Employer with workers in the PAYE scheme
The PAYE (Pay As You Earn) scheme is a voluntary tax scheme for foreign workers who have short work stays in Norway. Most foreign workers who are new in Norway will automatically become part of the PAYE scheme when they apply for a tax deduction card.
You’ll be informed that the worker is in the PAYE scheme when you retrieve their tax deduction card. The tax deduction card is marked with the additional information "Kildeskatt på lønn (PAYE)". It’s important to check if the worker’s tax deduction card has this additional information before you report salary and deducted tax.
What you need to do
When you have a worker in the PAYE scheme, you must:
- assess the worker's tax basis and calculate the tax
- deduct tax at a fixed percentage rate all months of the year
- report both salary and deducted tax in the a-melding
You must calculate PAYE tax on all salary and all remunerations that are taxable for the worker.
See the guide to the a-melding for how to report PAYE tax
You’re responsible for determining the correct basis for tax, and for deducting the right amount of tax.
You must correct it if you've reported incorrectly
If you’ve reported incorrectly, you must correct the a-melding.
If you do not fulfil your obligations, you may become responsible for the tax deductions.
How to calculate PAYE tax
The PAYE scheme differs from the ordinary tax scheme in several ways:
- You must deduct PAYE tax from all the expenses you cover for commuters.
- There are no months in which you do not deduct tax, nor do you reduce the tax deduction before Christmas.
- You do not reduce the deduction basis based on pension contributions and trade union fees.
Here you’ll find an overview of what you must calculate PAYE tax on, and what is not taxable for workers in the PAYE scheme.
Include the following in the basis for PAYE tax:
- All salary and remunerations for work performed in Norway (including holiday pay).
- Fees, remunerations or similar benefits to foreign chairpersons of the board or foreign board members in Norwegian companies.
- All commuter expenses you cover for the worker.
- Expense allowances, refunds and payments in kind that are considered taxable benefits for the worker.
- All private expenses you cover for the worker.
Do not include the following in the basis for PAYE tax:
- Salary and remunerations for work performed abroad.
- Expenses you cover that are directly related to the work (unless they result in a surplus).
Tax rates and employer's national insurance contributions
You can find information about which rate to use in the worker’s tax deduction card. The tax rate may also affect whether you should calculate employer’s national insurance contributions on salary and other benefits.
|
Tax rates 2025 |
Employer's national insurance contributions |
| 25% for workers who are members of the Norwegian National Insurance Scheme |
The employer must pay employer's national insurance contributions according to the general rules. |
|
17.3% for workers who are not members of the Norwegian National Insurance Scheme |
The employer does not have to pay employer's national insurance contributions. |
|
22.4% for workers who are only members of the healthcare portion of the Norwegian National Insurance Scheme |
For workers sent to Norway from the United States or Canada, the employer must pay employer's national insurance contributions according to a special rate. For other workers, the employer must pay employer's national insurance contributions according to the general rules. |
Specific information if
If you have a net salary arrangement, you must pay tax for the worker. This means that you must convert the net pay to gross salary by using the tax rate in the tax deduction card and enter table number "0000" in the field for the grossing-up table when you report the information in the a-melding.
The worker can opt out of the PAYE scheme and pay tax under the general tax rules. They must opt out of the scheme themselves.
If you as an employer apply for a tax deduction card online via RF-1355, you cannot opt out of the scheme on behalf of your worker. Then the worker can opt out during their appointment at the Tax Administration for ID check.