices
• You ensure payroll bills are paid to Agility EOR on time

Benefits of using an Employer of Record (EOR)

• Faster and easier hiring: No need to set up your own legal entity.
• Reduced risk and compliance burden: We handle the legal and administrative complexities.
• More time and resources: Focus on your core business while we manage your employees.

Employees working for an Iceland Employer of Record are entitled to legal protections and a standard employment contract. This includes statutory benefits such as maternity leave, annual leave, and sick pay, as well as any applicable tax credits. It’s important to note that the Iceland public healthcare system covers all residents, not just employees.

Yes, as long as the worker is working for other companies, is able to decide how to do their own work, and can send another contractor in their absence.

In Iceland, a worker solely dedicated to your company and whose duties and tasks are dictated by your organization must be classified as an employee. Failing to do so constitutes a breach of Iceland employment law.

Misclassifying an employee in Iceland can lead to substantial fines, the obligation to pay outstanding holiday pay and social security contributions, the potential need to establish a local presence, and even legal action from the employee for breached employment rights.

The initial steps to establishing your business in Iceland involve registering it with the Commercial Register and obtaining a trade license from the relevant authorities.

While the initial registration process appears simple, establishing a physical office for tax purposes, opening a Iceland bank account (which often requires in-person presence), managing payroll software compliant with Iceland regulations, and fulfilling tax filing obligations add complexities to the overall setup.

Hiring people in Iceland means adhering to specific legal obligations. In simpler terms, HR compliance ensures your company strictly follows all employment and work practice regulations.

But why is it so important? HR compliance in Iceland goes beyond mere formalities; it safeguards both your employees and your business. Following employment regulations guarantees fair treatment for your workforce, encompassing aspects like sick leave, annual leave, minimum wage, and appropriate working hours. This not only fosters a positive work environment but also minimizes the risk of financial penalties, legal repercussions, and even lawsuits arising from non-compliance.

Partnering with Agility EOR as your Employer of Record in Iceland simplifies tax and social security obligations. We manage all employee-related filings and contributions, ensuring complete compliance, so you can focus on running your business with peace of mind.

While Agility EOR handles the complexities of Iceland employment law and compliance, your company is still responsible for day-to-day management and communication with your team, such as addressing performance issues, taking disciplinary actions as needed, and fostering a positive work environment through open communication.

Agility EOR handles the legal side of things in Iceland, so you can focus on managing your team and their daily tasks.

Both employers and employees in Iceland contribute to the tax system, with employers withholding income tax from employee salaries and remitting it to the tax authorities, while both parties contribute to Social Security and VAT.

Employees working for an Iceland Employer of Record are entitled to legal protections and a standard employment contract. This includes statutory benefits such as maternity leave, annual leave, and sick pay, as well as any applicable tax credits. It’s important to note that the Iceland public healthcare system covers all residents, not just employees.

Agility EOR handles the administrative burden of HR compliance for you:

Trusted Partners: Agility EOR works with Iceland’s leading employment lawyers and advisors. This ensures that your employment contracts and other important documents strictly follow all local legal requirements.

In-Depth Knowledge: We have a thorough understanding of all aspects of Iceland employment law, such as payroll, social security, data privacy, notice periods, and remote work regulations.

Swift Action: If an issue arises, our internal team is immediately available to help and assist.