Maternity leave
Parents have an independent entitlement to maternity leave of up to six months each, either due to childbirth, early adoption, or taking a child into permanent foster care.
A parent has the option to transfer six weeks of their independent entitlement to the other parent, as specified in Article 8 of the Maternity and Parental Leave Act. Consequently, the total entitlement for parents amounts to 12 months.
Monthly disbursements from the Maternity Leave Fund to a parent on full maternity leave equal 80% of the average total salary, up to a maximum of ISK 600,000 (including the year 2023). The calculation of the average salary is based on a continuous twelve-month period that concludes six calendar months prior to the month of a child's birth, or the month in which a child joins the family through initial adoption or permanent foster care.
Self-employed individuals are also eligible for payments from the Maternity Leave Fund.
For more detailed information, please contact the Directorate of Labour.
Legal protections
Employers are prohibited from terminating the employment of an employee solely on the grounds that they have announced their intention to take maternity or parental leave, or while they are on such leave, unless the reasons for termination are valid and unrelated to the leave. The same protection applies to pregnant individuals and people who have recently given birth, shielding them from unjustifiable termination.
Maternity leave is considered as working time when evaluating work-related entitlements, including the right to take annual leave, calculating sick leave, and determining eligibility for unemployment benefits.
BHM social funds
Maternity grants from the BHM social funds are available under certain conditions, in addition to the payments from the Maternity Leave Fund.
