Free use of car – standard rule
Concerns the benefit gained through the private use of an employer's car.
Brief information concerning free use of car – standard rule
Specify the benefit an employee gains from having access to a company car for private use.
If the employer owns, rents or leases a car that is made available for private use by the employee, this will constitute a taxable payment in kind.
The benefit linked to the private use of a company car must generally be assessed according to a standard rule. It is not a requirement that the owner is entitled to a deduction for the related costs.
See also free use of car – standard rule
See also:
- Company vehicles – business journeys - kilometre
- Company vehicle – business need – list price
- Free use of car outside the standard rule
- Other free use of car
Occasional private use is not taxable
Private use on fewer than 10 days during an income year and a total private distance travelled of less than 1,000 kilometres per income year is considered to constitute occasional use.
See also the Tax ABC concerning car – private use (in Norwegian only)
The information you must provide
| Amount | NOK x |
| Type of salary or benefit | Payment in kind, car |
| Subject to withholding tax | Yes |
| Basis for employer's national insurance contributions | Yes/No |
| Tax and contribution rules | If relevant |
Additional information: |
|
| List price | NOK x |
| Registration number | The vehicle's registration number |
| Car pool | Yes if relevant |
If the income is earned on foreign continental shelf: |
|
| Continental shelf | Yes/No if relevant |
| Country of earnings | Country code if the benefit was earned abroad |
Amount
Specify the taxable benefit.
The benefit is set to 30 percent of the car’s list price as new up to an amount determined by the Directorate of Taxes, plus 20 percent of the list price above this amount.
See the threshold amount for the individual income year which you should use in the calculation
The basis used to calculate the taxable benefit is normally 100 percent of the car’s list price as new, but:
- In the case of cars more than three years old as of 1 January in the income year, 75 percent of the car’s list price as new must be used as a basis.
- In the case of employees who can substantiate through an electronic vehicle logbook that business travel exceeds 40,000 kilometres during the income year, 75 percent of the car’s list price as new must be used as a basis.
- In cases involving both a car more than three years old as of 1 January of the income year and an employee who can substantiate more than 40,000 km of business travel during the income year, 56.25 percent of the car’s list price as new must used as a basis.
When you have found the reduced list price, you must multiply this by the percentage rates (30 percent/20 percent).
Example application of the standard rule
Maria works for a wholesale company. A car with the registration number AB 12345 is made available to her by her employer. The list price of the vehicle is NOK 660,000. The threshold amount is NOK 351,700 (2024).
| How the company calculates the taxable benefit: | ||
| 30 percent of 351,700 | 105,510 | |
| + | 20 percent of 308,300 | 61,660 |
| = | Total | 167,170 |
| Total benefit per month 167,170/12 | 13,931 | |
| The company specifies this every calendar month in the a-melding: | |
| Amount | 13,931 |
| Type of income | Payment in kind, car |
| Liability for withholding tax | Yes |
| Basis for employer's national insurance contributions | Yes |
| List price | 660,000 |
| Registration number | AB12345 |
Type of salary or benefit
Specify “payment in kind” and “car”.
Subject to withholding tax
The benefit must always be specified as subject to withholding tax.
You don't have to make withholding tax deductions if the amount to be deducted is less than the minimum threshold for withholding tax.
In the case of payments in kind, you must make the deduction from the cash benefits as far as possible. You must notify the tax office via Altinn if the total withholding tax deductions exceed the cash benefits.
Basis for employer's national insurance contributions
You must calculate employer’s national insurance contributions on this benefit.
Exemption:
You don't have to calculate employer’s national insurance contributions when the income recipient:
- is covered by the national insurance legislation of another country in accordance with a convention or the EEA Agreement
- is a foreign employee who is not a member of the Norwegian National Insurance scheme and who works on the Norwegian continental shelf or in Norwegian territorial waters
In some cases, the employee has a confirmation of a membership that is being maintained by their national insurance authority (A1 or another form). The Labour and Welfare Administration’s division for membership and contributions to the Norwegian National Insurance Scheme, NAV Medlemskap og avgift, will consider all documentation, register any exceptions from membership in the National Insurance Scheme and the relevant periods of exception, as well as whether the exception applies to all or parts of the National Insurance Scheme. Registered exceptions from membership in the Norwegian National Insurance Scheme are sendt electronically from NAV to the Tax Administration.
Only exceptions registered with the Tax Administration will allow the employer to omit calculation of employer's national insurance contributions for an employee.
The Tax Administration may assess employer's national insurance contributions if there is no exception registered for the employee, and if the reported salary or benefit is not included in the taxable basis.
The employer or the employee can contact NAV regarding questions about whether an exception from the membership in the National Insurance Scheme is registered.
Tax and contribution rules
If the income recipient fulfils the conditions, you must use the following tax and contribution rules:
This tax and contribution rule concerns:
- seafarers who are entitled to a special deduction (seafarer's allowance) from their salary and other benefits,
- when it is earned through work on-board a vessel in service.
If the income recipient fulfils the relevant conditions, you must specify “special allowance for seafarers” for salary and other benefits.
See also the detailed information concerning the special allowance for seafarers
This tax and contribution rule concerns:
- income recipients who are covered by the Jan Mayen Tax Act.
If the income recipient fulfils the relevant conditions, you must specify “Jan Mayen and the Norwegian dependencies” for salary and other benefits.
You must also specify “Jan Mayen and the Norwegian dependencies” for the associated withholding tax.
See detailed information on withholding tax in the a-melding
Remember also to specify the correct deduction descriptions for Jan Mayen and the Norwegian dependencies regarding trade union fees and premium for pension scheme.
See also the detailed information concerning Jan Mayen and the Norwegian dependencies
This tax and contribution rule concerns:
- income recipients who are covered by the Svalbard Tax Act.
If the income recipient fulfils the relevant conditions, you must specify “Svalbard” for salary and other benefits.
You must also specify "Svalbard" for the associated withholding tax.
See detailed information on withholding tax in the a-melding
Remember also to specify the correct deduction descriptions for Svalbard regarding trade union fees, premium for pension scheme, National Insurance premiums and education and development fund premiums and portacabin rent.
If you submit an a-melding for a tax-free organisation, you can use the following tax and contribution rule:
If you submit an a-melding for a tax-free organisation (tax-free companies, associations and institutions referred to in Section 2-32 first paragraph of the Tax Act), you can specify “tax-free organisation” for the salary or benefit.
If you do this, you won't need to consider whether the income recipient will pass the reporting obligation threshold of NOK 10,000 during the year. The specification must be used from the first krone and for payments throughout the whole year.
See also the detailed information concerning tax-free organisation
Additional information
- List price
Specify the list price of the car as new. The car’s list price as new is set to the main importer’s list price at the time of initial registration of the car, including value added tax and vehicle scrap deposit but excluding transport and registration expenses. The price of any optional extras must be added to the list price.
If the employee stays abroad and the car was not acquired in Norway, then the list price must be set to the original list price as new in the country in which the employee stays (documentation of the list price may be required). - Registration number
State the car's registration number. - Car pool
Specify car pool instead of the registration number if the car is part of a car pool scheme. This means that, because of the constantly changing use of the employer’s car pool, no specific time period can be determined for the employee’s private use of a particular car. - Continental shelf
Specify yes or no under "earned on continental shelf” if the benefit was earned abroad.
You can not combine "earned on continental shelf" with tax and contribution rule Svalbard. - Country of earnings
Specify the country code for the country of earnings if the benefit was earned abroad.
Earnings period (voluntary)
You can specify the earnings period for all types of salary and other benefits in the a-melding. Both the start date and the end date of the earnings period must fall within the same reporting month.
See also the explanatory information concerning the earnings period
When to report
Specify the taxable benefit in each calendar month in which the car was available.
If the employer changes a car during a calendar month, the taxable benefit for the calendar month must be calculated on the basis of the list price of the vehicle that is available to him at the time the deduction calculation is normally performed (salary payment) during this month.
Correcting errors
| MAGNET_EDAG-114 Invalid value |
| MAGNET_EDAG-114B Invalid value for this calendar month |
| MAGNET_EDAG-200 This income has been reported with incorrect information and is invalid |
| MAGNET_EDAG-230B Invalid value |
| MAGNET_EDAG-243 Information on earnings period is invalid |
| MAGNET_EDAG-298 This income has been reported with incorrect information and is invalid |
What do we use the information for
NAV uses information concerning salary and other benefits to calculate unemployment benefits and to check benefits such as sickness benefit, parental benefit, disability benefit and advance child maintenance payments.
The Norwegian Tax Administration uses information concerning free use of car to pre-complete the tax return and for control purposes.
Statistics Norway (SSB) uses the information for statistical purposes.
Applicable regulations
These regulations are only available in Norwegian.
