Staðgreint

Staðgreint is an Icelandic term referring to a system of taxation where income tax is withheld at source from an individual's earnings. This means that employers are responsible for calculating and deducting the appropriate amount of tax from an employee's salary or wages before paying the net amount to the employee. The withheld tax is then remitted directly to the Icelandic tax authorities, Skatturinn.

This system simplifies tax collection for the government and ensures a more consistent flow of revenue. For employees, staðgreint means that a portion of their income is paid directly towards their tax obligations throughout the year, rather than having to make a large lump sum payment at the end of the tax period. The tax rate applied is determined by the individual's income level and any applicable deductions or credits they are entitled to.

The employer's role in staðgreint is crucial, as they must accurately apply the correct tax rates and report the withheld amounts to Skatturinn. There are specific rules and deadlines that employers must follow to ensure compliance. Employees are typically provided with a statement detailing the amount of tax withheld from their earnings. While staðgreint covers the majority of income tax, individuals may still need to file an annual tax return to declare all their income and claim any further deductions or allowances.