The key things you need to know Norway's tax deduction cards
Norway’s tax administration has sent out tax deduction cards to millions of residents. Here are the most important things you need to know.
Norway’s tax administration sends deduction cards for the year ahead to millions of residents each December.
The deduction cards will dictate how much tax one pays and the deductions they will receive. All workers in Norway are required to have both a Norwegian identification number and a tax deduction card.
What is a tax deduction card?
The card shows your employer how much tax needs to be deducted from your salary before you are paid. Residents are typically notified when they receive their tax deduction card. You will also be notified of the type of tax card the Norwegian Tax Administration has issued you.
Almost all foreigners in Norway begin on a simplified scheme. This is a Pay as You Earn (PAYE) system. This means that new foreign workers in Norway are taxed at a fixed percentage of 25 percent.
Foreigners can opt out of the PAYE scheme and receive a tax deduction card. The card may result in higher taxes, although increased deductions may offset this.
Tax cards fall under percentage based and table based cards. As a general rule, your main employer will use a table-based card.
How to get a tax deduction card
If you do not have a tax deduction card in place, you will be taxed 50 percent of your salary until you have the card in place, regardless of what you earn.
If you are an employee, the most straightforward way of applying for a tax deduction card is to inform your employer that you do not yet have one. They will be able to apply for the card on your behalf.
Others, such as those who are self-employed, will need to use the Norwegian Tax Administration's website to apply for a tax card. The tax administration has an online wizard to give you more detailed information on the tax card you need and how to obtain one.
Checking the tax deduction card
You are encouraged to check the tax deduction card throughout the year. The tax administration suggests you do this at least once.
This ensures that you pay the right amount of tax and receive the correct deductibles that can help lower your tax bill.
One thing to check is loans and interest and ensuring that these match what you expect to pay during 2024.
Like tax returns, the Norwegian Tax Administration will have most of the necessary information. However, some information that could lead to deductions could be left blank.
Other things that will affect the tax card are if you have children throughout the year, if you start a BSU savings account, or if your kids start childcare.
How to change your tax deduction card
Changing your tax card is relatively easy. This is done online. When online, you can update the information on your tax card.
Once the information is updated, you will be sent a new tax deduction card electronically.
If your personal circumstances, income or expenses change throughout the year, it is important to ensure that the card is updated so that you do not underpay or overpay tax.
A ‘free card’
If you are expected to earn less than 70,000 kroner, you will have a free card. This means you do not pay tax on earnings under 70,000 kroner.
If you exceed this, a marginal tax of 25 percent will apply. A free card is only accessible if you are expected to earn 70,000 kroner throughout the entire year.
This would, therefore, be more applicable to those with part-time jobs or those who start a job right at the end of the year.
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Norway’s tax administration sends deduction cards for the year ahead to millions of residents each December.
The deduction cards will dictate how much tax one pays and the deductions they will receive. All workers in Norway are required to have both a Norwegian identification number and a tax deduction card.
What is a tax deduction card?
The card shows your employer how much tax needs to be deducted from your salary before you are paid. Residents are typically notified when they receive their tax deduction card. You will also be notified of the type of tax card the Norwegian Tax Administration has issued you.
Almost all foreigners in Norway begin on a simplified scheme. This is a Pay as You Earn (PAYE) system. This means that new foreign workers in Norway are taxed at a fixed percentage of 25 percent.
Foreigners can opt out of the PAYE scheme and receive a tax deduction card. The card may result in higher taxes, although increased deductions may offset this.
Tax cards fall under percentage based and table based cards. As a general rule, your main employer will use a table-based card.
How to get a tax deduction card
If you do not have a tax deduction card in place, you will be taxed 50 percent of your salary until you have the card in place, regardless of what you earn.
If you are an employee, the most straightforward way of applying for a tax deduction card is to inform your employer that you do not yet have one. They will be able to apply for the card on your behalf.
Others, such as those who are self-employed, will need to use the Norwegian Tax Administration's website to apply for a tax card. The tax administration has an online wizard to give you more detailed information on the tax card you need and how to obtain one.
Checking the tax deduction card
You are encouraged to check the tax deduction card throughout the year. The tax administration suggests you do this at least once.
This ensures that you pay the right amount of tax and receive the correct deductibles that can help lower your tax bill.
One thing to check is loans and interest and ensuring that these match what you expect to pay during 2024.
Like tax returns, the Norwegian Tax Administration will have most of the necessary information. However, some information that could lead to deductions could be left blank.
Other things that will affect the tax card are if you have children throughout the year, if you start a BSU savings account, or if your kids start childcare.
How to change your tax deduction card
Changing your tax card is relatively easy. This is done online. When online, you can update the information on your tax card.
Once the information is updated, you will be sent a new tax deduction card electronically.
If your personal circumstances, income or expenses change throughout the year, it is important to ensure that the card is updated so that you do not underpay or overpay tax.
A ‘free card’
If you are expected to earn less than 70,000 kroner, you will have a free card. This means you do not pay tax on earnings under 70,000 kroner.
If you exceed this, a marginal tax of 25 percent will apply. A free card is only accessible if you are expected to earn 70,000 kroner throughout the entire year.
This would, therefore, be more applicable to those with part-time jobs or those who start a job right at the end of the year.
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