Best Bars in Reykjavik, Iceland: Nightlife, Prices, Tipping Guide

Anyone planning a night out in Reykjavík quickly learns that the city’s bar scene comes with a reputation—for epic late nights, stunning rooftop views, and bar tabs that can make your eyes water. A pint of beer typically runs between ISK 1,200 and ISK 1,500 (about US$9–11), but knowing where to find happy hour can save you a bundle.

Average pint of beer price: ISK 1,200–1,500 (≈ US$9–11) ·
Average cocktail price: ISK 2,000–2,500 (≈ US$15–19) ·
Minimum drinking age: 20 years old ·
Tipping expectation: Not required; service charge often included ·
Happy hour typical discount: 20–40% off drinks

Five quick facts, one pattern: Reykjavík’s nightlife is surprisingly compact, but the costs and etiquette catch many first-time visitors off guard.

How expensive is a pint of beer in Iceland?

Reykjavík’s drink prices are among the highest in Europe. A standard pint of beer at most downtown bars costs between ISK 1,200 and ISK 1,500 – roughly US$9 to US$11. Cocktails climb even higher, often ISK 2,000–2,500 (US$15–19). Even a soft drink like Coke will set you back ISK 500–700 (Guide to Iceland (travel authority)).

What is the average price of a cocktail?

Cocktails at Reykjavík’s nicer lounges and rooftop bars generally fall in the ISK 2,000–2,500 range. At venues like SKÝ Lounge & Bar (rooftop bar by the harbor), signature cocktails are priced accordingly, though happy hour (16:00–18:00 daily) can bring those down by 20–40%.

How much does a soft drink cost?

A glass of Coke or soda water typically costs ISK 500–700 in a bar. Bottled water is usually free or very cheap if you ask for tap – Icelandic tap water is excellent (Iceland Tours (travel guide)).

The implication: budget-conscious visitors should plan happy hour stops to keep costs manageable.

Does Reykjavik have a good nightlife?

Despite its small population (roughly 130,000 in the metro area), Reykjavík packs a punch after dark. The main drag – Laugavegur, along with Austurstræti and Bankastræti – is lined with bars, pubs, and clubs, all within a 15-minute walk. Guide to Iceland (travel authority) calls it “one of the most vibrant nightlife scenes in Europe” for its size.

What are the best areas for nightlife?

Laugavegur is the spine. Here you’ll find everything from sports bars to cocktail lounges. Austurstræti, a short walk south, hosts clubs like Paloma (open Fri–Sat 22:00–04:30) and whiskey bars like Dillon. Bankastræti connects the two districts and has its own clutch of venues (Iceland Tours (travel guide)).

What is a typical night out like?

Many Reykjavíkers start with a café-bar around 18:00, move to a pub for happy hour, and hit clubs after midnight. Bars typically stay open until 01:00 on weekdays and 03:00–05:00 on weekends. Clubs like Paloma keep going until 04:30 or later (Iceland Tours (travel guide)). The vibe is casual – dress codes are rare, and the crowd is a mix of locals and tourists.

The pattern: the earlier you go, the cheaper your drinks. Most happy hour deals run from 16:00 to 19:00, so that first beer can cost you ISK‱800 rather than ISK‱1,400.

What this means: sticking to a happy-hour strategy makes the night out both affordable and authentic.

Which is the best rooftop bar in Reykjavik?

Reykjavík’s low skyline and harbor location make rooftop bars a prime spot for sunset views. The most famous is SKÝ Lounge & Bar (rooftop bar by the harbor), located at Ingólfsstræti 1. It offers panoramic views of Faxaflói Bay and the mountains beyond. Other contenders include the rooftop at the Hilton Reykjavík Nordica and the bar at the top of the Radisson Blu 1919.

What are the top rooftop bars?

Besides SKÝ, the roof terrace at Þingholt Lounge & Bar (Þingholtsstræti 4–6) draws a lively crowd with its cocktail-centric happy hour (16:00–20:00). Both venues have daily happy hour discounts of 20–40% (Center Hotels (local hotel chain)).

What are the features of SKÝ Lounge?

SKÝ operates Sunday–Thursday 15:00–23:00 and Friday–Saturday until 01:00. Its happy hour runs 16:00–18:00 daily, with a late happy hour Sunday–Thursday 20:00–23:00. The bar serves craft cocktails, local beers, and small plates – all best enjoyed from the outdoor terrace (Center Hotels (local hotel chain)).

Three popular bars, one clear pattern: SKÝ offers the best harbor views; Þingholt wins for cocktail selection.

The catch: choose SKÝ for early sunset vistas and Þingholt for a longer evening.

Why is alcohol so expensive in Reykjavik?

The price tag isn’t arbitrary. Iceland imposes steep excise taxes on alcoholic beverages, enforced by the state alcohol monopoly ÁTVR. The government uses these levies to discourage consumption and fund public health. Guide to Iceland (travel authority) notes that these taxes can add 50% or more to the retail price of a bottle or pint.

What are the taxes on alcohol?

On top of a 24% VAT, Iceland applies a specific excise duty that varies by alcohol content. For spirits, the tax can exceed ISK 70 per percentage point of alcohol per liter. The result: a bottle of vodka that costs €20 in mainland Europe may retail for €40–50 in Iceland.

Is duty-free shopping cheaper?

Yes – significantly. Duty-free stores at Keflavík Airport offer prices on beer, wine, and spirits that are often 30–50% lower than in Reykjavík bars or liquor stores. Many travelers stock up on arrival. Just remember: you must be 20 to buy alcohol in Iceland (Iceland Tours (travel guide)).

The implication: the real savings aren’t in finding a cheap bar – they’re in buying your duty-free allowance and pre-gaming responsibly in your hotel room.

Do I need to tip in Iceland?

Tipping is not part of Icelandic culture. As Iceland Tours (travel guide) states, a service charge (þjónustugjald) is typically included in your bill, so the price you see is the price you pay. That said, rounding up the bill or leaving a small tip for exceptional service is welcomed, never expected.

What is the tipping etiquette?

If you do want to tip, the usual gesture is to round up to the nearest ISK‱500 or ISK‱1,000. For a ISK‱2,500 cocktail, leaving ISK‱3,000 is a generous but not obligatory gesture. Avoid leaving large percentages – it can make the staff uncomfortable (Center Hotels (local hotel chain)).

Is service charge included in the bill?

Yes. By law, restaurants and bars must display prices inclusive of all taxes and service charges. There is no separate “tip line” on card machines. If you pay by card (which most people do – cash is rare), the amount charged is exactly the menu price.

The consequence: you can enjoy your night out without adding extra to the bill.

What locals and fellow travelers say

“Lebowskis Bar is a must-visit for White Russians – it’s the Dude’s place in Reykjavík. Cozy, fun, and the drinks are strong.”

— Reddit user in r/VisitingIceland

“SKÝ Lounge offers the best rooftop experience in town. The views over the harbor during the golden hour are unbeatable, and their happy hour makes it affordable.”

— Center Hotels blog

For any first-time visitor to Reykjavík, the choice is clearer after reading these accounts: prioritize happy hour, skip the tip, and book a rooftop spot for sunset. The city’s nightlife is expensive but rewarding – and with a little planning, you can enjoy it without blowing your travel budget.

For a more offbeat experience, check out our guide to hipster bars in Reykjavik for a curated selection of trendy spots.

Frequently asked questions