Money in Iceland

Iceland uses the Icelandic krona. Cards are widely used, contactless payments are common, and foreign currencies are rarely accepted. For most visitors, the simple setup is one or two cards, a known PIN, a small cash backup, and a clear idea of bank fees.

For the overall budget, use the Iceland trip budget worksheet to add accommodation, transport, food and activities for your actual dates. Read Iceland without a car if transfers and tours will be a major part of your spending.

The Icelandic currency is the krona, plural kronur. You will usually see it written as ISK or kr. Central Bank notes currently include 10,000, 5,000, 2,000, 1,000, and 500 kr denominations. Coins include 100, 50, 10, 5, and 1 kr.

Exchange rates move, so do not memorize a conversion from an old article. Use current bank or card-app rates before making large decisions.

Most visitor money decisions happen in ordinary places: shops, cafes, restaurants, fuel stops, pools, tours, and transfers.

• Use a credit or debit card for most normal purchases.
• Know your card PIN before you travel.
• Carry a second card if a declined card would disrupt the day.
• Keep a small cash backup for rare cases, tips you personally want to give, or places where a fee machine or app does not cooperate.
• Avoid carrying large cash amounts unless your own situation requires it.

ATMs are available across Reykjavík and at Keflavík Airport if you need Icelandic króna. Check your own bank’s overseas withdrawal charges and any fee shown by the ATM before accepting the withdrawal.

In central Reykjavik, cards are the normal payment tool for small and large visitor purchases. Photo: Jóhann Heiðar Árnason, CC BY-SA 3.0; resized for this guide.

For most travelers, cash is a backup rather than the main way to pay. A small amount can lower stress for a remote bathroom fee, a tip you choose to give, a rural payment hiccup, or a backup when a card or app fails.

If you are camping, driving rural roads, or using small facilities, cash can be more useful than on a city break. Pair this page with camping in Iceland or driving in Iceland if those details apply.

A small backup is most useful around transfers, terminals, rural facilities, and timing-sensitive travel days.

In normal restaurants, cafes, bars, taxis, and tours, tipping is not expected in the way it is in some countries. If service is exceptional and you want to leave something extra, it is usually appreciated. But you should not feel that a standard tip is required.

• Do not add a tip because you think you must.
• Round up or leave a small extra amount only when you genuinely want to.
• For tour guides, check the operator culture if you are unsure.
• When paying by card, do not worry if no tip prompt appears.

Casual purchases are normally simple card payments; tipping is not part of most small transactions. Photo: Vincent van Zeijst, CC BY-SA 3.0; resized for this guide.

Iceland has VAT on goods and services. Non-Iceland residents may be eligible for a tax-free refund on qualifying goods that are exported from Iceland, but only when the purchase, form, receipt, goods, and validation process all meet the rules.

• Ask for a tax-free form in the store when the purchase qualifies.
• Keep the original receipt with the form.
• Keep the purchased goods available for validation when leaving Iceland.
• Do not count the refund until the form has been accepted and processed.

Tax-free shopping is most relevant when you buy qualifying goods to take home, not normal meals or services.

1. Tell your bank you are traveling if your bank still recommends it.
2. Know your card PIN before arrival.
3. Carry a backup card separate from your main card.
4. Pay in ISK unless you understand your card's conversion terms.
5. Keep a small cash backup, not a large cash budget.
6. Save receipts for tax-free purchases, disputes, and business-expense needs.
7. Set a budget for each day's accommodation, transport, food and activities instead of converting every small purchase on the spot.