Per Diem Allowances & Car Allowances

Tax assessment on daily allowances and car allowances

Travels abroad

Travel cost abroad are paid according to daily allowances which amount is decided by the Travel Expense Committee.


Cost of travel nationally shall be paid according to issued invoices or according to daily allowances if agreed up or if invoices aren't available.

Driving fees 

Travel Expense Committee determines amounts paid and arrangement of driving fees.


Information about amounts driving fees and daily allowances due to travel expenses are regularly updated and issued on homepage of the Ministry of Finance. Information about SDR exchange rate can be found on homepage of Central Bank of Iceland.

Additional detail - All text is in Icelandic and has not been translated by FÍN.

Tax assessment on daily allowances and car allowances

Permitted tax deduction due to daily allowances and car allowances/fees doesn't have to be the same amount as the Travel Expense Committee determines as payable to public servants due to travel expenses. Car allowance which is paid as fixed monthly payment or yearly amount shall be subjected to withholding tax but if paid by formal driving volume it isn't. Here is a link to the Directorate of Internal Revenue.