Road tolls in Iceland are minimal. The country has one toll tunnel in the north, the Vadlaheidi Tunnel, and the Hornafjordur Ring Road toll near Hofn, plus a per-kilometer road tax that rental cars fold into your bill. Read on to learn exactly what you pay, where, and how to settle it before you drive.
Driving in Iceland is one of the easiest road-trip experiences in Europe, with very few places that charge for the road itself. Travelers planning self-drive tours, following the Ring Road, or mapping out self-drive itineraries and road trips will only meet a toll in two places.
Most rental car companies handle the road tax automatically, folding it into your booking so you never deal with the tax office yourself. It is a per-kilometer charge that replaced fuel taxes in 2026, and it applies to every vehicle on Icelandic roads, including rental cars.
This guide covers both tolls, the kilometer-based road tax, and fees that tolls do not cover at all. Keep reading to know which routes charge, how much, and how to pay without ever stopping at a booth.
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What To Know About Road Tolls in Iceland
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Iceland has one active toll, the Vadlaheidi Tunnel near Akureyri in the north. A single trip for a car under 3.5 tonnes (3,500 kg) costs 2,216 ISK (about 16 USD).
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From September 1, 2026, a second toll applies to a Ring Road section in Hornafjordur, near Hofn in the southeast, at 1,500 ISK (about 11 USD) for a single car trip.
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Both Iceland tolls are paid online by license plate, with no booths and no cash.
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The Hvalfjordur Tunnel near Reykjavik charged a toll until September 2018 and has been free ever since.
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Since January 1, 2026, a per-kilometer road tax of 6.95 ISK (about 0.05 USD) per kilometer has replaced fuel taxes. For rental cars, it is settled at online check-in or pickup.
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Parking fees, fuel, and traffic fines are separate costs that the tolls and road tax do not cover.
The Two Toll Roads in Iceland
Iceland has two toll roads. The first is the Vadlaheidi Tunnel in the north, near Akureyri, which has charged a toll since it opened in 2018. The second is a section of the Ring Road in Hornafjordur, near Hofn in Southeast Iceland, which starts charging on September 1, 2026.
Every other road and tunnel is free, including the Hvalfjordur Tunnel near Reykjavik. Away from these two points, the cost of using the roads is folded into a national per-kilometer tax rather than charged at the roadside, so you can drive the Golden Circle, the South Coast, and almost every route without paying a toll.
The Vadlaheidi Tunnel Toll Near Akureyri
The Vadlaheidi Tunnel, or Vadlaheidargong, is the only toll tunnel in Iceland. It runs about 4.7 miles (7.5 km) through the mountain east of Akureyri. A single trip for a car under 3.5 tonnes (3,500 kg) costs 2,216 ISK (about 16 USD).
Many travelers driving between Akureyri and the Lake Myvatn area use it. The tunnel replaces a longer, weather-exposed stretch of Route 1 over the Vikurskard Pass and shortens the route by around 10 miles (16 km).
If you prefer a free alternative, you can take the old road over Vikurskard Pass. Take it in summer or calm weather, when it is a scenic drive with views over the fjord. Avoid it in winter, snow, or high wind, when it is often risky or closed, and use the tunnel instead.
How To Pay the Vadlaheidi Tunnel Toll
Photo from Wikimedia Commons, by Eysteinn Guðni Guðnason. No edits made.
You pay the Vadlaheidi Tunnel toll online through the official toll-collection website, as there are no booths or barriers on the road. A camera reads your license plate, and the payment window runs from 24 hours before to 24 hours after your trip.
If you do not pay on time, a claim is sent to the vehicle owner's online bank at no extra cost, and a collection fee is added only if that goes unpaid. With a rental car, the agency is the registered owner, so an unpaid toll usually lands back on your card with a handling fee. Paying promptly online is always the cheapest route.
The Hornafjordur Ring Road Toll Near Hofn
Photo from Wikimedia Commons, by Alexander Grebenkov. No edits made.
The Hornafjordur Ring Road Toll is the new toll road in Iceland. From September 1, 2026, the toll covers a newly built section of Route 1 near the town of Hofn in Southeast Iceland. It is the first toll charged on an open stretch of the Ring Road rather than in a tunnel, introduced to help pay for the road's construction.
The project rebuilt about 11.8 miles (19 km) of Route 1 with several new bridges. It shortens the Ring Road by around 7.5 miles (12 km) and cuts 15 to 20 minutes off the drive. Travelers heading along the southeast coast toward Hofn and the eastern Ring Road will use it.
A single trip for a car under 3.5 tonnes (3,500 kg) costs 1,500 ISK (about 11 USD), dropping to 950 ISK (7 USD) per trip on your second through fifth drive in the same month. That makes it cheaper than the Vadlaheidi Tunnel toll in the north.
How To Pay the Hornafjordur Ring Road Toll
Photo from Wikimedia Commons, by Rémih. No edits made.
You pay the Hornafjordur Ring Road Toll online, as the collection is fully automated with no need to sign in or pay as you drive through. Automated cameras read your license plate, and a bill is sent to the vehicle owner's account at the end of each month through a dedicated toll website that launches in summer 2026.
With a rental car, the rental company is usually the registered owner, so the toll bill tends to be passed on to you, sometimes with a handling fee. Check how your rental company deals with tolls before you set off.
The Free Hvalfjordur Tunnel Near Reykjavik
Photo from Wikimedia Commons, by Eysteinn Guðni Guðnason. No edits made.
The Hvalfjordur Tunnel used to charge a toll but has been free to use since September 2018, when its construction loans were paid off. The tunnel runs about 3.5 miles (5.7 km) beneath the fjord and saves close to an hour compared with driving around it.
You will drive through it on Route 1 when heading north from Reykjavik toward West Iceland, the Snaefellsnes Peninsula, the Westfjords, or North Iceland.
A toll could return one day. The government has floated reinstating a charge to help fund a planned second tunnel, an idea that has met local opposition. Nothing is confirmed, so the tunnel stays free for now.
Iceland's Per-Kilometer Road Tax
Iceland's per-kilometer road tax, known locally as kilometragjald, is a charge of 6.95 ISK (about 0.05 USD) per kilometer for cars under 3.5 tonnes (3,500 kg). It took full effect on January 1, 2026, replacing the old fuel and oil taxes with a charge based on how far you drive rather than how much fuel you burn.
The system is deliberately low-tech, based on odometer readings rather than any tracking device, with owners reporting mileage and being billed monthly. Removing the old fuel tax was expected to bring pump prices down, although they still rise and fall with the global oil market.
As a visitor, you never deal with the tax authority yourself. Rental companies collect the kilometer tax for you and settle it at online check-in before arrival or at pickup. In practice, it is a small charge on top of your rental, balanced by cheaper fuel at the pump.
Other Driving Costs Not Covered by the Road Tax
The per-kilometer road tax pays for public roads only, so several common travel costs are billed separately. The main ones to budget for are listed below.
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Parking fees apply in central Reykjavik and Akureyri and at popular sites such as Thingvellir National Park, Seljalandsfoss Waterfall, and Skaftafell Nature Reserve. Our guide to parking in Reykjavik explains the city zones.
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Fuel is still paid for at the pump, now without the old fuel tax built in, and our guide to gas stations in Iceland covers where to fill up.
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Traffic fines for speeding or illegal parking are issued and paid separately from any tolls.
Future Toll Roads and Tunnels in Iceland
Iceland's toll network is set to grow. The Hornafjordur Ring Road is the first project under the country's cooperative-project law, and more are planned.
The next is a bridge over the Olfusa River at Selfoss, on the main South Coast route, which is due to open in 2028 with a toll of around 495 ISK (about 3.50 USD) for a car. Further ahead, the planned Sundabraut Crossing in Reykjavik is also expected to be financed by tolls.
The government has gone further still, presenting a bill that opens the door to tolls on all main routes out of the capital area, including roads such as Reykjanesbraut and Sudurlandsvegur.
How To Handle Road Tolls in Iceland
Road tolls in Iceland are simple compared with those in mainland Europe. You have the Vadlaheidi Tunnel, the Hornafjordur Ring Road toll near Hofn from September 2026, and a per-kilometer road tax that your rental handles. Pay either toll online on time, and keep parking and entrance fees in mind separately.
To plan the rest of your trip, browse our rental cars and self-drive tours for an easy way to cover every cost in one booking. It also helps to know how to drive safely in Iceland, recognize the country's road signs, and have a plan for finding your way on the road.
How many toll roads are in Iceland?
How much is the Vadlaheidi Tunnel toll?
Is the Hvalfjordur Tunnel still a toll road?
How do you pay road tolls in Iceland?
How much is Iceland's per-kilometer road tax?
Does my rental car cover Iceland's road tax?
Do you need a toll pass or transponder in Iceland?
Is there a toll on the Ring Road in Iceland?
How much is the Hornafjordur Ring Road toll?
Is it hard to drive in Iceland as a tourist?
Road tolls really are this simple once you know the two tolls and the road tax. What is the first place you plan to drive to in Iceland? Tell us in the comments below.
Born on the west side of Reykjavík and raised in the heart of downtown, I’ve spent most of my life surrounded by Iceland’s beauty. I’m a proud father of two and an avid traveler who has visited five continents—but Iceland remains, without a doubt, the most breathtaking place I know. I’ve traveled extensively throughout the country, exploring its hidden gems and natural wonders. My passion for Iceland and for helping others experience it led me to co-found Guide to Iceland, where we focus on connecting travelers with unique, local services and unforgettable adventures.
