A total of 63 parliamentary seats are elected, of which 54 are constituency seats and 9 are balancing seats. The constituency seats are allocated on the basis of election results in each constituency, while the balancing seats are allocated on the basis of the number of votes nationwide between the parties that receive a minimum of 5% of the vote. Source
Constitution of the Republic of Iceland (1944, last amended 24 June 1999), accessed 3 August 2021
Article 31. Althingi shall be composed of 63 members elected by the people by secret ballot on the basis of proportional representation for a term of four years.
Electoral districts shall be no fewer than six and no more than seven in number. Their boundaries shall be defined by law; however, the National Election Board may define the boundaries of the electoral districts in Reykjavik and its vicinity.
For each respective electoral district, six seats shall be allocated in accordance with the outcome of elections within that district. The number of parliamentary seats for each electoral district shall in other respects be defined by law, subject however to the provisions of the fifth paragraph.
Seats other than those allocated to the electoral districts shall be distributed within each respective electoral district with the purpose of providing individual political parties with representation reflecting to the fullest possible extent each party's total number of votes. However, only political parties having received at least five per cent of all valid votes cast nation-wide shall be eligible for such distribution.
If the number of voters on the voting register represented by each parliamentary seat, allocated or distributed, becomes in one electoral district one half of the number represented by each parliamentary seat in another electoral district, the National Election Board shall revise the number of seats representing each electoral district with the aim of reducing this difference. This shall be provided for in further detail by law.
Provisions of law relating to election district boundaries and the methods of allocating seats in Parliament can only be amended by a two-thirds majority in Althingi.