Introduction: Respiratory syncytial virus (RSV), a very common pathogen, causes variable disease severity. In addition to considerable clinical burden on children, their families and healthcare facilities, RSV infections in children also carry significant direct and indirect socioeconomic burden. Methods: We analyzed data from 5 consecutive RSV seasons (2015–2020) and used virologically confirmed RSV infections and age <5 years as case definition. Clinical information was retrieved from electronic patient records. Costs were estimated by assuming an annual 30% attack rate and a combination of direct medical costs and calculations of societal costs of lost productivity. Results: A total of 716 children younger than 5 years of age had confirmed RSV infection of which 254 needed hospitalizations, most of whom were previously healthy. The median length of admission was 3.6 days and 13 patients needed intensive care. The hospital admission incidence rate was 2.5/1000 children/year, but 9.1 for children younger than 1 years of age. The total annual cost of RSV was estimated at €4.3 million, of which 10% was direct healthcare costs. Discussion: The clinical and socioeconomic disease burden of RSV in Iceland is substantial despite slightly lower hospital admission rates than other high-income countries. The prevention of RSV in young children, either through maternal or infant vaccination, has the potential to decrease both clinical and financial impact of the annual epidemics.