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Accrual of rights

You pay 4% of the wages and the employer pays 11.5%. Thus, retirement rights and important rights are created for you and your family if you experience trauma later in life.

Further information on accrual
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Retirement payments

You can start taking a pension from the age of 60, and the amount is based on the premiums paid to the fund throughout your working life and the age of the fund member when retirement begins.

Further information on payments
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Division between spouses

There are two main options available to cohabiting partners who want to share their pension rights or payments. In some cases, it is necessary to apply for a division before the age of 65.  

Further information on division between spouses

Taxation of retirement benefits and pensions

Traditional income tax must be paid on retirement benefits or pension payments and the tax is deducted from monthly payments. If you receive a salary or pension from other bodies than LSR, you need to assess which payer should use the personal tax credit and in which tax bracket the fund's payments should be taxed.

You are responsible for notifying the fund in which tax bracket retirement benefits or pension payments should be taxed, and whether the personal tax credit should be used. In this way, you prevent tax payments from being either over- or under-calculated, which can lead to inconvenience later.
 
If the spouse does not fully use their personal tax credit, retirement benefits recipients and pensioners can use up to 100% of the spouse's unused personal tax credit.

There are three monthly tax brackets plus the tax-free limit:

  1. Income under ISK 446,136 (31.48%)
  2. Income from ISK 446,137 to 1,252,501 (37.98%)
  3. Income over ISK 1,252,501 (46.28%)
  4. Tax-free limit: ISK 206,245 based on 100% utilisation of personal tax credit
Further information on tax brackets
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