If you’re planning a road-trip in Iceland in 2026, there are a few important things to factor into your budget before you even book your car. Iceland’s road funding system changed completely on January 1st 2026, paid car parks continue to multiply at major tourist sites, and since April 10th 2026, border crossings take a bit longer than before.
Nothing too dramatic, Iceland is expensive but absolutely worth it as always, but it’s much better to be prepared than to discover all this as an unpleasant surprise on your rental agency invoice when you finish your trip ☺️ So if you’re wondering what’s the parking prices in Iceland are, what the new taxes bring and where you should pay, this article is for you !
The big new thing in 2026 : the per-kilometer road tax
This is the most significant change, and the one everyone has been talking about since late 2025. The Icelandic government passed a new law introducing a per-kilometer road charge for all vehicles. This marks the end of a model primarily based on taxing fossil fuels, a system that had become outdated given the growing number of electric and hybrid vehicles on the road.
The Icelandic government’s reasoning is simple : in 2023, road-use revenue had dropped to just 7ISK per kilometer driven, a 43% fall compared to 2006. By decoupling road funding from fuel consumption, the state secures its revenue while continuing to favor cleaner vehicles.
How does it work ?
The principle is simple : every kilometer driven on Icelandic roads is charged based on the vehicle’s weight. Rates from January 1st, 2026 :
- Cars and SUVs up to 3.5 tons : 6,95ISK/km (~0.05€/km)
- Motorcycles : 4,15ISK/km (~0.028€/km)
- Heavy vehicles : progressive rate up to 45ISK/km
- Trailers over 3.5 tons : progressive rate
For those renting a standard vehicle in Iceland (you’re probably not renting a big trailer), for a typical road trip of 200-300 km per day, budget an extra 10-15€ per day. And yes, this new tax applies to all tourists without exception. The charge is linked to the use of the vehicle on Icelandic roads, not to the driver’s nationality or place of residence.
In practice, how does it work ?
If you’re renting a car, your agency handles everything, you don’t need to declare anything. Two models currently coexist depending on the rental company :
- Fixed daily rate : for example, Blue Car Rental charges 1390ISK/day (around 10€).
- Actual kilometer billing: for example, Hertz and Europcar charge the tax based on kilometers actually driven, collected at the end of your stay (with a bank pre-authorisation taken at the start). The full Ring Road (1500km) works out to around 13000ISK (~90€) in road taxes.
👉 In short, when you book your car online, you’ll either see a “road tax” line item appear, or you’ll be asked to pay the tax at the counter after the agency checks the mileage. I find the fixed daily rate more straightforward, no surprise at checkout.
If you’re bringing your own vehicle (via the Smyril Line ferry), you’ll need to pay a road use fee for the entire duration of your stay :
- Stay for less than 10 days: ~13900ISK (~96€)
- Stay of 11-20 days : ~20850ISK (~144€)
- Stay of 21-30 days : ~24325ISK (~168€)
- Stay of more than 30 days : 6,95 ISK/km (your odometer will be read and the total calculated at the end of your stay)
👉 In short, a fixed fee applies for stays under 30 days. For stays of more than 30 days, the details of this process are communicated when you submit form E9, which is mandatory for any vehicle owner wishing to travel in Iceland. You’ll receive it by email 30 days ahead of departure. More info at vegirokkarallra.is/en.
Good news : petrol should cost less
The government announced that this new per-kilometer tax will be offset by the removal of fuel taxes. Filling up will therefore cost less, so despite the new charge, the overall cost of your trip should stay roughly the same. Estimates suggest a drop of around 80ISK per liter at the pump. In simple terms : you’ll pay a little less when you fill up and a little more when you rent your car.
💡 Budget summary : the per-kilometer tax shouldn’t change the total cost of your road trip compared to 2025, it’s just a redistribution between the pump price and your rental invoice. What matters is checking how your rental company bills you before you sign.
Iceland’s only road toll : the Vaðlaheiðargöng tunnel
Iceland has just one road toll : the Vaðlaheiðargöng tunnel, in the north of the country near Akureyri. The tunnel is 7,5km long and allows you to bypass the Víkurskarð mountain pass, which can be tricky and dangerous in winter.
What makes it unique is that there’s no toll booth or payment machine on site. Instead, travelers must go to tunnel.is and pay by card within 24 hours before or after using the tunnel. It costs 2110 ISK (15€) per passage for a standard car. The system works via automatic licence plate recognition.
👉 If you forget to pay : in the event of non-payment, a higher charge will be billed to your rental agency, usually with additional admin fees on top. You’ll end up paying significantly more than the original toll. Either go to tunnel.is before heading north, or simply avoid the tunnel by selecting “avoid tolls” in Google Maps.
Paid parkings : a site-by-site summary
Over the past few years, paid car parks have been multiplying at Iceland’s major tourist sites. Most natural and tourist sites are themselves free, but increasingly their car parks or associated services (particularly toilets) are paid. Make sure to download Parka, EasyPark and Checkit.is, these are the apps used to pay for parking in Iceland.
Parka is the most widely used. You can either enter your licence plate and card details and activate “pay by plate”, meaning the app automatically detects when you enter a paid car park and pays for you, or you can do it manually each time you park at a paid site.
Some sites like Seljalandsfoss or Ytri-Tunga don’t use Parka, so you’ll need to pay directly at the machine on the car park (like a standard pay-and-display in most countries) or via EasyPark/Checkit.
You can download a PDF of all paid car parks in Iceland right here.
👉 The vast majority of sites are equipped with cameras that record licence plates, so your rental agency will forward any fine, at an inflated rate of course, if you don’t pay on the spot. Don’t try to skip it.
Reykjavík : parking zones
City car parks are also paid via Parka, but unlike tourist sites where you can pay later, in the city you need to start the virtual meter as soon as you park. Checks are very frequent and a fine can land within 15 minutes, so don’t “forget”. Paying via Parka is very convenient because you only pay for the exact time you spend, and you can stop the session remotely from your phone. Pay-and-display machines also accept contactless bank cards.
| Zone | Payment hours |
| P1 | Mon-Fri 9AM-9PM / Sat-Sun 10AM-9PM (3h max) |
| P2 | Mon-Fri 9AM-9PM / Sat-Sun 10AM-9PM |
| P3 | Mon-Fri 9AM-6PM (excluding public holidays) |
| P4 | Mon-Fri 9AM-4PM (excluding public holidays) |
Zone P4 is often free outside the hours above, if you don’t mind walking 10-15 minutes, it’s the best option. Worth noting : the town of Selfoss also has a paid parking system in the city center.
Keflavík airport
The first 15 minutes are free. For longer stays (3+ days), the long-stay car park with shuttle is significantly cheaper than the terminal car park. Book in advance at kefairport.com for the best rates..
New from April 2026 : the EES border system
This is something very few travelers know and have anticipated, and yet it can impact your arrival in Iceland. Since April 10th 2026, Iceland (and all Schengen countries) has implemented the new digital border control system EES (Entry/Exit System).
The system records fingerprints and facial recognition data for all non-EU/EEA nationals at every entry and exit from the Schengen area. It replaces traditional passport stamps. Early reports from other European airports point to significant queues, with some travelers missing their flights due to the delays. Since Keflavík airport (KEF) is Iceland’s main entry point, slowdowns are expected during peak season (May to September).
Try to arrive at the airport considerably earlier than usual. If you have a tight connection or a rental car to collect at a fixed time, allow at least an extra hour for border control.
👉 Who is affected ? Non-EU nationalities (Canadians, Americans, British, Australians in particular). European citizens are not impacted.
A few rules to not forget
⛺️ Wild camping and overnight van parking : since 2015, wild camping has been banned in Iceland, including overnight van parking in non-dedicated tourist site car parks. This rule is being enforced increasingly strictly in protected national areas.
👮 Fines : since most sites have cameras recording licence plates, your rental agency will send you any unpaid fine, plus their own admin fees on top. Trust me, they won’t miss it. I once forgot to pay the car park at Seljalandsfoss and received an email within an hour of leaving the site telling me a fine was waiting for me (I thought I could pay the parking after) 🙃 My best advice is to pay the parking, it’s a lot cheaper than paying the fine.
⏳ Payment window : you generally have until midnight (sometimes 24 hours) to pay for parking, but that’s not always the case (see Seljalandsfoss above). For the tunnel in the north, it’s a maximum of 24 hours before or after you use it.
In summary
👉 Per-km road tax : 6,95ISK/km (~0.05€/km) since January 2026, paid to your rental company who passes it on to the government. Offset by a drop in petrol prices. Budget: 10-15€/day for 200/300 km.
👉 Toll : one tunnel only in Iceland (Vaðlaheiðargöng, near Akureyri), 2110ISK, pay at tunnel.is within 24 hours.
👉 Car parks : around 1000 ISK (~7€) on average at almost all tourist sites. Download Parka before you leave.
👉 Reykjavík : zones P1-P4, paid on weekdays 9AM–6PM, via Parka or pay-and-display.
👉 Fines : just pay them, an unpaid fine costs 3 to 5 times more once car rental agency fees are added. Your rental company generally checks for outstanding fines when you return the car, so you can settle up before you fly home.
And if you need to plan more, I’ve created a 110-pages Iceland Guide, with all the info you need to organize your trip :
- 5 ready-to-go itineraries, with budgets
- All the info on Iceland
- A detailed guide of seasons
- A detailed guide on how to drive in Iceland
- 3 exclusives photographe guides with my tips and secrets
- Tons of discounts to save hundreds of euros = the map and guide are more than reimbursed
And of course my interactive Iceland Photography Map is included, with +400 spots all around Iceland. By combining the Map and Guide, you get the most powerful tool to explore the country : easily visualize places, optimize your days and enjoy Iceland by being well prepared.
I hope Iceland puts as many stars in your eyes as it does in mine ! Have a safe travel to Iceland 🇮🇸
Marie
