The Icelandic Guide

Iceland Currency: Icelandic Króna Guide

· 2 min read Practical
Reykjavík street scene with shops and cafes

Contents

  1. The Icelandic Króna (ISK)
  2. Cards vs Cash
  3. Getting Cash
  4. Prices Reference
  5. Tipping
  6. VAT Refunds

The Icelandic Króna (ISK)

Iceland uses the Icelandic Króna (ISK). Iceland is not in the EU and does not use the Euro. Prices in tourist areas are sometimes quoted in Euros or USD but payment in ISK is standard.

Approximate exchange rates (as of 2026 — verify before travel):

  • ISK 180–185 = £1 GBP (approximate)
  • ISK 130–140 = €1 EUR (approximate)
  • ISK 105–115 = $1 USD (approximate)

These rates fluctuate — check xe.com or Google for current rates before your trip.

Cards vs Cash

Cards are the standard payment method in Iceland. The country is effectively cashless for practical purposes:

  • Hotels, restaurants, shops: all accept Visa and Mastercard
  • Petrol stations: all accept cards including at automated pumps
  • Small guesthouses and farms: almost all accept cards
  • Geothermal pools and municipal facilities: all accept cards
  • Campsite fees: usually card accepted

When cash is occasionally useful:

  • Some very remote farm honesty boxes
  • Small market stalls at folk events
  • Emergencies (card machine failures happen occasionally)

Getting Cash

ATMs: Available throughout Reykjavík and in every town on the Ring Road. Fewer in remote areas — Egilsstaðir, Akureyri, Vík, and Höfn all have ATMs. Fill up on cash (if needed) at these points.

ATM fees: Your own bank will charge a foreign transaction fee (typically 1–3%). Use ATMs affiliated with major networks (Visa/Mastercard) to avoid additional operator fees where possible.

Exchange desks at airport: Available at Keflavík Airport but rates are typically worse than ATM withdrawal rates. Not recommended unless you need cash immediately on arrival.

Exchanging abroad: Icelandic Króna is not widely traded outside Iceland. Don’t try to buy ISK before arrival — you won’t find it or will get poor rates.

Prices Reference

To calibrate your spending expectations:

  • Coffee (flat white/cortado): ISK 700–900
  • Hot dog at Bæjarins Beztu: ISK 650
  • Pint of local beer: ISK 1,200–1,800
  • Mid-range restaurant main: ISK 3,500–6,500
  • Petrol per litre: approximately ISK 280–320
  • Supermarket lunch (bread, cheese, fruit): ISK 1,500–2,000

Tipping

Not customary in Iceland. Restaurant bills include service. Tour guides and drivers are not normally tipped. This applies across the board — you won’t cause offence by following local custom.

VAT Refunds

Iceland charges VAT (VSK) at 24% on most goods and 11% on some services (hotels, food). Non-EU visitors can claim a refund on goods purchased above approximately ISK 12,000 from participating retailers. Look for the ‘Tax Free Shopping’ sign. Fill in a form in store, present at the airport before departure.

Frequently Asked Questions

Should I bring cash to Iceland?
Cards are accepted almost everywhere in Iceland — restaurants, petrol stations, small guesthouses, market stalls, and even at roadside honesty boxes for farm products. Cash is rarely necessary. Having ISK 5,000–10,000 for emergencies is sensible but don't go out of your way to bring large amounts of cash.
What is the best way to get Icelandic Króna?
Use your debit or credit card directly for purchases — this gives the best exchange rate in most cases. If you need cash, withdraw from ATMs in Reykjavík (use your bank's international ATM network). Exchange rates at airport exchange desks and hotel desks are typically worse than ATM rates.
Is tipping expected in Iceland?
No — tipping is not customary in Iceland. Service charges are included in restaurant bills. You won't cause offence by not tipping, and leaving 10–15% as you might in a US restaurant is not expected. If service was exceptional, rounding up is appreciated but not standard.