The Icelandic Guide

Iceland Currency: Icelandic Króna Guide

· 4 min read Practical
Street lined with cars, houses, and mountains in the distance, Reykjavik, Iceland

Contents

  1. The Icelandic Króna (ISK)
  2. Cards vs Cash
  3. Getting Cash
  4. Prices Reference
  5. Tipping
  6. Dynamic Currency Conversion - Decline It
  7. ATMs - Which to Use
  8. VAT Refunds
  9. Related Guides
  10. Plan Your Trip

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.

Dynamic Currency Conversion - Decline It

At card terminals and ATMs, you may be asked whether to pay in your home currency or in Icelandic Króna. Always choose ISK (Icelandic Króna). Choosing your home currency triggers Dynamic Currency Conversion (DCC), which applies a conversion rate set by the merchant or ATM operator - typically 3–5% worse than your bank’s rate. This is a common source of avoidable expense in Iceland.

ATMs - Which to Use

All major Icelandic banks operate ATM networks with reasonable withdrawal limits. Landsbankinn, Íslandsbanki, and Arion Bank ATMs are widespread. Most charge no operator fee to international cardholders, though your own bank’s foreign transaction fee (typically 1–3%) still applies. Avoid ATMs in tourist shops or independent kiosks - these often charge their own withdrawal fees on top.

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. The Kringlan and Smáralind shopping malls in Reykjavík have dedicated Tax Free desks to process refunds before you reach the airport.

Compare car hire in Iceland - a 4WD or campervan gives the flexibility to explore at your own pace.

Get travel insurance for Iceland - policies covering glacier hikes, F-road driving, and volcanic disruption.

Browse Iceland tours - day trips, activity bookings, and multi-day packages across the country in one place.

Plan Your Trip

✈️ Book your flights to Iceland 🛡️ Get travel insurance 📱 Stay connected with an eSIM 🚗 Rent a car

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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.