Tax deduction card for pensioners

Income from employment and pension is not taxed using the same tax rate. When you start taking out your pension, it’s important that you change your tax deduction card.

Remember to include any holiday pay from previous employers when calculating the tax that will be deducted. Holiday pay is always taxable income, even though it’s usually not subject to advance tax deductions. Remember to update your tax deduction card in order to avoid underpaid tax. If the holiday pay is paid out without any tax being deducted, the amount must be entered under the item “Salary not subject to withholding tax” on the tax deduction card application.

How much tax will you pay as a pensioner?

There are many factors to consider before we can tell you how much tax you must pay as a pensioner:

  • How much pension you receive – including pension from NAV, your employer and any private pension schemes
  • How much salary you receive in addition to your pension, if any
  • Your wealth and assets
  • All these factors make it hard for us to give a general answer, but you can calculate your own tax using this calculator.Remember that the calculator does not change your tax deduction card.
  • Before using the calculator, you must know approximately how much pension you’ll receive. You can see your retirment pension (also called “old-age pension”) from NAV at Din pensjon (Your pension - in Norwegian only). If you’re a member of several pension schemes, either privately or through an employer, you must remember to include these in your calculation.

Changing your tax deduction card when moving from salary to pension

We recommend that you change your tax deduction card right before you receive a new type of payment. You should know approximately how much pension you’ll receive. You must also know how much salary you’ll receive up until the point that you start your pension, and how much tax has been deducted by your employer.

How to change your tax deduction card:

  • add the field “Old-age pension from the National Insurance scheme” / “Early retirement pension (AFP) in the public sector”
  • calculate expected old-age pension/AFP for the current year
  • enter the amounts in the fields Old-age pension or Early retirement pension (AFP) in the public sector
  • enter the number of months and retirement percentage of old-age pension, so the tax deduction for recipients of old-age pension can be calculated correctly.

Changing your tax deduction card when moving from disability benefit to pension

To make sure that the tax deduction card is valid form the correct month, you should not change your tax deduction card before you’ve received the last payment of disability benefit. Before you make any changes, you must know approximately how much pension you’ll receive.

How to change your tax deduction card:

  • add the field “Disability benefits before old-age pension”
  • enter the amount received in disability pension in the field “Disability benefits before old-age pension”, not in the field “Disability benefit from the NI scheme”
  • enter the expected old-age pension for the current year
  • enter the number of months and retirement percentage of old-age pension, so the tax deduction for recipients of old-age pension can be calculated correctly.

If you enter the amount received in disability benefit in the field “Disability benefit from the NI scheme”, the tax deduction will not be calculated correctly on your tax deduction card. However, you’ll receive an accurate calculation when the tax assessment is ready.

Working and taking out old-age pension

If you’ll continue receiving salary at the same time as taking out a full or partial retirement pension, you must change your tax deduction card. Old-age pension is taxed at a lower rate than income from employment. 

Both NAV and your employer retrieve your tax deduction card electronically from the Tax Administration. If you have a table-based card, you must make sure that only your main employer, i.e. the one who pays the most (salary or pension), uses the table-based deduction. 

 

If you live in Norway while receiving pension and/or disability benefits from abroad, these payments are taxable in Norway. It’s important that you include this income in your tax deduction card, so that you avoid underpaid tax.

If you receive pension and/or disability benefits from Norway, you must pay tax on this in Norway, even if you’re not a tax resident in Norway. Your pension or disability benefit provider retrieves your tax deduction card electronically and deduct tax for you. You must check that your tax deduction card is correct.

You can read more about withholding tax on pension and disability benefits here