When can the employer pay daily subsistence allowance tax-free

The employer can pay a subsistence allowance without deducting tax when the following conditions are met:

• The subsistence allowance is paid in accordance with provisions in a collective agreement or government regulations (special agreement).
• In principle, you as an employee must incur added costs/extra expenses on food for the business travel. The decisive factor is not the actual amount of extra expenses on food that you incur, but whether you usually incur the extra expenses for this type of travel. You need to assess which travels are business travels in accordance with the defined term ‘job-related travel’ (yrkesreise). There is more information about the tax-law aspects of business travel in this announcement(in Norwegian). You can find out more about what an added cost is on this page under “What is an added cost?”.
• The subsistence allowance must not exceed the Directorate of Taxes’ allowance rates.

If one or more meals are covered by an employer, client, organiser or host, the employer shall perform a meal deduction based on the daily rate for board with an overnight stay:

Meal deduction	Domestic travel	Foreign travel
Breakfast	20%	20%
Lunch	30%	30%
Dinner	50%	50%

Example:

Ola has his board (food) covered at the government rates when he is travelling on business. Ola goes to Stavanger for a course. He does not spend the night there, but the trip lasts for 13 hours. Lunch is covered by the employer as part of the course fee.

Rate according to the government rates (as at February 2024)	NOK 686
- Meal deduction for gross board allowance for lunch (30% of NOK 686)	NOK 206
= Subsistence allowance according to the government rates	NOK 480

The meal deduction is calculated using the government rates for travel expenses with a current day rate of NOK 686. This rate applies to overnight stays as well as day trips.

The Directorate of Taxes’ advance rate for 2024 is NOK 400. This rate is for subsistence allowances not subject to withholding tax on business travels that lasts 12 hours or more, but with no overnight stay. This means that the meal deduction in this example is NOK 120 (30% of NOK 400). The subsistence allowance not subject to withholding tax according to the advance rates will therefore amount to NOK 280 (NOK 400 – NOK 120).

The difference between the allowance according to the government rates for travel expenses and the allowance according to the Directorate of Taxes’ rates amounts to the allowance subject to withholding tax for work travels. In this case, it will amount to NOK 200 (NOK 480 – NOK 280).

NOK 280 of Ola's covered board allowance is not subject to tax or withholding tax, which leaves NOK 200 that is subject to tax and withholding tax.

You must submit a travel expense claim.

As a minimum, the travel expense claim must include:

• your name, address and signature
• date and time of departure and return for each business trip or official journey
• purpose of the journey
• which event you participated in

What is an added cost?

Even if you have expenses on food for business travel, this does not automatically entitle you to tax-free cost coverage from your employer. An added cost means that you have incurred extra expenses for food during a specific trip.

The decisive factor for tax-free coverage is not the actual amount of extra expenses on food that you incur, but whether you usually incur the extra expenses for this type of travel. It's natural to base this assessment on your work situation and assess whether the trip is part of your normal work situation or not. Where the work necessitates regular travel, costs for food on the trips will normally be comparable with canteen, grocery shop or similar expenses as incurred by employees who do not take business trips. You're not entitled to tax-free coverage for such trips. Regular travel refers to those cases where you travel as a natural part of your work, because you do not have a fixed place of work, e.g. as a tradesperson or sales representative.

If you normally work at one location (a fixed place of work), but you travel to client meetings, courses etc., you'll normally be in an added-cost situation on such trips. You're not able to plan your day and meals to the same extent as for an ordinary working day. A specific assessment is made of where the boundary lies for what is considered your normal work situation.