Iceland offers exceptional workforce advantages, with an employment rate of 83.7% in 2023—13.3 percentage points above the EU27 average. The country's services sector drives 64.6% of GDP while employing 78% of the workforce, creating robust opportunities in technology, finance, and tourism. Companies expanding here gain access to a highly educated, English-proficient talent pool with one of the world's highest labor force participation rates at 86.53%.
An Employer of Record (EOR) service acts as the legal employer for your Iceland-based team, managing the country's distinctive compliance requirements. Iceland's labor framework mandates minimum 24 working days of paid annual leave (10.17% of total wages), employer pension contributions of at least 8% of salary, and adherence to collective bargaining agreements covering over 90% of the workforce. With no statutory minimum wage, compensation is determined through industry-specific collective agreements, requiring specialized local expertise. EOR providers handle payroll processing, mandatory pension fund enrollment, union welfare dues, tax filings, and employment contract compliance, eliminating the need to establish a local entity. This article compares eight employer of record services iceland solutions to help you identify the right compliance partner.
Why Use an Employer of Record in Iceland?
Iceland's economy presents compelling growth opportunities, with the IMF projecting 1.7% GDP growth for 2024 and 2.2% for 2025. As a member of the European Economic Area (EEA), Iceland provides strategic access to EU markets without full membership requirements. The talent landscape reveals acute demand for high-skilled professionals, with 74% of jobs facing skills shortages concentrated in high-skilled occupations, particularly in ICT, healthcare, and construction. Companies benefit from average gross monthly earnings of EUR 6,184—81% above the EU27 average—reflecting a competitive labor market for specialized roles. An EOR enables immediate market entry to capitalize on these opportunities while navigating Iceland's unique collective bargaining system and pension fund requirements.
Our Picks for the 8 Best EOR Companies in Iceland
Borderless AI
Borderless AI is an AI-native Employer of Record platform that simplifies global workforce management through advanced automation and direct entity ownership. The platform combines cutting-edge AI technology with comprehensive compliance expertise to enable companies to hire, pay, and manage employees in Iceland and 170+ countries worldwide. With industry-leading onboarding speeds and payroll processing times, Borderless AI delivers a modern solution for organizations seeking efficient international expansion.
Why Use Borderless AI for EOR in Iceland
Borderless AI's direct entity ownership in Iceland ensures rapid onboarding within 1-2 days while maintaining full compliance with local labor laws, mandatory pension contributions, and tax regulations. The platform's AI-powered contract generation and HRGPT assistant provide instant answers to Iceland-specific employment questions, eliminating delays and reducing administrative burden for companies expanding into this Nordic market.
Key Benefits and Features
- 100% direct entity ownership eliminating third-party dependencies and ensuring faster processing
- 5-day global payroll processing with real-time payment tracking across 90+ currencies
- AI-powered contract generation producing compliant employment agreements in under one minute
- Real-time compliance monitoring with automatic updates as Icelandic labor laws change
- Mobile app providing employees with instant access to paystubs, benefits, and expense management
Price: $579/employee/month
Country Coverage: 170+ countries
G2 Rating: 4.9/5
Free Trial: Demo
Legal & Compliance: Borderless AI ensures full adherence to Icelandic labor laws, including tax filings, mandatory pension contributions, and employment contracts. The platform provides real-time compliance monitoring with automatic updates as regulations change, supported by partnerships with Big Four accounting firms for tax and legal expertise.
Onboarding Speed: 1-2 days
Platform Experience: Borderless AI offers a user-friendly interface with a centralized HR dashboard, mobile app for payment tracking, and multilingual support. The platform features embedded HRGPT AI assistance throughout workflows, providing instant answers to complex HR and compliance questions while maintaining an intuitive, easy-to-navigate design.
Customer Support: 24/7 in-house support from Canada, staffed with experienced payments and compliance professionals who function as an extension of your team. Support is provided via live chat, email, and phone with response times under 30 minutes.
Pros & Cons
Pros | Cons |
|---|---|
Industry-fastest global payroll processing (5 days) | Newer company in the industry |
Fastest international onboarding (1-2 days) | Fewer integrations than some legacy providers |
Real-time compliance monitoring | |
Direct entity ownership |
Horizons
Horizons is a global EOR provider offering comprehensive employment solutions across 180+ countries. The platform combines AI-powered automation with localized expertise to help businesses navigate international hiring complexities. Horizons provides end-to-end support for companies looking to build distributed teams while maintaining compliance with local regulations.
Why Use Horizons for EOR in Iceland
Horizons delivers cost-effective EOR services in Iceland with competitive pricing at $299 per employee per month while ensuring full adherence to Icelandic labor laws. Their rapid 1-2 day onboarding process and 24/7 support via dedicated app and Slack channel make them an accessible option for companies seeking to establish a presence in Iceland's skilled workforce market.
Key Benefits and Features
- AI-powered contract generation for compliant Icelandic employment agreements
- Automated global payroll processing with multi-currency support
- Real-time compliance monitoring for Icelandic tax and labor regulations
- Localized benefits administration including mandatory pension contributions
- Digital onboarding platform with multilingual support
Price: $299/employee/month
Country Coverage: 180+ countries
G2 Rating: 4.6/5
Free Trial: No
Legal & Compliance: Horizons ensures full adherence to Icelandic labor laws, including tax filings, mandatory pension contributions, and employment contracts. Their compliance team stays updated on local regulatory changes to maintain continuous legal alignment.
Onboarding Speed: Onboarding completed in as little as 1-2 days
Platform Experience: Horizons provides a user-friendly interface with a centralized HR dashboard, mobile app for payment tracking, and multilingual support. The platform enables seamless management of employee documentation, payroll, and benefits administration.
Customer Support: 24/7 in-house support via dedicated app and Slack channel, providing immediate assistance for urgent HR and compliance questions.
Pros & Cons
Skuad
Skuad is a global employment platform specializing in payroll, compliance, and workforce management across 160+ countries. The company offers a comprehensive suite of EOR services including visa support, device provisioning, and expense management. Skuad's platform is designed to simplify international hiring for companies of all sizes.
Why Use Skuad for EOR in Iceland
Skuad offers the most budget-friendly EOR option for Iceland at $199 per employee per month while maintaining comprehensive compliance expertise. Their 2-3 day onboarding timeline and multi-currency payroll capabilities make them particularly suitable for startups and small businesses entering Iceland's market with cost efficiency as a priority.
Key Benefits and Features
- Global payroll and compliance management with Icelandic labor law expertise
- Employee benefits administration tailored to Iceland's mandatory requirements
- Work visa and immigration support for foreign talent relocating to Iceland
- Background checks and onboarding automation
- Multi-currency payroll processing with real-time tracking
Price: $199/employee/month
Country Coverage: 160+ countries
G2 Rating: 4.6/5
Free Trial: Demo
Legal & Compliance: Skuad demonstrates comprehensive understanding of Icelandic labor laws, including tax filings, mandatory pension contributions, and employment contracts. Their compliance team monitors regulatory changes to ensure continuous adherence.
Onboarding Speed: 2-3 days
Platform Experience: Skuad provides an intuitive platform with real-time payroll tracking and compliance dashboards. The interface offers centralized management of employee data, contracts, and benefits with straightforward navigation.
Customer Support: 24/7 support via chat, email, and phone, ensuring companies can access assistance across time zones for urgent matters.
Pros & Cons
G-P (Globalization Partners)
G-P (Globalization Partners) is an established EOR provider with extensive global coverage across 185+ countries. The company leverages AI-powered HR compliance solutions and automated payroll processing to support enterprise-level international expansion. G-P's platform is built for organizations requiring comprehensive global mobility and compliance management.
Why Use G-P (Globalization Partners) for EOR in Iceland
G-P brings extensive knowledge of Icelandic labor laws and robust global infrastructure to support enterprise companies with complex international hiring needs. Their AI-powered compliance solutions and global mobility services are particularly valuable for organizations managing large-scale operations in Iceland while coordinating with teams across multiple countries.
Key Benefits and Features
- AI-powered HR compliance solutions with automated regulatory monitoring
- Automated payroll processing across 185+ countries
- Employee benefits administration compliant with Icelandic standards
- Work visa and immigration support for Iceland
- Global mobility solutions for international assignments
Price: $699/employee/month
Country Coverage: 185+ countries
G2 Rating: 4.5/5
Free Trial: Demo
Legal & Compliance: G-P possesses extensive knowledge of Icelandic labor laws, including tax filings, mandatory pension contributions, and employment contracts. Their compliance infrastructure is designed for enterprise-scale operations with multiple jurisdictions.
Onboarding Speed: 5-7 days
Platform Experience: G-P offers a user-friendly platform with real-time payroll tracking and compliance dashboards. The system provides comprehensive reporting and analytics capabilities suited for enterprise requirements.
Customer Support: 24/7 customer support via chat and email, with dedicated account management for enterprise clients.
Pros & Cons
Velocity Global (Pebl)
Velocity Global, operating under the Pebl brand, provides comprehensive EOR services across 185+ countries with a focus on global payroll and compliance management. The platform emphasizes fast response times and intuitive technology to support companies managing distributed workforces. Velocity Global combines global reach with localized expertise.
Why Use Velocity Global (Pebl) for EOR in Iceland
Velocity Global delivers rapid 2-day onboarding for Icelandic employees while maintaining comprehensive understanding of local labor laws and mandatory pension requirements. Their fast-response 24/7 support and intuitive compliance dashboards provide mid-sized companies with enterprise-level service quality when establishing operations in Iceland's competitive talent market.
Key Benefits and Features
- Global payroll and compliance management with Icelandic expertise
- Employee benefits administration meeting local standards
- Work visa and immigration support for Iceland
- Employee expense management integrated into platform
- Global mobility solutions for international transfers
Price: Custom (est. $500+/employee)
Country Coverage: 185+ countries
G2 Rating: 4.6/5
Free Trial: Demo
Legal & Compliance: Velocity Global maintains comprehensive understanding of Icelandic labor laws, including tax filings, mandatory pension contributions, and employment contracts. Their compliance team ensures adherence to evolving regulations.
Onboarding Speed: 2 days
Platform Experience: Velocity Global provides an intuitive platform with real-time payroll tracking and compliance dashboards. The interface prioritizes ease of use while delivering comprehensive workforce management capabilities.
Customer Support: 24/7 customer support with fast response times, ensuring urgent issues are addressed promptly regardless of time zone.
Pros & Cons
Swapp Agency
Swapp Agency is an EOR provider emphasizing local expertise and tailored compliance solutions across 100+ countries. The company focuses on delivering personalized HR support with deep understanding of regional labor laws. Swapp Agency positions itself as a specialist in navigating complex local regulations.
Why Use Swapp Agency for EOR in Iceland
Swapp Agency offers specialized local expertise in Icelandic labor laws with tailored solutions focused on compliance in Nordic markets. Their dedicated HR support model provides personalized guidance through Iceland's unique employment regulations, making them suitable for companies prioritizing hands-on consultation and region-specific knowledge over technology automation.
Key Benefits and Features
- Local expertise in Icelandic labor laws and regulations
- Employee benefits administration customized to Iceland
- Work visa and immigration support
- Employee expense management
- Tailored compliance solutions with regional focus
Price: €600/employee/month
Country Coverage: 100+ countries
G2 Rating: Not listed
Free Trial: Demo
Legal & Compliance: Swapp Agency demonstrates deep understanding of Icelandic labor laws, including tax filings, mandatory pension contributions, and employment contracts. Their regional focus enables specialized compliance expertise.
Onboarding Speed: 5-7 days
Platform Experience: Swapp Agency provides tailored solutions with a focus on local compliance. The platform emphasizes customization and personalized service over standardized automation.
Customer Support: Dedicated HR support tailored to unique needs, with emphasis on personalized consultation and guidance through regional compliance requirements.
Pros & Cons
Acvian
Acvian offers comprehensive EOR and PEO services across 180+ countries with an emphasis on customized HR solutions. The platform provides all-in-one workforce management tools tailored to unique business requirements. Acvian combines broad global coverage with personalized service delivery.
Why Use Acvian for EOR in Iceland
Acvian delivers expertise in Icelandic labor laws with comprehensive EOR and PEO services backed by a strong 4.8/5 G2 rating. Their all-in-one platform streamlines workforce management while providing dedicated HR support, making them ideal for companies seeking customizable solutions and high-touch service when navigating Iceland's employment landscape.
Key Benefits and Features
- Comprehensive EOR and PEO services for Iceland
- HR services tailored to unique business needs
- Payroll management and multi-currency payments
- Immigration support for international hires in Iceland
- Employee expense management integration
Price: Custom pricing
Country Coverage: 180+ countries
G2 Rating: 4.8/5
Free Trial: No
Legal & Compliance: Acvian possesses expertise in Icelandic labor laws, including tax filings, mandatory pension contributions, and employment contracts. Their compliance approach combines regulatory knowledge with tailored implementation.
Onboarding Speed: 1-2 weeks
Platform Experience: Acvian provides an all-in-one tool to streamline workforce management with customizable features that adapt to specific business requirements and operational workflows.
Customer Support: Dedicated HR support tailored to unique needs, with emphasis on personalized guidance and consultation throughout the employment lifecycle.
Pros & Cons
Express Global Employment
Express Global Employment delivers global EOR services across 190+ countries with an emphasis on combining worldwide reach with localized expertise. The platform provides comprehensive benefits administration, visa support, and compliance management. Express Global Employment focuses on delivering global support backed by local knowledge.
Why Use Express Global Employment for EOR in Iceland
Express Global Employment offers expert knowledge of Icelandic labor laws with the industry's broadest country coverage at 190+ countries. Their 1-3 day onboarding speed and user-friendly platform with real-time tracking make them suitable for multinational corporations requiring consistent service quality across Iceland and numerous other markets simultaneously.
Key Benefits and Features
- Global EOR services with Icelandic compliance expertise
- Employee benefits administration meeting local requirements
- Work visa and immigration support for Iceland
- Employee expense management
- Real-time payroll tracking and compliance dashboards
Price: Custom pricing
Country Coverage: 190+ countries
G2 Rating: 4.6/5
Free Trial: No
Legal & Compliance: Express Global Employment demonstrates expert knowledge of Icelandic labor laws, including tax filings, mandatory pension contributions, and employment contracts. Their global compliance infrastructure supports consistent service across all markets.
Onboarding Speed: 1-3 days
Platform Experience: Express Global Employment provides a user-friendly platform with real-time payroll tracking and compliance dashboards, enabling efficient management of international workforce operations.
Customer Support: Global support with local expertise, combining worldwide availability with region-specific knowledge to address Iceland-related questions effectively.
Pros & Cons
Selection Criteria and Methodology
Our evaluation of the best EOR companies for Iceland employed a rigorous, data-driven methodology examining eight critical factors that directly impact service quality, compliance assurance, and operational efficiency. This transparent approach ensures organizations can make informed decisions based on objective criteria rather than marketing claims.
- Price: We analyzed monthly per-employee costs ranging from $199 to $699, plus custom pricing models. Evaluation considered not only base rates but also deposit requirements, hidden fees, and overall value proposition. Borderless AI and Horizons notably require no salary deposits, providing significant cash flow advantages.
- Country Coverage: Global reach varied from 100+ to 190+ countries. We assessed whether providers maintain direct entity ownership versus third-party partnerships, as direct ownership typically ensures faster processing and better compliance control. Express Global Employment leads with 190+ countries, while Borderless AI's 170+ countries includes full direct ownership.
- Key Features: We evaluated the comprehensiveness and sophistication of platform capabilities, particularly AI-powered automation, compliance monitoring, contract generation, and specialized services like visa support and expense management. Borderless AI's embedded HRGPT assistant and 5-day payroll processing represent significant technological advantages.
- G2 Rating: User reviews provide critical insights into real-world performance. Ratings ranged from 4.5/5 to 4.9/5, with Borderless AI achieving the highest score. We considered review volume, recency, and specific feedback themes around support quality and platform usability.
- Legal & Compliance: All providers demonstrated knowledge of Icelandic labor laws, tax filings, and mandatory pension contributions. We prioritized platforms offering real-time compliance monitoring and automated regulatory updates over manual processes, as Iceland's labor regulations require continuous attention.
- Onboarding Speed: Implementation timelines ranged from 1-2 days to 1-2 weeks. Faster onboarding directly impacts time-to-productivity and competitive hiring in Iceland's tight labor market. Borderless AI, Horizons, and Velocity Global demonstrated fastest speeds at 1-2 days.
- Platform Experience: We assessed interface intuitiveness, mobile accessibility, self-service capabilities, and reporting functionality. Modern platforms with centralized dashboards, real-time tracking, and mobile apps scored highest, as they reduce administrative burden and improve employee satisfaction.
- Customer Support: Support quality evaluation examined availability (24/7 versus business hours), response times, channel options (chat, email, phone), and whether providers use in-house teams versus outsourced support. In-house support from North America or Europe typically delivers faster, more knowledgeable assistance for Iceland-related questions.
Expert Tips for Hiring in Iceland
- Prioritize pension compliance from day one: Iceland's mandatory pension system requires contributions to both general pension funds and supplemental occupational funds. Ensure your EOR provider automatically calculates and remits these contributions to avoid penalties and maintain employee trust.
- Understand union agreements and collective bargaining: Over 90% of Icelandic workers are union members, and collective bargaining agreements often supersede standard employment contracts. Partner with an EOR that maintains current knowledge of sector-specific union agreements affecting wages, working hours, and benefits.
- Plan for vacation and leave entitlements: Icelandic law mandates minimum vacation periods and generous parental leave provisions. Verify that employment contracts reflect these requirements and that your EOR's platform accurately tracks and manages leave balances to ensure compliance.
- Consider language and cultural factors: While many Icelanders speak excellent English, providing employment documentation in Icelandic demonstrates commitment and reduces misunderstandings. Select an EOR offering multilingual contract generation and support to facilitate smooth communication.
- Evaluate payroll processing speed for competitive advantage: Iceland's small, highly skilled talent market moves quickly. EOR providers offering 5-day payroll processing and 1-2 day onboarding enable faster hiring decisions, improving your ability to secure top candidates before competitors.
How to Choose the Best EOR Company
Selecting the optimal EOR provider for your Iceland operations requires systematic evaluation aligned with your specific business requirements and growth objectives. Follow this structured approach:
- Define your Iceland hiring requirements: Determine the number of employees you plan to hire, their roles, required onboarding timeline, and budget constraints. This clarifies whether you need cost optimization (Skuad at $199/month), speed priority (Borderless AI at 1-2 days), or enterprise features.
- Compare pricing models comprehensively: Review the comparison table above to identify providers within your budget. Factor in not just monthly rates but also setup fees, deposit requirements, and additional charges. Providers like Borderless AI offering zero deposits provide significant cash flow benefits.
- Assess compliance expertise specific to Iceland: Verify the provider's knowledge of Icelandic labor laws, pension requirements, and union agreements. Request examples of Iceland-specific contracts and ask about their compliance monitoring processes. Real-time compliance updates represent a significant advantage.
- Evaluate technology and platform capabilities: Test platform interfaces through demos, examining ease of use, mobile accessibility, reporting features, and automation capabilities. AI-powered features like automated contract generation and compliance monitoring reduce administrative burden substantially.
- Review onboarding speed requirements: If you need to hire urgently, prioritize providers offering 1-3 day onboarding. If you prefer more consultative implementation, longer timelines may be acceptable. Match onboarding speed to your competitive hiring requirements.
- Investigate customer support quality: Examine support availability (24/7 versus business hours), response time guarantees, available channels, and whether teams are in-house or outsourced. Review G2 feedback specifically about support experiences.
- Verify entity ownership structure: Direct entity ownership typically delivers faster processing and better compliance control than third-party partnerships. Ask providers explicitly whether they own Icelandic entities or work through intermediaries.
- Request references and case studies: Ask for examples of companies similar to yours that have successfully hired in Iceland through the provider. Speak with current clients about their experiences with Iceland-specific challenges.
- Test with a pilot hire if possible: Consider starting with one employee to evaluate platform usability, support responsiveness, and compliance accuracy before committing to larger-scale hiring.
Why Choose Borderless AI in Iceland as an EOR Provider
Borderless AI distinguishes itself in Iceland's EOR market through a unique combination of AI-native technology, direct entity ownership, and industry-leading operational speed. The platform's 4.9/5 G2 rating reflects exceptional user satisfaction with both technology capabilities and service quality, positioning it as the highest-rated option among evaluated providers.
- Industry-fastest onboarding and payroll: Borderless AI delivers 1-2 day onboarding for Icelandic employees and processes payroll in just 5 days, compared to industry standards of 1-2 weeks. This speed advantage enables companies to secure competitive talent faster and maintain superior employee satisfaction through prompt payment delivery.
- 100% direct entity ownership: Unlike providers relying on third-party partnerships, Borderless AI owns its Icelandic legal entity completely. This direct ownership eliminates intermediaries, ensuring faster processing, immediate compliance control, and reduced operational risk when navigating Iceland's labor regulations.
- AI-powered automation reducing administrative burden: The embedded HRGPT AI assistant provides instant answers to Iceland-specific employment questions, generates compliant contracts in under one minute, and monitors regulatory changes in real-time. This automation delivers time savings that offset premium pricing through reduced HR workload.
- Zero salary deposit requirement: Borderless AI never requires upfront salary deposits, providing immediate cash flow advantages particularly valuable for growing companies. This policy can preserve $100,000+ in working capital for larger teams compared to providers requiring pre-funding.
- North America-based support excellence: 24/7 in-house support from Canada delivers response times under 30 minutes, staffed by experienced payments and compliance professionals. This specialized expertise ensures Iceland-specific questions receive knowledgeable answers without outsourcing delays.
- Comprehensive compliance assurance: Real-time compliance monitoring automatically tracks Icelandic labor law changes, pension contribution requirements, and tax regulation updates. The platform ensures continuous adherence through AI-powered alerts and automated contract adjustments.
- Mobile-first employee experience: Employees access paystubs, benefits information, and expense management through an intuitive mobile app with multilingual support. This self-service capability reduces HR inquiries while improving employee engagement and satisfaction.
Final Thoughts
Selecting the right EOR provider for Iceland represents a strategic decision that impacts compliance integrity, operational efficiency, and competitive hiring capabilities. The comparison of eight leading providers reveals significant variations in pricing, technology sophistication, onboarding speed, and support quality that directly affect your international expansion success.
Data-driven evaluation across factors including G2 ratings, country coverage, compliance expertise, and platform capabilities enables informed decisions aligned with your specific requirements. Whether prioritizing cost optimization, implementation speed, AI automation, or hands-on support, the Iceland EOR market offers diverse options serving distinct business needs.
The most successful companies approach EOR selection systematically, matching provider strengths to hiring objectives while ensuring compliance expertise specific to Iceland's labor laws, pension requirements, and union agreements. As global workforce management continues evolving, partnering with providers offering modern technology and responsive support positions your organization for sustainable international growth.
Ready to streamline your Iceland hiring process? Book a demo to see how the right EOR partner can accelerate your growth.
