For pensions of up to NOK 246,800, you can get a maximum tax deduction of NOK 32,825. 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 246,800 and lapses altogether if the pension amounts to NOK 567,660 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 retirement 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 contractual 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 a retirement pension from the National Insurance Scheme or AFP during the income year?

In the income year during which you begin to draw retirement 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If, during the income year, you've received a disability pension that has been replaced by retirement pension from the National Insurance Scheme on reaching 67 years of age and you have not previously drawn benefits that give entitlement to a tax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 retirement 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 retirement  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 a retirement pension of NOK 210,000

The maximum tax deduction for retirement pension/AFP is NOK 32,825 when the retirement pension is fully drawn for the whole year and when the retirement pension/AFP does not exceed NOK 246,800.

Eva Hansen draws 100 percent of her retirement pension and is a pensioner for the whole year. Her pension income is NOK 210,000. She has no other income.

Eva Hansen's tax before the tax deduction is NOK 21,117. Because she cannot be granted a higher tax deduction than the total of income tax and national insurance contributions, her tax deduction is NOK 21,117. She therefore pays no tax.

Pensioner with a retirement pension of NOK 230,000 and NOK 20,000 in interest income

Arne Hansen draws 100 percent of his retirement pension and is a pensioner for the whole year. His pension income is NOK 230,000. He has NOK 20,000 in income interest.

The pension income is less than NOK 246,8000. He can therefore receive the maximum tax deduction if the tax on the pension and interest income amounts to NOK 32,825 or more.

Arne Hansen's tax before the tax deduction is NOK 30,782. The maximum tax deduction is NOK 30,782. Arne Hansen's tax is NOK 0.

The tax deduction amount

The maximum tax deduction for the income year is NOK 32,825.

The tax deduction amount is reduced according to the proportion of retirement 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 246,800 and lapses altogether if the pension amounts to NOK 567,660 or more.

Retirement percentage

Retirement 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 retirement pension from the National Insurance Scheme or from an AFP scheme for the entire year and the pension exceeds NOK 246,800, the tax deduction will be reduced by:

• 16.7 percent of the total pension income in excess of NOK 246,800 up to and including NOK 373,650
• 6.0 percent of the total pension income which exceeds NOK 373,650

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 a retirement pension of NOK 270,000:

Bente Hansen draws 100 percent of her retirement pension and is a pensioner for the whole year. Her pension amounts to NOK 270,000.

The deduction is reduced as follows:

Maximum tax deduction (for pension income up to NOK 246,800)	NOK 32,825
- reduced with (270,000 – 246,800) x 16.7%	NOK   3,874
= Bente Hansen tax deduction	NOK 28,951
Bente Hansen’s tax before tax deduction	NOK  37,902
- tax deduction	NOK  28,951
= Bente Hansen’s tax	NOK 8,951

 

Example of reduction of the tax deduction for a pensioner with a retirement pension of NOK 480,000:

Peder Hansen draws 100 percent of his retirement pension and is a pensioner for the whole year. His pension amounts to NOK 480,000. The pension income exceeds NOK 373,650 and the tax deduction is therefore reduced in two stages.

The tax deduction for Peder Hansen is calculated as follows:

Maximum tax deduction	NOK 32,825
- reduced with (373,650 –246,800 ) x 16.7%	NOK  21,184
- reduced with (480,000 - 373,650) x 6 %	NOK  6,381
= Peder Hansen's tax deduction	NOK   5,260
Peder Hansen's tax before tax deduction	NOK 103,002
- the tax deduction	NOK     5,260
= Peder Hansen's tax	NOK 97,742

 

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

Peder Olsen has drawn a 50 percent retirement pension from 1 January 2023 and is continuing to work. His retirement pension is NOK 130,000 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 16,413.

In addition, the tax deduction is reduced by 16.7 percent of the pension income between NOK 246,800 and NOK 373,650. These thresholds are reduced by the same percentage as the pension he draws.

If Peder Olsen draws 50 percent retirement pension, the tax deduction is reduced once his retirement pension exceeds 50 percent of NOK 246,800 = NOK 123,400.

The deduction is reduced as follows:

Maximum tax deduction	NOK  16,413
- reduced with (130 000 - 123,400)x 16.7%	NOK    1 103
= Peder Olsen's tax deduction is	NOK 15,310
Peder Olsen's tax before tax deduction	NOK  36,797
- the tax deduction	NOK  15,310
= Peder Olsen's tax	NOK 21,487

 

Tax deduction calculation for a retirement pensioner who has drawn 50 percent of her pension from 1 July 2023 and who receives a salary

Erna Olsen has drawn a 50 percent retirement pension from 1 July 2023. Her pension is NOK 80,000 and the salary is NOK 210,000. Since Erna Olsen only draws a 50 percent pension, the maximum tax deduction of NOK 32,825 needs to be reduced by 50 percent. The maximum tax deduction for Erna Olsen is then NOK 16,413.

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 16,413, i.e. NOK 8,206.

In addition, the tax deduction is reduced by 16.7 percent of the pension income between NOK 246,800 and NOK 373,650. 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 retirement pension exceeds 50 percent of NOK 246,800 = NOK 123,400. 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 123,400 x 6/12 = 61,700. The threshold is therefore NOK 61,700.

The deduction is reduced as follows:

Maximum tax deduction (50 % pension for half a year )	NOK   8,206
- reduced by (80,000 - 61,700) x 16.7 %	NOK   3,056
= Erna Olsen's tax deduction is	NOK  5,150
Erna Olsen's tax before tax deduction	NOK 39,907
- the tax deduction	NOK   5,150
= Erna Olsen's tax	NOK 34,757

 

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