Contribution-free amount for employers

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Employers in zone 1a are eligible for the contribution-free amount scheme. Employers in zones II-V which carry on sector-exempt activity are also eligible for the scheme.

Only one contribution-free amount is granted per employer.

In this context, ‘employer’ means a legal entity, see the Central Coordinating Register for Legal Entities Act Sections 2 and 4 first paragraph. Even if several legal sub-entities have been registered within a single legal entity, you will only be entitled to one contribution-free amount as an employer. If the legal entity is part of a group of enterprises, the entire group must be considered as a single entity. ‘Group’ means a group of enterprises which are associated with each other through one enterprise having a controlling influence over at least one other enterprise.

The contribution-free amount scheme in zone Ia

If you are an employer in zone 1a, you will be eligible for a contribution-free amount scheme. The contribution-free amount is NOK 500,000 per year. Employers in zone 1a can calculate employer’s National Insurance contributions using a rate of 10.6 percent until the benefit that this gives amounts to NOK 500,000. When the difference between employer’s National Insurance contributions calculated using the highest rate (14.1 percent) and contributions calculated using the reduced rate (10.6 percent) exceeds NOK 500,000, the employer must switch to using the highest rate (14.1 percent).

Employers can calculate when the enterprise can no longer apply the 10.6% rate as follows: Total salary expenses for using the 10.6% rate = 500,000/(0.141-0.106).

For an overview of the municipalities within zone 1a, see theDirectorate of Taxes’ report on employer’s National Insurance rates to the National Insurance scheme.

The contribution-free amount scheme in zones II-V for sector-exempt activity

Employers which carry on sector-exempt activity must generally pay employer's National Insurance contributions at the highest rate (14.1 percent). This applies regardless of where the enterprise is located.

However, employers which carry on sector-exempt activity can still use the differentiated rates up to a contribution-free amount of NOK 500,000 in zones II-V. The general contribution-free amount scheme in zone 1a also applies to sector-exempt activities.

The contribution-free amount means that employer's National Insurance contributions can be calculated using the differentiated rates until the differences between the contributions calculated according to the highest rate and those according to the rate in the zone in which the employer is registered amounts to NOK 500,000 during the income year. Once the contribution-free amount has been used up, the employer must switch to using the rate of 14.1 percent.

The contribution-free amount for road freight transport is NOK 250,000.

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