Iceland’s new gender pay gap reporting requirements take effect 1 September 2026. Law No. 53/2026, which was published 18 June 2026, significantly amends Iceland’s existing equal pay framework under the Act on Equal Status and Equal Rights Irrespective of Gender, No. 150/2020.
The new law abolishes the mandatory equal pay certification regime and replaces it with a simpler, less frequent reporting obligation.
What Are Iceland’s New Reporting Requirements?
Iceland employers with 50 or more employees on an annual average basis will be required to submit three components to the Directorate of Equality.
- Job classification based on objective criteria (responsibility, workload, qualifications, working conditions, and, if applicable, other factors that are relevant to the job or position in question)
- A gender-disaggregated pay analysis built on that classification
- A time-bound remedial plan where the pay analysis reveals an unjustified gender-based pay difference
The three-year compliance cycle will carry over but annual maintenance audits by certification bodies are eliminated. The reporting obligation is now a triennial data submission with no ongoing audit activity in between.
Covered employers without a valid Equal Pay Certificate or confirmation must report by 1 March 2027. Those holding a valid Equal Pay Certificate or confirmation report three years after their most recent certification. The Minister of Social Affairs and Labour is authorized to issue implementing regulations for the new reporting requirements ahead of the first reporting deadline in March 2027.
Prior Obligations
Under the current system, employers with 25 or more employees on an annual average applied for an Equal Pay Certification, accredited by Standard IST 85:2012. If an employer was in compliance, an Equal Pay Certificate was issued by the auditor who also notifies the Directorate of Equality. If the employer failed to receive a Certification, the Directorate of Equality could request that the company or institution make appropriate amendments within a reasonable time limit.
To receive Equal Pay Confirmation, employers had to demonstrate their equal pay system was non-discriminatory. Required submission documents included an equal pay policy, gender equality plan, and a pay equity analysis based on job classifications.
Specific jobs were required to be evaluated based on responsibilities, workload, competence and working conditions to ensure the same or equally valuable jobs were classified together. Job classifications were to be based on predetermined objective criteria. If pay inequities were identified, employers were required to include a plan for improvement.
An Equal Pay Confirmation was granted when the Directorate of Equality confirmed that all documentation met the Act’s requirements.
What Obligations Remain Under the New Regime?
An equality plan under Article 5 of the 2020 Act remains a precondition for completing the reporting. Employers must present the anonymized pay analysis results to their employees and make them accessible while ensuring the confidentiality of personal pay data. There is, however, no public pay gap disclosure reporting requirement.
The Directorate of Equality will publish a register of compliant employers on its website (name, national ID number, address, and validity period of the reporting) and will also maintain a register of covered employers that have failed to report.
While employers with 25-49 employees are not subject to the reporting requirements, they remain subject to Article 5 equality plan requirements (which still attaches at 25+ employees) and the substantive equal pay duty, which applies to all employers regardless of size.
Non-compliance (failure to report or to provide requested information) is enforceable through directions to remedy and daily fines of up to ISK 50,000 per day until compliance is achieved.
What Does This Mean for Iceland Employers?
The new amendments simplify Iceland’s gender pay gap compliance process for employers by moving to a standardized triennial reporting model.
The required reporting components (objective job classification using factors that closely track EU Pay Transparency Directive (the Directive) Article 4 criteria, a gender-disaggregated pay analysis covering all pay components, and remediation planning) bring Iceland in closer alignment with the EU Pay Transparency Directive and with pay data reporting requirements in other countries.
As an EEA (non-EU) state, Iceland is not currently legally mandated to transpose the Directive. Iceland’s formal obligation to transpose the Directive into national law takes effect once the Directive is officially incorporated into the EEA Agreement by an EEA Joint Committee Decision. Iceland’s framework, even as amended, lacks the Directive’s public reporting and joint pay assessment obligations.
How Trusaic Can Help
At Trusaic, we provide employers with solutions to comply confidently with Iceland’s new gender pay gap reporting requirements and global pay transparency reporting obligations.
Our Pay Equity Software Suite enables compliant pay systems, ensures objective job evaluations, and automates complex reporting obligations to keep your organisation one step ahead of enforcement.
- PayParity® analyzes your rewards data using legally defensible, regression-based analysis to quickly identify any potential unjustified pay inequities. It supports Iceland’s core requirements of objective job classification based on responsibility, strain, competence, and working conditions, and a gender-disaggregated pay analysis built on those Wage Influencing Factors.
- R.O.S.A.™ works as PayParity’s remediation engine to find the most cost-effective way to close nominal pay gaps; directly informing the time-bound remedial plan Iceland require where a gap is identified.
- Regulatory and Pay Transparency Reporting™ captures your pay equity analysis findings and generates compliant reports, streamlining your triennial submission to the Directorate of Equality and keeping you aligned across other global reporting regimes in one central control panel.
Whether you operate solely in Iceland, or across multiple jurisdictions, Trusaic’s end-to-end solutions help you meet evolving pay transparency requirements and build a sustainable, defensible pay equity framework.
