Budgeting App for Expats in Iceland

Iceland uses its own currency, the Icelandic króna (ISK)¹. The Central Bank of Iceland targets 2.5% annual inflation². When you register your domicile in Iceland you're assigned a personal ID number (kennitala) in the national register³.

Borderless Budget connects to major Icelandic banks including Landsbankinn, Islandsbanki, and Arion Bank through secure bank connections, and your accounts in the US, Canada, the EU, the UK, Norway, Iceland and Liechtenstein connect too.

Major banks for expats

• Landsbankinn
• Islandsbanki
• Arion Bank

Cash vs. card culture

From July 2026, a physical Icelandic credit or debit card issued to an adult, inserted with its PIN, can pay up to 50,000 kr for necessities such as groceries, fuel or medicine even when internet connections are down. Older cards work offline only after one chip-and-PIN purchase activates them, cards issued from 1 July 2026 come activated, and it could take time for every service provider to support it⁴.

A single person in Reykjavík needs about $1,620 a month before rent, on average⁵. Add a one-bedroom and most of a typical month's spending goes on housing.

The króna is Iceland's own currency¹, and the Central Bank of Iceland sets its own 2.5% inflation target². When inflation runs above that target, local prices can rise while the exchange rate moves separately. Tracking both in one place shows what Iceland really costs you each month.

Transferring money to Iceland

• If you're paid in dollars or euros, move a month of króna at a time and compare your bank's rate with a transfer service before each one.
• Keep your landlord's rent in króna and settled first, so the exchange rate on one particular day never decides whether rent is covered.
• Hold your home-currency savings in their own currency and convert only what you need for the month ahead.
• Note the rate you actually received on each transfer, not the mid-market rate, so your budget reflects what the króna really cost you.

Borderless Budget tracks all of your accounts, your home-country bank, your Icelandic bank, and services like Wise or Revolut, in a single dashboard. Exchange rates update daily, so your budget always reflects where things actually stand.

• Staying in Iceland six months or longer in a twelve-month period makes you resident with unlimited tax liability from the day you arrived, and residents are taxed on worldwide income⁸.
• Income tax withheld from pay in 2026 is charged in three brackets of 31.49%, 37.99% and 46.29%, and a personal tax credit of 72,492 kr a month is deducted from the calculated tax⁸.
• Taxable income is salary minus the pension fund premium, and the mandatory pension contribution is 4% of employment income⁸.
• The tax year is the calendar year. Final assessment is made at the end of May the following year, and any difference from what was withheld is refunded or collected with 2.5% added⁹.
• The US taxes its citizens on worldwide income from all sources, wherever they live¹⁰. The United States and Iceland have an income tax treaty, with a treaty and protocol from 2007¹¹.

1. Budget your Icelandic life in króna. Converting rent, groceries and bus fares into your home currency one by one adds noise, not clarity.
2. Set aside money for the first months of healthcare. Public cover usually starts 3 months after your domicile is registered, and care before that is charged at full price⁷.
3. If you ride Strætó every day, compare twelve 30-day passes with the yearly pass before you buy⁶.
4. Leave room in your budget for the end-of-May tax assessment, since any shortfall in withholding is collected with 2.5% added⁹.
5. Keep your home-country bills, like subscriptions, loans and phone plans, in their own currency so you can see what Iceland actually costs you.

Connect your Icelandic and home-country banks

Link your Landsbankinn, Islandsbanki, Arion Bank, or other Icelandic bank alongside your home-country bank. Transactions from all accounts sync automatically into one dashboard.

Budget in ISK and your home currency

Your budget is set in your home currency, and Borderless Budget automatically converts every transaction, whether it's in Icelandic króna or your home currency. You can toggle any transaction to see the original currency amount. Exchange rates update daily, so your budget always reflects reality.

Automatic categorization

Transactions from Icelandic merchants are automatically categorized. Categorization improves as you use the app, learning your patterns across both currencies, so you spend less time sorting transactions and more time living your life in Iceland.

See the impact of exchange rates

When exchange rates shift, your combined budget view updates automatically. You'll see exactly how currency movements affect your overall spending, no surprises, no guesswork.