Work allowance for young people
The government has introduced a pilot scheme where some young people can get a deduction on employment income. Here you'll find more information about the pilot scheme and whether the allowance affects you.
About the pilot scheme
The government wants to find out whether lower taxes can make young people choose to work more. Therefore, they're running a pilot scheme with a work allowance for young people.
Approximately 100,000 people born between 1991 and 2006 have been randomly selected to be entitled to the work allowance for the duration of the pilot scheme. The work allowance can reduce tax on employment income for those who have been selected.
Those who have not been selected for the work allowance will pay tax according to ordinary tax rules. No one will have to pay more tax as a result of the work allowance, but some will pay less.
The trial starts in 2026 and is planned to last for five years. Read more about the trial on the Government's website.
Does this apply to me?
Anybody born between 1991 and 2006 is part of the target group for the pilot scheme, but only a number of those were randomly selected to be entitled to the allowance. The work allowance applies from the 2026 income year, and those who've been randomly selected will see this in the tax assessment notice they get in 2027.
From December 15th, those in the target group can log in to find out whether they have been selected or not.
The selection process is finished and there will be no more people selected. The selection is completely random, and if you’ve not been selected now you cannot be selected later. How we conducted the selection.
You do not have to do anything yourself
You do not have to do anything regarding the work allowance. If you've been selected, the allowance is calculated automatically and included in your tax deduction card.
Whether you've been selected or not, you should check your tax deduction card to avoid paying too much or too little tax, and make changes if necessary.
How the work allowance works
If you've been selected and are entitled to the work allowance, you might have to pay less tax.
You must earn between NOK 210,000 and NOK 657,500 to receive the allowance.
If your income is outside this range, you'll not receive any tax deduction.
The maximum reduction is NOK 27,500, which applies if your income is NOK 345,000.
If your income is higher than NOK 345,000, the allowance will become gradually smaller.
Even if you've been selected and are entitled to the allowance, there is no guarantee that you actually have to pay less tax.
It depends on:
You can only get the work allowance on income from work. For the most part, this applies to salary income and business income, but if you're getting parental benefit, sickness benefit, care benefit, or training allowance, these are included.
You cannot get the work allowance on national insurance benefits such as unemployment benefit, disability benefit, or other disability benefits, work assessment allowance, qualification benefit, introductory benefit, transitional benefit for single providers, or pension.
If you have other deductions, for example, interest payments on loans, this will affect your tax assessment. Therefore, this may also affect how much work allowance you can receive.
How deductions and tax are connected
A deduction reduces the part of your income on which you must pay tax. Some deductions are automatic, while others are related to different expenses that you've had during the year.
When calculating the tax you'll have to pay, we start with your salary before tax. We then subtract the deductions you're entitled to, such as interest on loans. The number we're left with is the amount used as the basis for our calculations of how much tax you must pay. This is the amount from which we deduct the work allowance before calculating the tax.
The PAYE (Pay As You Earn) scheme is a tax scheme for foreign workers who are either new to Norway or have several short work stays in Norway.
You cannot claim any deductions if you’re taxed under this scheme. If you’ve been randomly selected to receive the work allowance, it will not have any effect.
You can choose to opt out of the PAYE scheme and instead be taxed according to ordinary tax rules. You must consider what is most profitable for you.
Specific information if you
If you have an exemption card and earn less than NOK 100,000 per year, you will not get any effect from the allowance, even if you have been randomly selected to receive it.
You must earn at least NOK 220,000 per year before the work allowance reduces your tax.
If you think that you're going to earn more than NOK 100,000 per year and have an exemption card, you should instead order a tax deduction card.
There are several types of financial benefits that may be reduced if your income increases. Examples include disability benefits, work assessment allowance, and unemployment benefits. Other financial subsidy schemes may also be affected by an increase in your income, such as housing allowance or financial assistance.
You'll need to check the conditions for your benefit yourself. If you’re unsure how your benefit will be affected by increased work income, you must contact the organisation that pays your benefit. This could, for example, be Nav.
If you’re a student with a loan from the Norwegian State Educational Loan Fund (Lånekassen), part of your loan may be converted into a grant. To qualify, you must meet Lånekassen’s conditions. If your income or wealth is too high, your grant will be reduced.
You’ll find information about the limits for income and wealth on Lånekassen’s website.