launagreiðenda

Launagreiðandi refers to the person or organization that pays wages to employees. In practice it is the employer—the company, institution, or other entity that hires someone. The launagreiðandi may also be an individual who remunerates staff under an employment contract, though the term is most often used for formal employers.

Key responsibilities include calculating gross pay, withholding income tax and social contributions, and transferring net wages to the employee. They must issue a wage slip (launaseðill) that itemizes earnings, deductions, and net pay, and keep payroll records for required periods. The launagreiðandi also reports and remits taxes and social insurance contributions to the relevant authorities and ensures compliance with labor laws, collective agreements, and sector-specific rules on hours, overtime, minimum wage, and holiday pay. They are responsible for timely payment and accurate record-keeping, and may be liable for penalties if obligations are not met.

In the case of outsourcing, the entity designated as launagreiðandi remains legally responsible for tax and social contributions, even if a payroll provider performs the processing.

Understanding the role is important for employees and for legal and administrative compliance; the term distinguishes the party responsible for wage payments in the employment relationship.