Tekjuskrám

Tekjuskrám is an Icelandic term that translates to "income bracket" or "income tax bracket." It refers to a range of income within which a specific tax rate applies. Iceland, like many countries, employs a progressive income tax system, meaning that higher earners pay a larger percentage of their income in taxes. Tekjuskrám dictates these percentages for different income levels.

The system is designed to ensure that those with greater ability to pay contribute more to public services and infrastructure. When an individual's income falls within a certain tekjuskrám, they are subject to the tax rate associated with that specific bracket. As income increases and crosses into a higher bracket, the marginal tax rate for that additional income also increases.

The specific income thresholds and corresponding tax rates for each tekjuskrám are determined by the Icelandic government and can be subject to change, often annually, through budgetary legislation. This allows for adjustments based on economic conditions and social policy priorities. Understanding one's tekjuskrám is crucial for individuals and businesses in Iceland for accurate tax planning and compliance. It directly impacts the net amount of income available after taxes.