Employer payroll
The taxation system in Iceland is the PAYE system (Pay-As-You-Earn). Taxes are deducted from all taxable incomes and consist of income taxes and municipal taxes normally paid on a monthly basis. As an employer, you must pay withholding taxes and other wage related expenses such as pension payments and union payments. The screen-grab below will give you an idea of your wage related expense responsibilities as an employer. This interactive payroll calculator can help you calculate anything regarding salaries and compensations of employees.
You can get more detailed information regarding taxes and fees on the skatturinn website including information on environmental and resource taxes, payroll, capital income tax and income tax.
If you plan to do your own bookkeeping and accounting, you should familiarise yourself with accounting and revenue recording and tax returns.