Iceland is one of the Scandinavian countries that will have you immediately impressed with its high salaries, great life expectancy, amazing level of society development, civic spirit, environmental conditions, life satisfaction, and with being one of the least populated countries in Europe.
But does it cost a lot to live in Iceland this year? We’re going to dive straight into these numbers in today’s article.
Because, no matter how high quality living there is, at the end of the month, you have to pay the rent and utilities after you’ve paid for your food, transportation and other daily expenses. Will you have sufficient money left from your salary to cover all these costs?
Let’s find out by checking out the most recent prices for real estate, rent, food, utilities and other costs that make up the monthly cost of living in Iceland.
Since Iceland is so small with just one city – Reykjavik – having over 100,000 inhabitants, you can imagine that prices will be generally the same throughout the country.
So the numbers below should be valid for Iceland in its entirety, no matter where you choose to set up base.
What is the average monthly cost of living in Iceland?
The average monthly costs you should expect to pay for a decent life in Iceland for one person is around €2.500, or 360.000 ISK. This will cover rental costs, food and other daily expenses that a regular person has throughout a month.
Have in mind that these are just estimated values that can vary a lot depending on your own lifestyle.
Are you an outgoing person, who loves movie nights, eating out, going to every festival and not missing an event? Or are you shopaholic?
If so, your monthly cost of living in Iceland will definitely be higher than the average we are calculating here, because spending here and there, even in smaller amounts, does add up at the end of the month. And Iceland is definitely not one of those cheap places in Europe!
On the other hand, of course, if you’re an introvert who prefers staying at home, cooking your own meals or, even better, if you’re very thrifty, putting aside some money with every occasion, managing your income carefully, then chances are high that your monthly cost of living here can be a lot lower.
In other words, you can end up spending 10% to 20% less than the value I listed above, but you could also end up spending a lot more if you like to splurge often.
With these in mind, let’s start breaking down the costs a little bit and see how much you should expect to pay in various categories while in Iceland.
Costs for accommodation and real-estate in Iceland in 2022
If you’re not like most people and you want to buy property in Iceland instead, expect to pay around €5,500 per square meter in central areas and some 10-15% less in areas that are farther away.
However, you will most likely want to rent. Rental prices vary slightly from city to city, with those located closer to the center being a bit more expensive.
On average, you should expect to pay something similar to the values listed below when renting an apartment in Iceland:
- €1,200 for a one-bedroom apartment
- €1,800 for a two-bedroom apartment
In central Reykjavik though, you can find prices that go well above the values listed here. The truth is that the demand for accommodation has increased continuously in Iceland over the years, but not a lot of new buildings have been built.
I personally expect the rental prices to explode in the next few years in Iceland. But, then again, it seems that they’re going up steadily throughout Europe as well. The cost of living in Finland is also going up, for example.
Costs for utilities in Iceland
A home without utilities cannot be associated with decent life standards – so perfectly concomitant with the accommodation costs come the costs for utilities.
These include the basic electricity, heating, cooling, garbage and water, but not the internet, phone and TV costs.
These are generally not included in the monthly rental costs, but some owners do include all or some of these in the monthly fees. So pay attention to this, as you can end up saving quite a bit of money if these costs are already included.
But here are the estimated amounts you will pay for utilities when renting (or owning a place) in Iceland:
- €100 for a one-bedroom apartment
- €150 for a two-bedroom apartment
Costs for food and restaurants in Iceland in 2022
Food costs are the most difficult to estimate, in my opinion, as there are lots of variables in play.
On average, a single person should expect to pay around €450 per month for food, which includes some eating out but mostly cooking at home (decent food).
If you prefer to eat out a lot, your monthly expenses will go up quite a bit as restaurants in Iceland are pretty expensive and they do add up.
For example, if you were to eat your lunch every day at a restaurant, you would pay a minimum of €350 just for that. With two other meals to account for and maybe some snacks in between, food prices can definitely skyrocket easily.
But again, this depends on your eating habits, on your diet, on your eating frequency, practically on how many ingredients or meals you are buying, and what prices you are paying for them. All these will eventually build the number that you can calculate at the end of the month.
Here are some reference prices for the most basic ingredients and the most popular foods you can choose to buy. Get an idea of what drinks, ingredients and whole meals cost in Iceland:
- €3.5 for a loaf of bread
- €1.3 for a 1l-bottle of milk
- €3.40 for a kg of vegetables
- €15.30 for a kg of chicken
- €4.50 for one coffee (Café Latte or Cappuccino)
- €12.5 for a sandwich
- €12.00 for a fast-food meal such as a BurgerKing or McDonald’s Combo
- €15 for one meal at a cheap restaurant
- €50 for one three-course meal at a higher-end restaurant
Costs for transportation in Iceland
Another important component of the monthly cost of living is the one for transportation. What means you choose to travel by, and how much it costs, will definitely add up to your monthly expenses in Iceland. Here’s your options and their specific prices:
- €3.4 for one ride on public transport
- €100 for one monthly public transport ticket
- €2.50 per km on taxi or other similar means of transport
- €1.55 for one liter of gasoline
Other costs in Iceland
Lastly, life is unforeseeable, and unexpected meetings, festivals or other costs can always show up without warning.
And these will have you taking money out of your pocket in no time, in order to get some fun, relax and forget about your daily worries and quotidian monotony.
And that’s perfectly normal, as life is more than work, rent, utilities and food. Spiritual, emotional and social nurture are also important.
So, let’s check the prices for some more pleasant ways to spend time in Iceland, such as going out to a movie or making a gym subscription. Here’s the prices you should expect, for this kind of extra- activities:
- €12.50 for one cinema ticket per adult
- €55.00 for monthly gym subscription
- €60.00 for monthly high-speed internet subscription
- €20 for monthly mobile plan with 5GB of data and free calls in the network (plus some 50-100 minutes of free international calls).
To paraphrase superhero movies, with high income come higher expenses. And with Iceland is known as one of the best-paying countries in the entire Europe the cost of living is also amongst the most expensive.
Salaries are no longer growing like they did before 2020, and the inflation that hit the world didn’t avoid Iceland either, unfortunately.
The salaries here started to slowly and steadily increase again, and as a result, Iceland remains one of the best-paying countries in Europe. But let’s discuss all these salaries and costs of living just a little bit more thoroughly before we draw our conclusions from this article.
The cost of living hasn’t changed much during the previous years – and as a result, it’s quite difficult to cover the average cost of living for a decent life – even more difficult for an extrovert, expensive lifestyle – with a minimum wage.
After some quick calculations, the average cost of living in Iceland is around €2,500 should you pay the rent for a one-bedroom apartment in the city center and paying for everything yourself.
The costs becomes a bit more affordable on a per-person basis if two people (or more) live together.
With a net minimum salary of 260,000 ISK, or roughly €1.830 per month in 2021, covering the basic expenses for rent, utilities and food can become a real challenge if you’re alone.
Therefore, if you consider relocating to Iceland, you should definitely make sure that your income will allow you to pay for basic needs to live a good life.
But, with the average net monthly salary, on the other hand, which is around 400.000 ISK, meaning roughly €2.800, it becomes possible not only to pay for all these basic needs, but also to enjoy other beautiful moments in life, and even save up more.
Wrapping it up, Iceland is a pretty expensive country, with high monthly expenses – but, just like anywhere else, lowering down your expenses to the minimum, covering all your costs for rent, utilities and other basic needs and saving money will most likely be possible with the average salary – or even lower – if properly managed.
Even though it’s not a cheap place to live in, Iceland is still a great-paying estate, with amazing career opportunities, a clean and safe environment and a great community, with high levels of education and civic spirit.
So as expensive as it might be, Iceland has its own benefits which I am sure you were attracted to, and which made the reason for your interest in relocating here.
Or if you just plan to visit, there are budget options available. I wrote about the best hostels in Iceland – make sure to check out that article as well!
So, do not get discouraged by the high costs of living if you feel like getting a salary close to the average figure in Iceland will not be a problem for you.
Plus, adapt this cost of living to your own personality and lifestyle to get an even better idea of what your financial situation will look like with a future in Iceland.
And, of course, if you hold more up-to-date information regarding prices and costs in Iceland, let me know what I can change within the article as well, with a comment below.