An agreement whereby the employer covers the tax on the agreed allowance results in the net pay having to be grossed up in order to arrive at the gross pay. Such agreements are not binding on the tax authorities with respect to who is responsible for paying the tax due.
In cases involving net pay arrangements, the employer is responsible for gross pay being correctly calculated and reported in the form «Lønns- og trekkoppgave» RF-1015(certificate of pay and tax deducted, also called End of Year Certficate). The basis for grossing up shall consist of the take home pay plus any benefits in kind and surpluses on expense allowances included in the net pay arrangement. The Norwegian tax authorities have prepared special grossing up tables for the correct calculation of taxpayers’ gross pay.