Tax and Social Security when working in Norway
If you’re considering or already working on an assignment in Norway, it’s important to understand how taxes and social security work. Whether you’re staying for a short period or a longer-term contract, Norway has specific tax rules that apply to foreign workers. This page will guide you through the key tax schemes, social security contributions, and additional considerations, helping you navigate the Norwegian tax system with ease. We’ll also provide guidance on expenses, pensions, and the steps you need to take to register for tax when working in Norway.
Will I Pay Tax in Norway?
Yes, you will need to pay tax in Norway if you are a resident or working on an assignment. If the end client or fee payer has a permanent establishment in Norway, your income earned in Norway is taxable from day one. You may also become taxable on your worldwide income if you become a tax resident in Norway.
How Much Tax Will I Pay?
There are two main tax schemes in Norway:
1. PAYE Scheme
This is a flat tax rate of 25% (reduced to 17.2% if exempt from social security with an A1 Certificate). The PAYE scheme is suitable for foreign workers staying for a shorter period and earning less than 670,000 NOK per year (in 2024). Certain types of income, such as earnings from work on the Norwegian Continental Shelf, are excluded from the PAYE scheme. We can help determine if PAYE is suitable for you and whether your income qualifies.
2. General Tax Scheme
For longer term contracts, or where income exceeds the PAYE threshold, general tax applies. The tax system is Norway is progressive from 22%, and the average rate in 2024 is between 31-33%. We would be happy to provide you with an illustration of potential net income, however please note you will need to apply for a tax card on arrival, and that will inform us of the correct rates to apply.
Will I Pay Social Security in Norway?
Yes, social security contributions are due from day one unless you qualify for a Posted Worker Certificate of exemption (A1/E101) from your home country. Eligibility depends on various factors, and we can assist with the application process.
In 2024, the rates are 14.1% for the employer and 7.8% for the employee. Additionally, there’s a 5% employer contribution on wages exceeding 850,000 NOK, with a maximum employer contribution of 19.1%. The employee’s social security contribution is included within the tax bands for your tax code.
Expenses
Certain expenses incurred for your work in Norway may be tax deductible. Expenses must be wholly, exclusively, and necessarily related to your Norwegian assignment. Some deductible expenses include travel between your home country and Norway and accommodation, provided you qualify as a commuter. To determine if you are classified as a commuter, visit the Norwegian Tax Administration website: Am I a commuter? – skatteetaten.no.
Mandatory Occupational Pension Scheme (OTP)
OTP – Mandatory occupational pension scheme is a pension scheme for employees. All employers are required to pay an amount corresponding to at least two percent of the employees’ salaries for their pension.
Right to Work in Norway
Workers travelling to Norway from within the EU/EEA have an automatic right to work. Workers coming to Norway from outside of the EU/EEA will require a Work Permit, and we have a full support system in place to help you obtain the correct visa.
Registration for Tax
You must apply in person for your D Number as an ID check is required. This is obtained by making an appointment to attend a local tax office, taking with you your passport. This should be completed as soon as possible on arrival, as your employer will receive notification electronically on what tax to apply. Employers must deduct at least 50% of your income if a tax card application has not been completed.
Currency
The currency in Norway is the Norwegian Krone (NOK). All tax payments must be made in NOK.
Disclaimer
This information is provided for general reference purposes only. It does not constitute tax, legal, or accounting advice. You should consult with professional advisors for specific guidance. Cool Company and its affiliates do not provide tax, legal, or accounting advice.