How does the half-tax regime work in Norway?

Article author
Mika
  • Updated

It is relatively straightforward to calculate a rough estimate of the annual tax liability in Norway. Tax authorities levy higher taxes on employees for 10.5 months to allow for a form of tax deduction during the holiday pay distribution month in the summer and the Christmas holiday season.

Employees pay half the normal monthly tax in December and zero tax in June.

This means in November, employees with a monthly salary and pension get half the tax calculated on their salary payment. (The payment is not taxed, so typically you'll receive a higher monthly payment in June. Please visit “How holiday pay (feriepenger) works in Norway” to read more about holiday pay.)

The common misconception is that the salary in November or June is tax-free

The system of half and zero tax is a result of how the tax deduction is distributed throughout the year; slightly more tax is deducted in other months in order to be able to deduct less tax in November. The state is encouraging employees to save money so that they have more money in July to pay for summer holidays for the whole family, and in December to pay for Christmas presents.

What can be included in the exemption from withholding tax?

This ”half tax” applies to employees with a fixed salary, hourly pay, piecework, or commission system.

  • Ordinary salary
  • Supplements/ fixed allowances that are normally paid together with ordinary salary, even if the benefits are fully or partially earned in a different period of time: e.g. payment of overtime pay, piece rate surplus, and commission
  • Benefits in kind such as EKOM, insurance, free car
  • Other benefits that have been earned over longer periods, such as bonuses and payment of accrued overtime hours/plus hours, must be fully taxed.

The final settlement takes place after completing the tax return in the following year.

Employee’s option to choose regular (Full) tax deduction instead of half-tax in November salary

After you complete your 2023 tax return, the tax authorities will calculate whether you overpaid or underpaid your taxes during the tax filing season (January 23, 2024 - April 30, 2024).

Please note that we cannot predict when you will receive notification about the result of this tax assessment. However, it is usually released around June.
  • If you have paid too much tax, they will receive a rebate through the following year's tax return process. This is calculated on the year before that and their tax card. At the beginning of every year, the tax authorities give a ‘tax card' to your employer (Remote in this case) to let us know how much to deduct each month. This code is based on your previous year's income.
  • If you have paid too little, the remaining amount owed to the state will be adjusted. You can visit this official page to read how to process your underpayment.

For employees with hourly pay or 14-day salaries

  • For employees with a 14-day salary, either the last salary payment in November or the first payment in December can be paid without withholding tax
  • In the case of payment per hour, day, or week, an exemption applies for the earning period of the last two weeks of November or the last week of November and the first week of December.

Official information

  • Please visit this page to read more details.
  • Please visit this page to read about tax returns.
  • You can click here to use the tax calculator.
  • From the Skatteetaten account, you can see your expected annual income, expected yearly tax liability, plus how much you have paid to date. You're able to adjust your expected annual income so that your employer receives a correct tax card.

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