Individuals working in Norway normally become subject to Norwegian employee tax from day one. However, working your way through a foreign tax system can be difficult and it triggers many questions. The most common questions are related to tax liability and level of taxation. In this blog we'll take you through employee tax, and the complexities of the Norwegian tax system.
What income is taxable in Norway?
The basic rule is that individuals working in Norway become subject to Norwegian tax from day one.
However, a tax exemption may be granted according to a tax treaty between Norway and the home country of the employee. In case the employer is not subject to tax in Norway, the employee may be exempted from tax. This exemption requires that the employees stay in Norway does not exceed 183 days.
However, note that the employee will, as a main rule, be liable for tax in Norway, when hired out to a Norwegian tax paying principal.
We differ between residency and domicile
When working in Norway, it is important to identify your tax obligations globally, rather than only focusing on the salary earned in Norway.
If you stay in Norway for more than 183 days in any 12-month period or more than 270 days during a 36-month period, you will become a tax resident in Norway.
This means that you are liable to:
- report global wealth and income
- pay tax on global wealth and income
Also read: Moved to Norway? Moved from Norway? Do I need to report and pay tax to Norway?
Guide: These are the Norwegian Tax Rules
Download guide to learn more.
If you're not a tax resident, you'll only have limited tax liability for certain types of income and wealth linked to Norway.
This means that you are liable to:
- Report income based on work performed in Norway.
- Mobilization/Demobilization for work that will be/have been performed on Norwegian Continental shelf.
- Pay tax on income earned in Norway.
It is possible to be tax resident in more than one country and thereby applicable to pay tax to both countries on the same income/wealth. To avoid double taxation, The Tax Act and tax treaties may entitle you to claim deductions for paid tax. The deduction must be claimed in your tax return.
Tax reporting obligations for employers
Foreign enterprises with activity in Norway, must report the employees’ salary on a monthly basis. Please keep in mind that this obligation also applies to personnel who are non- taxable to Norway.
Also read: All you need to know about the Norwegian tax report system – a-melding
Norwegian tax rates
The tax percentage in Norway depends on the income. Income tax for 2023 is 22 % of net wages, but if the income exceeds gross NOK 198 350-year or gross NOK 16 529 per month, a progressive bracket tax is levied. Your tax rate depends on which bracket your income is within.
The tax level will also depend on whether you are entitled to claim deductions in your annual tax return.
Tax return obligations
Everyone who has income from work performed in Norway must submit a tax return. The due date for filing your tax return 2023 is 30 April 2024.
Also read: 5 tax deductions to claim in your Norwegian tax return
National insurance
In addition to the income tax, employees working in Norway are obligated to pay national insurance contribution to Norway. For the income year 2023 the rate is 7,9%. Exemptions can be found in the Act. Typical exemptions are A1 or sailing on foreign flagged vessels.
Also read: Norwegian National Insurance Scheme
Wealth tax
If you are a tax resident in Norway, you may be obliged to pay wealth tax to Norway. The tax is based on the wealth that you have as of 31 December in each calendar year.
This wealth could for example consist of bank deposits, shares, cars and/or real property. You must pay wealth tax both to the municipality and to the State.
Wealth tax is calculated based on your net wealth. Your net wealth is the wealth you have after debt has been deducted.
The tax rate in 2023 is 1% for net wealth between MNOK 1,7 and MNOK 20, and 1,1% for net wealth above MNOK 20. You don’t pay tax on net wealth under MNOK 1,7.
Still not sure about your employee tax obligations?
Don't worry. Feel free to download our detailed guide about tax return, created for those liable for individual income tax - employee tax in Norway.
Guide: These are the Norwegian Tax Rules
Download guide to learn more.
Article first published 11 September 2018 - Updated February 2024.
Visit our website to find out how we can assist with your tax return to Norway.
