All employees are entitled to annual leave, that is, time off from work for a specified number of days, in addition to holiday pay calculated on all wages. Rules on annual leave are set out in the Annual Leave Act and in collective agreements. The Act stipulates, among other things, the minimum annual leave entitlement, the scheduling of leave, and the payment of holiday pay, while collective agreements contain provisions on leave in excess of the statutory minimum, how summer and winter leave is allocated, sick leave during annual leave, and more.
The minimum annual leave in the general labour market is 24 working days. Holiday pay amounts to 10.17% of total wages.
After 5 years with the same employer or 10 years in the same occupation, employees are entitled to 25 days of annual leave and 10.64% holiday pay.
After 10 years with the same employer, employees are entitled to 30 days of annual leave and 13.04% holiday pay.
From 1 May 2024, the holiday accrual changes for employees who have reached the age of 22 and have been employed for 6 months with the same employer; such employees become entitled to 25 days of annual leave and holiday pay amounting to 10.64%. At the same time, the holiday entitlement of employees who have worked for 5 years with the same employer increases to 26 working days and 11.11% holiday pay. These changes apply to annual leave taken during the leave year beginning on 1 May 2025.
From 1 May 2025, holiday accrual increases for employees who have worked for 5 years with the same employer to 28 working days and 12.07% holiday pay. This change applies to annual leave taken during the leave year beginning on 1 May 2026.
For further details, see Chapter 4 of the collective agreement between SGS and the Confederation of Icelandic Enterprice(SA).