How is the tax calculated?

There are two bases for calculating tax:

  • Personal income (gross pay and taxable benefits and allowances from your employer). Bracket tax to the state is calculated on this basis. National Insurance contributions are also calculated on the basis of personal income. 
  • General income (gross income minus deductions from income). Tax to municipal and county authorities and equalisation tax to the state is calculated on the basis of general income. The basic tax-free allowance for general income is called a personal allowance.

If you stay in Norway for the whole year, you will be entitled to the full minimum deduction and personal allowance (12/12). If you are resident in Norway for part of the year, the deductions and allowance will be reduced in proportion to how long you have been resident in Norway. If you are liable to tax on salary but not resident, you will be entitled to the minimum deduction and personal allowance for the period you have had taxable salary. If, for example, you worked in Norway for between four and five months in the income year, the allowance and deductions will be 5/12 of the full amounts.

Example of what the tax will be for an employee who stays in Norway for less than 183 days:

Your tax depends on how much income you earn and on how long you stay here. The following is an example of an employee who stayed here to work for five months (less than 183 days) in 2017:

Work in Norway for 20 weeks of 40 hours at

NOK 300 per hour =

NOK 160,000  
100 hours’ overtime at NOK 300 = NOK   30,000  
Total pay NOK 190,000  
Holiday pay:10.2 per cent of NOK 190,000 NOK   19,380  
Total taxable income in Norway NOK 209,380 NOK 209,380

Minimum deduction: 44 per cent of NOK 209,380

= NOK 92,127, but maximum 5/12 of NOK 94,750=

NOK   39,479  

Standard deduction for foreign employees:

10 per cent of NOK 209,380=

NOK   20,938  
Total deductions NOK   60,417 NOK   60,417

General income is thus

NOK 209,380– NOK 60,417 =

  NOK 148,963
Total tax    

Bracket tax - 0 per cent of 5/12 of NOK 164,100

NOK 0  

Bracket tax - 0,93 per cent of 5/12 of NOK 164,101-230,950

NOK 259

 

Bracket tax - 2,41 per cent of 5/12 of NOK 230,951-580,650

 

NOK 1,271  

Total bracket tax

  NOK 1,530
Tax on general income is calculated on NOK 148,963  

Reduced by 5/12 of the personal allowance

in class 1:NOK 53,150 =

NOK   22,146  
24 per cent tax shall be calculated on NOK   126,817  
The total tax on general income is   NOK 30,436

In addition comes National Insurance

contributions of 8.2 per cent of NOK 209,380=

  NOK 17,169
Total tax and National Insurance contributions   NOK 49,135