Tax on retroactive payments of pension and national insurance benefits
If you’ve received retroactive payment of your pension or national insurance benefits from NAV or private pension/benefit providers, you must pay tax on the retroactive payment in the year the payment is made.
Does this apply to me?
This applies to all who have received a retroactive payment of their pension and national insurance benefits, both from public and private providers.
What you need to know when
- You do not have to inform the Tax Administration about the payment.
- Retroactive payments of pensions and national insurance benefits is included in your tax return in the year the payment was made.
When we calculate tax on the retroactive payment, we can consider if the tax would be less in the year the payment is for than in the year it was actually paid. If this would result in less tax in the year the retroactive payment is for, it will be entered as a tax deduction for the year in which you received the payment.
The tax deduction will be shown in your tax assessment notice as “Correction due to additional pension/social security benefits from previous years”.
If the retroactive payment of your pension and/or national insurance benefits has been entered into your tax return, you do not have to contact us to request a new tax assessment.
Do not delete/remove this amount in your tax return for the payment year nor change your tax returns for previous years.
When we calculate tax on the retroactive payment, we can consider if the tax would be less in the year the payment is for than in the year it was actually paid. If this would result in less tax in the year the retroactive payment is for, it will be entered as a tax deduction for the year in which you received the payment.
The tax deduction will be shown in your tax assessment notice as “Correction due to additional pension/social security benefits from previous years”.
If the retroactive payment is not included in your tax return, you must enter such amounts yourself and submit the tax return.
You can submit documentation with your tax return that specifies the amounts for the individual years, for example, in the form of a decision letter from the provider.
Tax deduction cards and tax deductions
If the deducted tax for the retroactive payment is higher than what is stated on your tax deduction card, this is because the retroactive payment is an addition to other income. To try and avoid that you underpay tax, the provider will deduct accoring to a higer tax percentage.
Please note that a retroactive payment may still lead to underpaid tax as your income in the payment year will be higher than the basis for your tax deduction card.
Rates and key figures
When you receive retroactive payments for a previous year, the provider must deduct tax according to the following rates:
- 44 percent for retroactive payments of benefits from the National Insurance Scheme taxed according to the rules for salary income and for disability benefits from other providers. This applies to, for example, disability benefit, work assessment allowance and sickness benefit.
- For people who are resident in and pay tax to Troms county or Finnmark county, with the exception of residents in the municipalities Balsfjord, Bardu, Dyrøy, Gratangen, Harstad, Ibestad, Kvæfjord, Lavangen, Målselv, Salangen, Senja, Sørreisa, Tjeldsund and Tromsø, the advance tax deduction is 40 percent.
- 32 percent for pensions and the supplementary benefit.
- For people who are resident in and pay tax to Troms county or Finnmark county, with the exception of residents in the municipalities Balsfjord, Bardu, Dyrøy, Gratangen, Harstad, Ibestad, Kvæfjord, Lavangen, Målselv, Salangen, Senja, Sørreisa, Tjeldsund and Tromsø, the advance tax deduction is 28 percent.
- 15 percent for persons subject to withholding tax. This applies to pensions and the supplementary benefit.
- Svalbard tax is deducted at the rate of 13.1 percent for pension benefits and 15.9 percent for disability benefit and benefits that replace employment income.