How to deduct the correct amount of tax

As an employer you are obliged to obtain tax deduction cards and deduct correct amound of tax for your employees. Your must also enter your employees in the Register of Employers and Employeesnotify.

You can proceed to the section of the guide that is most relevant to you.

As an employer, you obtain the tax deduction cards for your employees.

Read more about the different types of tax deduction cards and how you as an employer use them.

Before you as an employer retrieve a tax deduction card and deduct tax, you need to check that the salary is higher than the minimum amount.

See the list of minimum amounts below. You do not need to retrieve tax deduction cards to pay out holiday pay for last year.

Employment:

Amounts that are not taxable:

Period:

Ordinary employers 

Total withholding tax of up to NOK 100 

Per calendar month

Ordinary employers

Total benefits subject to withholding tax of up to NOK 500

Per calendar month

Tax-free companies, associations and institutions 

Salary payments of up to NOK 10,000

Per income year

Personal employers

Salary payments of up to NOK 6,000 

Per income year 

You will find more information about the threshold amounts here.

How to calculate the basis for withholding tax.

In order to retrieve electronic tax deduction cards, you need a list of your employees and their national identity numbers and/or D numbers.

NB: You must remember to remove national identity numbers and/or D numbers of employees who no longer work for you.

As an employer, you're responsible for retrieving tax deduction cards for all your employees at the start of a new income year.

You must retrieve the tax deduction cards before the first payroll run. If you get new hires during the year, you must retrieve their tax deduction cards before the first payroll run for the new employees.

You can retrieve electronic tax deduction cards in two ways:

How to retrieve an exemption card

Exemption cards are retrieved in the same way as ordinary tax deduction cards. The employee must have ordered an exemption card for you to retrieve it. The exemption card contains all or part of the tax-free amount.

If this amount is 0, the employee must allocate an amount to you. This can happen if another employer has retrieved the exemption card before you.

You'll be notified of changes when the tax deduction card or the exemption card is ready to be retrieved.

Read more about different types of tax deduction cards and how you retrieve tax deduction cards for your employees.

Accesses in Altinn

You will need the role: Reporter/sender 

If you're still missing a tax deduction card before the first payroll run of the year, you can use the employee's tax deduction card from the previous year to deduct tax from salary payments in January.

If you're missing a tax deduction card for salary payments for the rest of the year, you must deduct 50 percent tax on the salary and 30 percent on pension and other national insurance payments until the employee has ordered a tax deduction card.

Inform the employee

Inform the employee that you will deduct 50 percent tax and ask them to order a tax deduction card/exemption card. In these cases, exemption from deduction for one month during the summer or for half a month before Christmas does not apply.

Foreign employees who are staying and working in Norway for short periods are assigned D numbers.

Since their stay is temporary, they'll only receive a tax deduction card for the current year. As their employer, you can apply for tax deduction cards for your foreign employees.

When a taxpayer has been issued a tax deduction card, you'll be notified if you've previously attempted to retrieve it.

Tax deduction cards for foreign workers in Norway.

You'll only receive the information you need to deduct the correct amount of withholding tax. Generally, this concerns information about the table and tax rate.

You're responsible for deducting tax in accordance with the most recent tax deduction card applicable to the employee.

The main employer must use the table to calculate the tax deduction. Use the percentage deduction stated on the tax deduction card if you're a secondary employer or for benefits that apply to a period other than the salary payment period.

NOTE: If you're unsure whether you're the main or secondary employer, you must clarify this with the employee.

If you take on new hires during the year, you should make it part of your hiring process to clarify whether you're their main or secondary employer.

If you do not know whether you're the main or secondary employer, you must deduct in accordance with a percentage rate. See section 5-1-4 (3) of the Tax Payment Regulation.

Tax deductions of old-age pension

For the payment of old-age pensions or other benefits with low national insurance contributions, you must use the monthly tables for pensions. For deduction periods other than monthly, the table is used pro rata.

Table-based deductions

The rules for calculating table-based deductions for different periods are set out in section 5-10-2 of the Tax Payment Regulations.

Exemption card

If the employee has an exemption card, the exemption from deductions concerns all salary subject to withholding tax as well as any payments in kind paid to the employee up to the set amount of NOK 55,000 (2018).

Extra tax deductions

If the employee, in due time before deductions are made, requires a higher deduction than the tax deduction card specifies, you're obliged to deduct tax in accordance with the employee’s request.

You'll receive a message from the Tax Administration if one of your employees changes their tax deduction card during the year.

You must retrieve new tax deduction cards before your next payroll run. You retrieve the new tax deduction card using the same service as you used to order the tax deduction cards:

If you retrieve tax deduction cards from a payroll system, you can turn off the notification function. Ask your payroll system supplier for advice.

Your employees can also request that you deduct more tax than the tax card specifies.

You should enter this as a supplementary deduction, and not correct the percentage/table.

As an employer, you're obliged to make tax deductions from salary payments made to your employees. There are two types of deductions from employees’ salary payments:

After you've calculated the withholding tax, you must reduce the gross salary by the withholding tax and pay the net salary to the employee. You must do this no later than by the date on which the employee becomes entitled to receive their salary, e.g. on the agreed payday.

When an employee receives payments in kind, you must deduct withholding tax insofar as the cash benefits permit. You must notify the tax office immediately if the salary payment is not sufficient to deduct tax for payments in kind.

As an employer, you're obliged to have a separate bank account called a “tax deduction account”.

You can only use the tax deduction account for deposits of withholding tax and any attachment of earnings requested by the tax collector.

Deposit withholding tax in the tax deduction account no later than by the first working day after payday. As an alternative to ongoing deposits, you can keep the balance in the tax deduction account sufficiently high to ensure that it covers the ongoing deduction liability, e.g. by paying in regular instalments.

Employers that are entitled to carry on financing activity under the Financing Activity Act, such as banks, can be provided with a guarantee for the amount.

The tax deduction belongs to the tax authorities.

Without the consent of the tax collector, you can only use the funds in the tax deduction account to make transfers to the tax collector or transfer the funds to another tax deduction account with another bank.

For every salary payment, you must provide your employees with a receipt of withholding tax and attachment of earnings. The receipt can be the employee's payslip.

In December of each year, each employee is sent a list of which employers have retrieved their tax deduction cards over the year.

In January each year, you as an employer must provide your employees with a summary of income, allowances and deductions for the previous year.

You're only permitted to retrieve tax deduction cards for persons you're going to make taxable payments to.

Using the "My employers" service, employees can see updated information about which employers have retrieved their tax deduction cards electronically.

The employees can use the service "My income and employment" to see what you, as their employer, have reported on their behalf.

You're only permitted to retrieve tax deduction cards for persons you're going to make taxable payments to.

You must know the national identity number or D number of the employee.

The Tax Administration informs all employees of which employers have retrieved their tax deduction cards.

The processing of personal data shown on the electronic tax deduction card is regulated by sections 8 and 11 of the Norwegian Personal Data Act. Conditions for processing personal data are set out in section 8. Requirements for processing personal data are set out in section 11.

Retrieving tax deduction cards is therefore contingent on the data being processed in compliance with the Personal Data Act. This means, among other things, that if a tax deduction card has been retrieved, but it is not relevant to make a taxable payment, the data must be deleted; see section 11, item e; with reference to section 28.

This obligation ceased to apply when the electronic tax deduction card scheme was introduced.

Section 5-1-11 of the Tax Payment Regulation concerning employers' processing of tax deduction cards, including the obligation to retain tax deduction cards, has been rescinded.

Invalid or missing attachments:

“The submitted file does not comply with the Tax Administration's specifications”. If you receive this message, the formatting in the file may be incorrect. Contact your payroll system supplier.

Incorrect national identity number/incorrect organisation number:

The national identity number or organisation number in the file is invalid. Please submit a new request with correct identification of employee / employer.

The general rule is that employees will not receive refunds for excess deductions of withholding tax before the tax assessment. However, withholding tax can be corrected via the a-ordning scheme if the error is discovered before the due date.

You can correct the withholding tax in the same income year as soon as you retrieve the new tax deduction card if the following applies:

  • You deducted withholding tax in accordance with an old tax deduction card before you had access to the new one.
  • You deducted tax at the rate of 50 percent because you did not have access to the employee’s tax deduction card at all.