Before that he played in Iceland for Völsungur, KA and Valur, where he was a key player in the team that won the 2007 Úrvalsdeild, Valur's first league title in 20 years.

He was signed by Stabæk in July 2008 and became one of the heroes for them in the 2008-season when he headed in the 2–1 goal in overtime against the current league champions Brann at Brann Stadion and practically secured Stabæk's first league gold ever.

Pálmason made his debut for the Icelandic national team in a friendly against Belarus in February 2008.

He was a regular member of the squad under former coach Ólafur Jóhannesson Pálmi's mother was Björg Jónsdóttir, a former member of the Icelandic national handball team.

This biographical article related to association football in Iceland is a stub.