Am I entitled to higher pay on major holidays and red days?
Yes — work on major holidays and red days carries a premium, but it comes from the collective agreement, not directly from law. Iceland has no statutory minimum wage in general law; instead Act no. 55/1980 makes collective agreements the binding minimum for everyone in the relevant area. Under the general agreement (for example VR/SA), major-holiday work is paid at 1.375% of monthly salary per hour, on top of fixed wages. Major holidays include New Year's Day, Good Friday, Easter Sunday, Whit Sunday, 17 June, the commerce workers' holiday and Christmas Day, plus the time after 12:00 on Christmas Eve and New Year's Eve. The myth many believe: that all Sunday work is "double pay" by law. That is wrong — Sundays carry overtime or shift premiums under the agreement, not the major-holiday premium, which is reserved for the listed days. Overtime, meanwhile, is paid at 1.0385% of monthly salary per hour. The exact figures are in your collective agreement.
📋 The rules
- Iceland has no general statutory minimum wage; Act no. 55/1980 makes the collective agreement the binding minimum for everyone in the area.
- Major-holiday work is paid at 1.375% of monthly salary per hour on top of fixed wages (general VR/SA agreement).
- Major holidays include New Year's Day, Good Friday, Easter Sunday, Whit Sunday, 17 June, the commerce workers' holiday and Christmas Day.
- The time after 12:00 on Christmas Eve and New Year's Eve also counts as a major holiday under the agreement.
- Overtime is paid at 1.0385% of monthly salary per hour; work on ordinary public holidays carries evening or overtime pay on top of fixed wages.
🔓 Exceptions
- The figures depend on your collective agreement — 1.375% and 1.0385% are from the general VR/SA agreement, but others (state, municipal, trades) can have different percentages.
- Work on a Sunday that is not a major holiday carries overtime or shift premiums, not the major-holiday premium.
- If regular shift work falls on a major holiday, special payment rules or winter leave under the relevant agreement can apply instead of the premium directly.
⚠️ Penalties & fines
If major-holiday or overtime premiums are not paid, the employer owes unpaid wages, and the claim does not lapse at once — an employee can make a back-dated wage claim with the help of a trade union. Since the collective agreement is a statutory minimum under Act no. 55/1980, an agreement to worse terms is void, so an employee who 'agreed' to forgo the premium is still owed it. Trade unions calculate and collect such claims, and the matter can end up in court or before an appeals committee. The hidden cost for employees is not knowing the right: many work major holidays on day-work pay without knowing the 1.375% premium should be added, and limitation rules can eventually close off the oldest claims. If the company becomes insolvent, the Wage Guarantee Fund can secure part of the unpaid wages within limits. The safest course is to keep a record of hours worked and compare the payslip against the correct percentages in the agreement.
📎 Official sources
- VR · evening, night, overtime and major-holiday work →
- Althingi · Act no. 55/1980 on the working terms of employees →
- ASI · working time and public holidays →
❓ Frequently asked
Am I entitled to a premium if I work on Christmas Day or 17 June?
Yes, these days count as major holidays and work on them carries a special premium on top of fixed wages. Under the general VR and SA agreement, major-holiday work is paid at 1.375% of monthly salary per hour, but the exact percentage depends on your collective agreement.
Is Sunday work double pay by law?
No, no general law provides for double Sunday pay, and a Sunday that is not a major holiday carries overtime or shift premiums under the agreement. The major-holiday premium, 1.375%, is reserved for specific days such as Christmas Day and Easter Sunday, not ordinary Sundays.
Where do these figures come from if they are not in law?
They come from collective agreements between trade unions and employers, but Act no. 55/1980 makes those agreements the binding minimum for everyone in the area. The agreement therefore has the force of law in practice, and an employer may not agree with you on worse terms than it provides.
Which days count as major holidays?
Major holidays include New Year's Day, Good Friday, Easter Sunday, Whit Sunday, 17 June, the commerce workers' holiday and Christmas Day. The time after twelve o'clock on Christmas Eve and New Year's Eve also counts as a major holiday under the general agreement.
What can I do if the premium is not paid?
You can turn to your trade union, which calculates the unpaid wages and makes a back-dated wage claim on your behalf. Since the collective agreement is a statutory minimum, an agreement to worse terms is void, so you are owed the premium even if you did not receive it at first.
🔎 Common searches
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