Brief information about the exemption from employer’s national insurance contributions

Salary and holiday pay during illness, maternity or paternity leave, etc. that will be refunded from the National Insurance Scheme, are exempt from employer's national insurance contributions, see section 23-2, subsection 5, first sentence of the National Insurance Act. The exemption from employer’s national insurance contributions only apply if these benefits are actually refunded. To be granted an exemption from employer's national insurance contributions, you must both claim the refund and be entitled to a refund pursuant to sections 8-20, subsection 3, 8-21, subsection 3 or 22-3 of the National Insurance Act.

You can choose between applying for the exemption when advancing the benefits or when the benefits are refunded by the Labour and Welfare Administration (NAV). See the Directorate of Taxes’ statement of principle.

When can you claim an exemption from employer's national insurance contributions when advancing benefits from NAV?

You can reduce the calculation basis for employer's national insurance contributions when you actually advance a benefit. At the time of reporting, you must be able to show how you calculated the refund amount that you have used as your basis. This could, for example, be an overview of how much time the employee has been gone in the period for which the report concerns, and a calculation of the daily rate NAV is likely to use as their basis. If you do not claim a refund from NAV, you are not entitled to reduce the calculation basis for the employer's national insurance contributions.

As an employer, it is your responsibility to ensure that the amount exempt from employer's national insurance contributions is correct. If you cannot calculate the likely advanced benefit amount, you must wait to reduce the calculation basis until you receive the refund from NAV.

Reporting in the a-melding when reducing the contribution basis with benefits you are advancing from NAV

When advancing sickness benefit and other benefits on behalf of the National Insurance Scheme, you must report this as ordinary salary subject to employer's national insurance contributions. You include the benefits in the employer's national insurance contributions basis for salary and remuneration as ordinary benefits subject to contribution.

To exempt the amount you have advanced from employer's national insurance contributions, you must state this in the employer's national insurance contributions basis for refund of sickness benefit, etc. You can only reduce the contribution basis with the amount you will be refunded.

The exempt amount is a negative amount, and it will reduce the amount of calculated employer's national insurance contributions. Use the same rate that you would use to calculate employer’s national insurance contributions.

How to correct errors

When you have reported a refund amount that is too low

If you have reported a lower amount in the employer's national insurance contributions basis for refund of sickness benefit, etc. when advancing the NAV benefit than what you are actually refunded, you must correct the information.  You can either correct the a-melding for the calendar months in which the contribution basis was reduced, or you can include the difference between the previously calculated refund and the received refund in the month in which you receive the refund from NAV. 

When you have reported a refund amount that is too high

If you have reported a higher amount in the employer's national insurance contributions basis for refund of sickness benefit, etc. when advancing the NAV benefit than what you are actually refunded, you must correct the a-melding for the calendar month in which you advanced the benefit.

See how to correct errors in the a-melding guidance under the topic Employer's national insurance contributions.

When can you claim an exemption from employer's national insurance contributions when receiving a refund from NAV?

You can reduce the calculation basis for employer's national insurance contributions when you have actually advanced a benefit for NAV. If you do not claim a refund from NAV, you are not entitled to reduce the calculation basis for the employer's national insurance contributions. If you claim an exemption from employer's national insurance contributions when you receive a refund from NAV, use the form «Oppgjørsrapporten (K27) refusjoner fra NAV» (in Norwegian only) to document the amount that is exempt from employer's national insurance contributions.

Reporting in the a-melding when reducing the contribution basis with refunds you have received from NAV

When advancing sickness benefit and other benefits on behalf of the National Insurance Scheme, you must report this as ordinary salary subject to employer's national insurance contributions. The benefits are included in the employer's national insurance contributions basis for salary and remuneration as ordinary benefits subject to contribution.

When you receive the settlement report from NAV, you state the refunded amount in the employer's national insurance contributions basis for refund of sickness benefit, etc. You can only reduce the contribution basis with the amount you will actually be refunded.

The exempt amount is a negative amount, and it will reduce the amount of calculated employer's national insurance contributions. Use the same rate that you would use to calculate employer’s national insurance contributions.

How to correct errors

See how to correct errors in the a-melding guidance under the topic Employer's national insurance contributions.

Employer's additional national insurance contributions

You must calculate employer’s additional national insurance contributions when the total salary subject to contributions to an income recipient from a legal entity exceeds the threshold amount of NOK 750,000 in 2023. An employer’s obligation to calculate and report employer’s additional national insurance contributions starts from the time the amount limit is reached (threshold amount).

How is the threshold amount for employer’s additional national insurance contributions affected by the employer advancing benefits and later receiving refunds from NAV?

When advancing sickness benefit and other benefits on behalf of the National Insurance Scheme, you must report this as ordinary salary subject to employer's national insurance contributions. The benefits are included in the calculation of the threshold amount for calculating employer’s additional national insurance contributions.

Do you include the time of advancing the benefit from NAV in your basis when you decide whether to exempt the amount from the employer's national insurance contributions? If so, the advanced benefit amount stated in the contribution basis for refunds from NAV affect the calculation of the threshold amount. This will have a bearing on the calculation of employer’s additional national insurance contributions.

Do you include the time of receiving the refund from NAV in your basis when you decide whether to exempt the amount from the employer's national insurance contributions? If so, the refunded amount stated in the contribution basis for refunds from NAV affect the calculation of the threshold amount. This will have a bearing on the calculation of employer’s additional national insurance contributions.

The threshold amount is calculated for the individual calendar year. Refunds that are included in the calculation of the threshold amount must fall under this year’s salary payments.

When can you claim an exemption from employer’s additional national insurance contributions when advancing benefits from NAV?

Before you can reduce the calculation basis for employer’s additional national insurance contributions by an advanced benefit amount, you must have exceeded the threshold amount for calculating employer’s additional national insurance contributions for the income year. The threshold amount for 2023 is NOK 750,000.

When can you claim an exemption from employer’s additional national insurance contributions when receiving refunds from NAV?

Before you can reduce the calculation basis for employer’s additional national insurance contributions by a refunded amount, you must have exceeded the threshold amount for calculating employer’s additional national insurance contributions for the income year. The threshold amount for 2023 is NOK 750,000.

When you deduct the received refund from the contribution basis, you must take the following into account:

• When reducing the basis for employer’s additional national insurance contributions by a refunded amount, the threshold amount applies when calculating employer’s additional national insurance contributions per income recipient per year.
• The calculation basis for employer’s additional national insurance contributions cannot be a negative amount. When you have received a refund from NAV, you can reduce the basis for calculating employer’s additional national insurance contributions up to zero for the year in which the refund applies.
• If you receive a refund in 2024 for sickness benefit you have advanced in 2023, you can reduce the calculation basis for employer’s additional national insurance contributions in 2024 if you have calculated employer’s additional national insurance contributions for the income recipient in 2023. The reduction in the calculation basis cannot exceed the amount that has actually been included in the calculation basis for employer’s additional national insurance contributions for the income recipient in 2023.
• Refunds for 2022 or earlier are not to be included in the reduction of the threshold amount or the calculation basis for employer’s additional national insurance contributions.

Financial activity tax

The basis for calculating financial activity tax on salary is the same as the contribution basis used to calculate ordinary employer's national insurance contributions. A special calculation basis is not reported in the a-melding.

When advancing and being refunded sickness benefit, etc. you must reduce the calculation basis for financial activity tax accordingly as for ordinary employer's national insurance contributions, but you do not enter the calculation basis in the report in the a-melding.

Reported too low financial activity tax to pay

Have you reported an amount of financial tax to pay that is too low because you have deducted more than you are actually refunded by NAV when advancing the benefit for NAV? If so, you must correct the a-melding for the calendar month in which you deducted the advanced benefit amount.

Reported too high financial activity tax to pay

Have you advanced a benefit from NAV but reported a too high amount of financial activity tax because you deducted less than what you are refunded? If so, you can choose whether you want to correct the a-melding for the month in which you advanced the benefit or whether you want to deduct the difference in the a-melding in the month the benefit was refunded. 

See more information about reporting financial activity tax on salary in the a-melding guidance under the topic financial activity tax.

Bookkeeping and documentation requirements

When you use the exemption for employer's national insurance contributions pursuant to section 23-2, subsection 5, first sentence of the National Insurance Act, you have to provide documentation. This applies both to when you use the exemption when advancing benefits and when you receive refunds from NAV. The obligation to document, keep accounts and specify benefits subject to a duty of disclosure follows from the Bookkeeping Act and the Regulations relating to Bookkeeping. See, for example, section 5, subsection 2, number 2, sections 7 and 10, of the  Bookkeeping Act. For employers that do not have a bookkeeping obligation similar obligations follow from section 5-11-2 of the Tax Payment Regulations.

Additional tax

All errors in the reports constitute a risk of additional tax. If you have used the exemption from employer's national insurance contributions when advancing sickness benefit and the reports do not correspond to the refund from NAV, we generally consider this to be incorrect reporting. In case of an audit, you must be able to provide documentation that you made a reasonable and likely calculation of the exemption from employer's national insurance contributions for advanced sickness benefit for the reports not to be considered incorrect.