For pensions of up to NOK 210,950, you can get a maximum tax deduction of NOK 33,400. You cannot be granted a tax deduction that is higher than the sum of your income tax and national insurance contributions. The deduction is reduced for pensions above NOK 210,950 and lapses altogether if the pension amounts to NOK 576,717 or more. If you draw less than a full pension or draw a pension for only part of the year, the tax deduction and income thresholds will be reduced.

Who is entitled to a tax deduction?

• Recipients of old-age pension from the National Insurance Scheme.
• Recipients of AFP in the public sector.
• Recipients of corresponding pensions from EU/EEA countries. 'Corresponding pension' means a pension from general, mandatory pension schemes that include all inhabitants of the country in question.
• Recipients of supplementary benefits for persons who have only lived in Norway for a short period.

If you only receive other pension benefits, such as seamen's pension or a pension under the guaranteed early retirement scheme from the Norwegian Public Service Pension Fund, you’ll not be entitled to the tax deduction. If you only receive a pension from a country outside the EEA, you are not entitled to a tax deduction.

New AFP in the private sector does not entail a right to tax deduction for pension income on an independent basis.

Calculating the tax deduction

The basis for calculating the tax deduction is total pension income. As a rule, the following benefits are included in total pension income:

• taxable employment-related and non-employment-related pension, including pensions from abroad that are taxable in Norway
• pensions from abroad that are not taxable in Norway
• benefits derived from surrendered property
• annuity that is part of an employment-related pension scheme
• disability benefit from the National Insurance Scheme and disability benefits from other schemes
• support under the Act relating to supplementary benefits for persons who have lived in Norway for a short period

Have you started drawing an old-age pension from the National Insurance Scheme or AFP during the income year?

In the income year during which you begin to draw old-age pension from the National Insurance Scheme or AFP, pension income received prior to the date on which the pension began to be drawn will not be included in the total pension income.

If, during the income year, you've received a disability pension that has been replaced by old-age pension from the National Insurance Scheme on reaching 67 years of age and you have not previously drawn benefits that give entitlement to a tax deduction, the disability pension and any other pension income received prior to the transition to the old-age pension from the National Insurance Scheme will not be included in your total pension income in the transition year.

Tax-free benefits that are not included in total pension income:

• compensation supplements for new AFP in the private sector
• supplementary benefit for spouses from the National Insurance Scheme that is paid to recipients of old-age pensions and AFP when the effective date for the supplementary benefit is before 1 January 2011
• tax-free pension for the month of death

If you only have a minimum pension, the deduction ensures that you do not pay tax on the pension.

Examples of tax deduction calculations:

Pensioner with an old-age pension of NOK 150,000

The maximum tax deduction for old-age pension/AFP is NOK 33,400 when the old-age pension is fully drawn for the whole year and when the old-age pension/AFP does not exceed NOK 210,950.

Eva Hansen draws 100 percent of her old-age pension and is a pensioner for the whole year. Her pension income is NOK 150,000. She has no other income.

Eva Hansen's tax before the tax deduction is NOK 14,635. Because she cannot be granted a higher tax deduction than the total of income tax and national insurance contributions, her tax deduction is NOK 14,635. She therefore pays no tax.

Pensioner with an old-age pension of NOK 200,000 and NOK 20,000 in interest income

Arne Hansen draws 100 percent of his old-age pension and is a pensioner for the whole year. His pension income is NOK 200,000. He has NOK 20,000 in income interest.

The pension income is less than NOK 210,950. He can therefore receive the maximum tax deduction if the tax on the pension and interest income amounts to NOK 33,400 or more.

Arne Hansen's tax before the tax deduction is NOK 28,349. The maximum tax deduction is NOK 28,349. Arne Hansen's tax is NOK 0.

The tax deduction amount

The maximum tax deduction for the income year is NOK 33,400.

The tax deduction amount is reduced according to the proportion of old-age pension from the National Insurance Scheme that you draw (retirement percentage). If the retirement percentage is 40 percent, the tax deduction will be 40 percent of the maximum deduction (see below the section on retirement percentages).

For example, if you receive 35 percent of a full AFP in the public sector, the tax deduction will be 35 percent of the maximum deduction.

The tax deduction amount will be calculated according to the number of months that you have received a pension. If you have received a pension for 8 months, you’ll be granted a tax deduction for 8 of the 12 months of the year.
The tax deduction is reduced for pensions above NOK 210,950 and lapses altogether if the pension amounts to NOK 576,717 or more.

Retirement percentage

Old-age pension from the National Insurance Scheme can be drawn at any time you decide once you are 62 years old. In addition to choosing when, you can also choose how much of the pension you want to draw at any time. The lowest pension level is 20 percent, increasing in steps to 40, 50, 60, 80 or 100 percent. If you change your retirement percentage during the income year, a weighted average for the year will be calculated. For example, if you draw 50 percent pension in the first six months of the year, and 100 percent pension in the last six months, the weighted average for the income year will be 75 percent.

Gradual reduction of the tax deduction

If you draw a full old-age pension from the National Insurance Scheme or from an AFP scheme for the entire year and the pension exceeds NOK 210,950, the tax deduction will be reduced by:

16.7 percent of the total pension income in excess of NOK 210,950 up to and including NOK 318,000. 6.0 percent of the total pension income which exceeds NOK 318,000.

You receive no tax deduction if your total pension income is NOK 576,717 or more. If you draw a partial pension and/or only receive a pension for part of the income year, the maximum tax deduction and the thresholds will be reduced in proportion to the retirement percentage and/or number of months of pension.

Example of reduction of the tax deduction for a pensioner with an old-age pension of NOK 240,000:

Bente Hansen draws 100 percent of her old-age pension and is a pensioner for the whole year. Her pension amounts to NOK 240,000.

The deduction is reduced as follows:

Maximum tax deduction (for pension income up to NOK 210,950)	NOK 33,400
- reduced with (240,000 – 210,950) x 16.7%	NOK   4,851
= Bente Hansen tax deduction	NOK 28,549
Bente Hansen’s tax before tax deduction	NOK  33,093
- tax deduction	NOK  28,549
= Bente Hansen’s tax	NOK 4,544

 

Example of reduction of the tax deduction for a pensioner with an old-age pension of NOK 480,000:

Peder Hansen draws 100 percent of his old-age pension and is a pensioner for the whole year. His pension amounts to NOK 480,000. The pension income exceeds NOK 318,000 and the tax deduction is therefore reduced in two stages.

The tax deduction for Peder Hansen is calculated as follows:

Maximum tax deduction	NOK 33,400
- reduced with (318,000 –210,950 ) x 16.7%	NOK  17,877
- reduced with (480,000 - 318,000) x 6 %	NOK  9,720
= Peder Hansen's tax deduction	NOK   5,803
Peder Hansen's tax before tax deduction	NOK 107,091
- the tax deduction	NOK     5,803
= Peder Hansen's tax	NOK 101,288

 

Tax deduction calculation for an old-age pensioner who has drawn 50 percent of his pension for the entire year and who receives a salary

Peder Olsen (69 years old in 2022) has drawn a 50 percent old-age pension from 1 January 2022 and is continuing to work. His old-age pension is NOK 110,000 and his salary is NOK 150,000.

Since Peder Olsen draws only 50 percent of his pension, the maximum tax deduction is reduced by 50 percent to NOK 16,700.

In addition, the tax deduction is reduced by 16.7 percent of the pension income between NOK 210,950 and NOK 318,000. These thresholds are reduced by the same percentage as the pension he draws.

If Peder Olsen draws 50 percent old-age pension, the tax deduction is reduced once his old-age pension exceeds 50 percent of NOK 210,950 = NOK 105,475.

The deduction is reduced as follows:

Maximum tax deduction (for 50 % pension 105,475 kroner)	NOK  16,700
- reduced with (110 000 - 105,475)x 16.7%	NOK      756
= Peder Olsen's tax deduction is	NOK 15,944
Peder Olsen's tax before tax deduction	NOK  34,640
- the tax deduction	NOK  15,944
= Peder Olsen's tax	NOK 18,696

 

Tax deduction calculation for an old-age pensioner who has drawn 50 percent of her pension from 1 July 2022 and who receives a salary

Erna Olsen has drawn a 50 percent old-age pension from 1 July 2022. Her pension is NOK 60,000 and the salary is NOK 210,000. Since Erna Olsen only draws a 50 percent pension, the maximum tax deduction of NOK 33,400 needs to be reduced by 50 percent. The maximum tax deduction for Erna Olsen is then NOK 16,700.

She only receives a tax deduction for the months that she draws a pension. Since she only drew her pension from 1 July, her maximum tax deduction is 6/12ths of NOK 16,700, i.e. NOK 8,350.

In addition, the tax deduction is reduced by 16.7 percent of the pension income between NOK 210,950 and NOK 318,000. These thresholds are reduced by the same percentage as the pension she draws.

Since Erna Olsen only draws a 50 percent pension, the tax deduction is reduced by 16.7 percent of 50 percent of the pension income. For Erna Olsen, the tax deduction is therefore reduced once the old-age pension exceeds 50 percent of NOK 210,950 = NOK 105,475. Because she has only drawn a pension for half the year, the threshold for the pension income is also reduced by 6/12th, i.e. NOK 105,475 x 6/12 = 52,737. The threshold is therefore NOK 55,513.

The deduction is reduced as follows:

Maximum tax deduction (for 50 % pension for half a year )	NOK   8,350
- reduced by (60,000 - 52,737) x 16.7 %	NOK   1,213
= Erna Olsen's tax deduction is	NOK  7,137
Erna Olsen's tax before tax deduction	NOK 37,568
- the tax deduction	NOK   7,137
= Erna Olsen's tax	NOK 30,431

 

Feel free to use our tax calculator to calculate your taxes and tax deductions.