What is a tax deduction card?
All who works in Norway must have a tax deduction card.
A tax deduction card is an electronic document that shows how much tax your employer must deduct before they pay your salary. The amount that your employer deducts is known as a ‘tax deduction’, ‘withholding tax’ or "advance tax payment".
You`ll be notified which tax deduction card you`ve been issued in a tax deduction notice. You do not have to submit this to your employer. Your employer will retrieve your tax deduction card from the Norwegian Tax Administration electronically by using your Norwegian identification number.
If you're an online user, you`ll be informed by e-mail/SMS when your employer retrieves your tax deduction card.
Tax deduction cards apply for one income year (a calendar year).
For example: If you work in Norway from 1 November 2018 to 30 March 2019, you'll first receive a tax deduction card for the months of November and December 2018, followed by a new tax deduction card for the months of January, February and March 2019. If you have not received a new tax deduction notice by 20 January, you should apply for a new tax deduction card.
How is the tax deduction card structured?
Most new foreign workers are subject to a simplified tax scheme known as PAYE (Pay As You Earn). The tax scheme means that you`re taxed at a fixed percentage, which your employer deducts from each salary payment.
You can choose to be taxed in accordance with the ordinary rules instead of the PAYE scheme. You can select your preferred scheme when you apply for a tax card or later in the income year by applying for a new tax card. Once you've selected a scheme, the decision cannot be changed.
Your employer uses the specified percentage to calculate your tax deduction. A percentage card shows which percentage to deduct. If you fall under the PAYE scheme, this is the final tax deduction.
For those who do not fall under the scheme, tax is deducted at the same percentage even if your income changes. That means that if you earn more than the basis used to calculate your tax deduction card, too little tax will be deducted. If you earn less, too much tax will be deducted (you'll get a tax refund). If you paid too little tax, you must pay what you owe (underpaid tax).
A table-based card specifies the table your employer will use to deduct your tax (called table-based deductions). The card also shows what percentage rate your employer will use to deduct advance tax where the table does not apply (called percentage deduction). Only your main employer should deduct tax using the table (the one who pays you the most). It cannot be used by more than one employer for the same period. Other employers must use the percentage part of your tax deduction card. Otherwise, you may be deducted to little tax and have to pay this back.
With table-based cards, increasingly more tax is deducted the higher your income is. There are several table codes, and these vary according to the amount of capital income and deductions entered. The size of your salary or pension does not affect the table number as long as all payments are made from the same employer. That means that as long as you have a table-based card and the same employment or pension circumstances, you`ll keep the same table number even if your salary/pension changes, as long as your other income/deductions are the same.
When you have more than one employer
Those who fall under the PAYE scheme are deducted a fixed percentage by both their main employer and their other employers.
If you have a table-based card and several employers, pension providers or similar, you should make them aware of whether they're your main employer (the one who pays you the most) or not. In this context, NAV is considered an employer.
I want to deduct more than is shown on the tax deduction card
You do not have to get a new tax deduction card if you want to deduct more tax than what is specified by your tax deduction card. Contact your employer/payroll office or NAV/your pension provider and ask them to deduct more tax.