Iceland, a small Nordic country in Europe, is simply breathtaking and heavenly, thanks to its land and water formations, the northern lights, and other attractions. In 2017, tourists in Iceland outnumbered the locals. For each Icelander, there were five tourists.

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If you are thinking about visiting Iceland real soon, you may be wondering about how locals view the practice of tipping, especially if you come from the United States and many other countries where tipping is customary. This is definitely a valid and even widely debated topic about Iceland. Here are some things you need to know.

Is tipping illegal in Iceland?

There is a myth going around among tourists that tipping is illegal in Iceland. This may come from the fact that many establishments refuse tips. This is untrue. Tipping is certainly not illegal.

The subject of legality comes into play when you talk about whether the recipient should pay taxes on tips or not, but that is not your problem as the giver of the tip.

Are Icelanders insulted by tipping?

Another rumor is that tipping is seen by Icelanders as something insulting. This may be rooted in the inherent hospitableness of the locals. Icelanders will gladly sit down with you, a tourist, over coffee or offer to tell you something about interesting sights in the area.

Many people think that tipping may offend Icelanders because it makes it appear like they are being nice only for the money. This is true if you tip the wrong person at the wrong place and/or time. We will talk more about this later.

Why is tipping unnecessary?

Whereas many European countries are becoming accustomed to the practice of tipping, Iceland has somewhat remained in the opposite direction. Tipping is almost never done in this country. This may come as a relief, considering how expensive everything is in Iceland.

The main reason for this is that gratuities are already automatically added into your bill. This applies to hotels, restaurants, cafes, taxis, and even stores. The amount shown on your bill is the exact amount you are expected to pay, nothing more and nothing less.

Service staff in Iceland is also paid well. They also have unions who make sure that they are given good wages and benefits. They definitely do not need tips.

What if I really want to tip?

Nothing should stop you from tipping service workers in Iceland for remarkable service. As mentioned earlier, it is neither illegal nor offensive. Icelanders are familiar with the custom due to the influx of tourists in their country, and they know that tips are a token of appreciation.

Aside from ISK (Icelandic krona), the Icelandic currency, USD is widely accepted by service establishments in Iceland, so there is no need to worry if all you have on you are in US dollars.

I insist on tipping. How much should I give?

Like in numerous other European countries, the common manner of tipping in Iceland is rounding up the bill to the next even amount or paying an additional 10% of the total bill.

But this may still vary depending on the type of establishment you’re at. In an upscale restaurant, you may want to give a larger margin than you would at a cheaper place.

Regardless of where you are, do not think about tipping too much. It does not make you look generous, only foolish or ignorant. In many restaurants, for example, there is already a 15% gratuity integrated into your bill. If you tip 10%, which is the unspoken standard amount in many European countries, that means the server is getting a 25% tip, which is just excessive.

Are there places where I’m not supposed to tip at all?

Do not tip at take-out counters, hotdog stands, pizza parlors, and similar places. It is just never done. You are also not expected to tip for cab rides, ordering drinks, or checking your coat. You will also rarely ever see tip jars or bowls in cafes and similar establishments. If you do see one, it is okay not to put in anything. Needless to say, do not even think about tipping outside of the service industry.

To conclude, it is neither illegal nor offensive to tip service employees in Iceland. You are free to reward good service, but do know that it is not expected or needed. Service workers in Iceland are paid relatively better than are their counterparts in other tourist-heavy destinations, and they do not need tips to get by.