A. Update

The Norwegian Ministry of Finance presented its proposal for the state budget and national budget for 2024 as Prop. 1 LS (2023–2024) on October 06, 2023. The National Budget presents the Støre Government's programme for the implementation of economic policy and projections for the Norwegian economy.

The budget for 2024 provides security and opportunity for people and businesses throughout Norway. There are expenditure increases in several areas due to war in Europe, a record number of refugees and higher prices. The Government’s priorities are good public services and support for the most vulnerable, along with security and stability.

The key proposals impacting payroll are as under:

• Change in personal deductions and minimum deductions
  It is proposed to increase the personal allowance from NOK 79 600 to NOK 88 250. The government has also proposed that the upper limit for the minimum deductions in salary/social security and pension be continued nominally from 2023 at NOK 104 450 and NOK 86 250 respectively. The rates for the minimum deduction are also proposed to remain unchanged at 46% for salary/social security and 40% for pension.
• Increase in step tax
  The government has proposed changes to the collection points and rates in the progressive step tax for earned income, which has five collection points with an increasing tax rate for each collection point. The contribution points in stages 1 and 2 are proposed to be adjusted to NOK 208 050 in stage 1 and NOK 292 850 in stage 2, while the contribution points in stages 3 and 4 are proposed to be increased by slightly less than the estimated wage growth to NOK 670 000 and NOK 937 900. The entry point in step 5 is proposed to be salary-adjusted to 1573 500.
  The tax rate for steps 1 and 2 is proposed to remain unchanged at 1,7% in step 1 and 4% in step 2. However, the government proposes an increase of 0.1 percentage point in the tax rates for steps 3-5, i.e. 13,6% in stage 3, 16,6% in stage and 17,6% in stage 5. These changes may bring changes in the payroll tax tables.
• Reduction in social security contributions
  National Insurance contributions on wages has been proposed to be reduced by 0.1%, thus reducing it from 7,9% to 7,8%.
• Change in additional employer's contribution
  The Government will also begin to phase out the temporary additional employer’s national insurance contribution of 5%, which was introduced in the 2023 Budget, by increasing the threshold from NOK 750 000 to 850 000.
• Changes in tax-free allowances
  • The tax-free subsistence allowance for accommodation in temporary workers’ sheds is proposed to increase from NOK 250 to NOK 400.
  • The tax-free subsistence allowance for long-distance lorry drivers is proposed to increase from NOK 350 to NOK 400.
  • For non-taxable allowance for travel between home and work, the mileage rate has been proposed to increase from NOK 1,70 to NOK 1,76. The lower allowance threshold is also proposed to increase from NOK 14 400 to NOK 14 950.

B. Statutory Compliance Release Date: October 06, 2023

C. Effective Date: January 01, 2024

A. Update

The Norwegian Tax Administration (skatteetaten) sets standard interest rate 6 times a year for the purpose of calculating taxable benefit of a reasonable loan in employment. Recently, the rates set for the month of November to December 2023 have been announced as follows:

For further understanding on how these rates have been arrived, please refer to the link provided below.

B. Statutory Compliance Release Date: September 04, 2023

C. Effective Date: January 01, 2023

A. Update

The Norwegian Tax Administration (skatteetaten) sets standard interest rate 6 times a year for the purpose of calculating taxable benefit of a reasonable loan in employment. Recently, the rates set for the month of September to October 2023 have been announced as follows:

For further understanding on how these rates have been arrived, please refer to the link provided below.

B. Statutory Compliance Release Date: July 11, 2023

C. Effective Date: January 01, 2023

A. Update

The basic amount (G) in the National Insurance Scheme is set at NOK 118 620.

The basic amount as mentioned above is used to calculate many of Norwegian Labour and Welfare Organization (NAV) payments. The rate is updated on 1 May each year and is determined after the social security settlement.

B. Statutory Release Date: May 27, 2023

C. Effective Date: May 01, 2023

A. Update

The Norwegian Tax Administration (skatteetaten) sets standard interest rate 6 times a year for the purpose of calculating taxable benefit of a reasonable loan in employment. Recently, the rates set for the month of July to August 2023 have been announced as follows:

For further understanding on how these rates have been arrived, please refer to the link provided below.

B. Statutory Compliance Release Date: May 08, 2023

C. Effective Date: January 01, 2023

A. Update

The Norwegian Tax Administration has released the normal interest rate for taxation of benefit of low-interest loans from an employer for the tax year 2023. The Directorate of Taxes sets normal interest rate six times a year for the purpose of calculating taxable benefit of a low-interest loan within an employment relationship.

B. Statutory Release Date: March 03, 2023

C. Effective Date: January 01, 2023

A. Update

From 2023, additional employer's tax of 5% must be paid when total taxable salary benefits from a main legal entity to a single income recipient exceed NOK 750,000. The additional employer contribution must be calculated when the salary from the individual employer exceeds the limit of NOK 750,000. In A-melding, a new code “Additional employer's tax” has been included to report this and is used regardless of industry.
It has been further clarified that additional employer’s tax of 5% is not applicable to salary benefits to employees in the salary deduction scheme in Svalbard, Jan Mayen or Norwegian subsidiary countries in Antarctica.

B. Statutory Release Date: December 20, 2022

C. Effective Date: January 01, 2023

A. Update

The Norwegian Tax Administration has released the normal interest rate for taxation of benefit of low- interest loans from an employer for the tax year 2023. The Directorate of Taxes sets normal interest rate six times a year for the purpose of calculating taxable benefit of a low-interest loan within an employment relationship.

B. Statutory Compliance Release Date: January 03, 2023

C. Effective Date: January 01, 2023

A. Update

Tax Authority Skatteetaten has released the Tax Deduction Tables for the tax year 2023. Employers use these tables to determine tax deductions in the payroll system in accordance with the tax deduction cards of the employees.

B. Statutory Compliance Release Date: December 09, 2022

C. Effective Date: January 01, 2023

A. Update

Ministry of Finance has released the rate regulation 2023 providing for the following changes in the taxable value of certain benefits in kind:

1. Subsistence Savings for commuter stay

   If the employee has free board during the commuting stay or has board covered on account, the taxable saving is valued at NOK 98 per day, increased from NOK 95 per day.

2. Reimbursement for board and lodging for professional/business trips or work stays with accommodation - domestically and abroad
   • For the taxpayers who have stayed in hotels, the non-taxable amount of allowance has been increased to NOK 634 from NOK 617 per day.
   • For the taxpayers who have lived in dormitories without cooking facilities or in boarding houses or barracks, the non-taxable amount of allowance has been increased to NOK 177 from NOK 172 per day.
   • For the taxpayers living in dormitories with cooking facilities or spending the night privately, the non-taxable amount has been increased to NOK 98 from NOK 95 per day.
3. Kilometer allowance paid according to kilometer rates for use of a private car
   • The non-taxable limit for allowance paid for snowmobiles and ATVs has been increased to NOK 10,00 from NOK 7,50 per km.
4. KPrivate use of a company car when the standard benefit based on the list price is too high
   • If the standard benefit based on the list price is too high, and the company car scheme lasts the whole year, the discretionary benefit must be set at NOK 61 000, as increased from NOK 59 000, when calculating the withholding tax and when determining the tax.
5. Benefit of free board and lodging when the benefit is not determined according to a tariff

   The taxable value benefit of fully or partially free board and lodging is determined according to the following rates:

   Type	2023 (NOK)	2022 (NOK)
   Free stay (board and lodging)	138	134
   Free board (all meals)	98	95
   Free board (one meal)	50	49
   Free board (two meals)	76	74
   Free accommodation (own or shared room)	40	39

6. Allowance for accommodation when staying in your own barracks/camping caravan
   • Allowance of up to NOK 73 per day, increased from NOK 65 per day, to persons who, during a working stay away from home, live in their own barracks/campervan, which is not considered an operating asset, is not considered to be taxable.
   • Private use of company car NOK 338,800 (increased from NOK 329,600) is the limit for which 30% is considered and 20% for the excess is considered as taxable benefit in the case of private use of a company car.

B. Statutory Compliance Release Date: November 23, 2022

C. Effective Date: January 01, 2023

A. Update

The State Budget 2023 was proposed by the Norwegian Government on October 06, 2022 to adapt the tax and levy system for 2023 to today's demanding economic situation. The war in Ukraine has contributed to a sharp rise in the price of a number of necessary goods such as energy and food, among many other things. The intention of the Budget 2023 is to use the community's funds in a responsible way, so that the interest rates on, among other things, mortgages, which form an important part of the expenses for ordinary people, do not increase faster and more than necessary. At the same time, it is important that those who have the worst finances to withstand the cost of living increases are prioritized at a time when the use of oil money must be limited.

They key proposals impacting payroll are as under:

1. Additional Employer’s Tax

   The government has proposed an additional employer's tax of 5% throughout the country for wage earners who have over NOK 750 000 in wage income. The measure is adapted to the situation and can help to reduce the pressure in the labor market.

2. Change the basic deduction

   A reduction of the tax for lower incomes has been proposed, due to the fact that the personal allowance is increased sharply. In 2022, the personal deduction is NOK 58 250, the government proposes to increase the personal deduction to NOK 73 100.

3. Reduce income tax for low-income earners

   The government has proposed to reduce income tax for those with incomes below NOK 750 000 and increase tax for others. The cut-off point for tax on ordinary income from salary will be increased from around NOK 108 000 in 2022 to NOK 135 000 through increased personal deductions.

4. Reduce the social security tax on salary

   The government proposes to reduce the rates for social security tax on salary by 0.1% to 7.9%.

5. Increase cost coverage for barracks and boarding houses

   It has been proposed that commuters who live in barracks are entitled to a deduction for, and tax-free coverage of, additional costs for food, regardless of whether there are cooking facilities in the barracks or not.

6. Increase in mileage rate

   The government has proposed to adjust the price of the mileage rate and the base amount in the travel deduction. The mileage rate is proposed to be increased from NOK 1,65 to NOK 1,70, and the minimum amount from NOK 14 000 to NOK 14 400.

7. Increase the valuation of electric cars

   It has been proposed to equalize electric cars and other cars in the taxation of company cars. This means that the government proposes to remove the valuation discount for electric cars, which as of 2022 is 20%.

8. Increase in deduction for trade union fees

   It has been proposed to increase the deduction for trade union dues from NOK 5 800 to NOK 7 700 so that it stimulates more people to be members of trade unions.

Final impact on the tax tables and other aspects of payroll will be confirmed as soon as the final budget is approved.

B. Statutory Compliance Release Date: October 06, 2022

C. Effective Date: January 01, 2023

A. Update

The Storting has adopted amendments to the law on wage obligations during redundancy. It has now been decided to increase the employer's wage obligation period for redundancies from 10 to 15 days. This will apply to redundancies that are implemented from the effective date.

B. Statutory Compliance Release Date: February 09, 2022

C. Effective Date: March 01, 2022

A. Update

Compulsory Occupational Pension Scheme is a pension scheme for employees whereby an employer is required to pay an amount corresponding to at least two percent of the employees’ salaries for their pension. Most employers in the private sector must establish a pension scheme for their employees.

Following amendments have been brought in the rules for Compulsory Occupational Pension Scheme:

• All employers who are obliged to provide a pension scheme must save at least 2 percent of the employees’ income from the first krone. Earlier, the employer was only obliged to pay pension contributions on the employee's income from and including 1G (the basic amount in the National Insurance Scheme).
• The minimum requirement of a full-time employment (FTE) percentage of 20% to be entitled to a membership in the pension scheme has been removed.
• The age limit for a membership in the pension scheme is now 13 years. Employees are entitled to a membership in the pension scheme when the income exceeds NOK 1,000, or NOK 10,000 if the enterprise is a tax-exempt organisation. Previously, the pension scheme covered employees over the age of 20 years who held more than 20 percent of FTE.
• The exemption rules for seasonal workers have been removed.

An employer must adapt the pension scheme to the above new rules by June 30, 2022 at the latest.

B. Statutory Compliance Release Date: December 22, 2021

C. Effective Date: January 01, 2022

A. Update

Dirt surcharge is provided as compensation for additional costs for workwear. For payroll tax purposes, 1/3rd of the amount of surcharge, not more than NOK  2 588, is considered as taxable. For the tax year 2021, the maximum taxable amount was NOK 2 530.

B. Statutory Compliance Release Date: January 05, 2022

C. Effective Date: January 01, 2022

A. Update

The draft Tax Deduction Tables for 2022 have been published by Tax Authority Skatteetaten, pursuant to Budget 2022. These tables are used by employers while calculating tax deductions in the payroll system as per the employees’ tax deduction cards.

B. Statutory Compliance Release Date: December 09, 2021

C. Effective Date: January 01, 2022

A. Update

As per the Royal Decree no. 26 November 2021, from the new year 2022, the Holiday Act will also apply to Svalbard. The rights of employees will be strengthened by the Government by introducing the Act in Svalbard. This will provide safer and more stable working conditions for the employees working there.

B. Statutory Compliance Release Date: November 26, 2021

C. Effective Date: January 01, 2022

A. Update

Regulations “Satsforskriften 2022” have been released by the Ministry of Finance providing changes in the taxable value of benefits in kind and non-taxable allowances for the income year 2022. Some of the significant changes are:

1. Cost savings

If the employee has a free board during a commuter stay, the taxable cost savings will be valued at NOK 95 per day. Currently, the taxable cost savings are valued at NOK 94 per day.

2. Reimbursement for boarding and lodging for business trips or work stays with accommodation- domestic and abroad

When compensation or reimbursement for boarding and lodging on business trips with accommodation or work stays outside the home is paid with up to:

• NOK 617 per day for employees who stay in hotels etc., and also pay for breakfast, or
• NOK 172 per day for employees who live in a boarding house or dormitory/barrack without cooking facilities, or
• NOK 95 per day for employees who live in a dormitory/barrack with cooking facilities or arrange for a private overnight stay,

it will be assumed that the remuneration does not result in any taxable gain to the employees.

Presently, the limit of these non-taxable allowances are NOK 609, NOK 170 and NOK 94 per day, respectively.

If the taxpayer also covers one or more meals, the above non-taxable allowance is reduced by 20% for breakfast, 30% for lunch and 50% for dinner with the amounts rounded off to the nearest whole krone.

3. Taxable value of free boarding and lodging facility provided

The taxable benefit of fully or partially free boarding and lodging facility will be determined at the following rates:

• Free stay (board and lodging): NOK 134 per day
• Free board (all meals): NOK 95 per day
• Free board (two meals): NOK 74 per day
• Free diet (one meal): NOK 49 per day
• Free accommodation (own or shared room): NOK 39 per day.

Presently, the rates are NOK 132, NOK 94, NOK 73, NOK 48 and NOK 38 per day, respectively.

B. Statutory Compliance Release Date: November 26, 2021

C. Effective Date: January 01, 2022

A. Update

On October 12, 2021, the Solberg Government presented its proposal for the national budget for 2022. Here is a brief overview of the most important proposals impacting payroll:

• Change in General Share Acquisition Scheme of a Limited Company
  
  The government proposes that the tax-free discount employees can receive when buying shares in the company they work for be increased from the present rate of 25% to 30% percent of the market value of the share. The maximum value of NOK 7 500 per employee per year will continue.
• Distance Deduction for travel allowance is simplified at a fixed rate per kilometer
  
  The current rules for travel expenses providing a tax deduction of NOK 1,56 per kilometer up to 50 000 km with a limitation to NOK 0,76 over 50 000 km are proposed to be repealed. The Norwegian Government proposes instead to introduce a deduction at a fixed rate of NOK 1,65 per kilometer.
  The bottom amount will be differentiated geographically according to Statistics Norway's centrality index. Accordingly, employees residing in municipalities in centrality class 4-6 are given a basic amount of NOK 14 000. Taxpayers residing in centrality class 1-3 are given a basic amount of NOK 23 900. Employees resident in another EEA country are given a basic amount of NOK 14 000, corresponding to centrality class 4-6.
• Changes in the scheme with differentiated employer contributions
  
  The government is proposing changes to the scheme for differentiated employer contributions to increase the use of home offices. In the scheme, the government proposes minor adjustments in the rates for employer's contribution in some municipalities and change in the sector delimitation for some companies. The scheme must be notified and approved by ESA before the end of 2021.

For further information about the budget, kindly refer to the source below.

B. Statutory Compliance Release Date: October 12, 2021

C. Effective Date: January 01, 2022

A. Update

The basic amount in the National Insurance Scheme is set at NOK 106 399.

B. Statutory Compliance Release Date: May 21, 2021

C. Effective Date: May 01, 2021

A. Update

New rules for the redundancy period have been implemented by the Government as per which the maximum period as an employer shall be exempted from the wage obligation during redundancy period of 26 weeks (reduced from 49 weeks) within a period of 18 months. For new cases, weeks of redundancy before July 01, 2021 will not count towards used redundancy weeks. All new redundancies in 2021 and 2022 will thus be able to last for 26 weeks, only deducting any periods of redundancy after July 01, 2021.

This applies to layoffs that start:

(A) from July 01, 2021

For redundancies that start on July 01, 2021 or later, you can lay off up to 26 weeks within a period of 18 months without the wage obligation re-entering.

To ensure a real opportunity to lay off after the pandemic, any layoff periods before July 01, 2021 will not count towards used layoff weeks in the last 18 months for all new layoffs starting on July 01, 2021 or later.

(B) before July 01, 2021

For current redundancies that started before July 01, there is no limit to September 30, 2021 for how long you can lay off without the wage obligation re-entering. From October 01, 2021, the wage obligation will re-emerge for an ongoing redundancy that started before July 01 when you have laid off a total of 49 weeks or more during a period of 18 months.

Employees who are taken back to work will be able to be laid off again after July 01. Then they will also be covered by the rule of a maximum of 26 weeks of redundancy within an 18-month period, with counting only back to July 2021.

B. Statutory Compliance Release Date: May 11, 2021

C. Effective Date: July 01, 2021

A. Update

As per a Press release, there will be no employer period II for redundancy pay.

The government proposes in the revised budget for 2021 that no employer period II be introduced for redundancies.

It was planned to introduce an employer period II from June 01, 2021, where employers who have had employees laid off for more than 30 consecutive weeks would be obliged to pay wages for 5 new days in order to continue layoffs. In light of the development in the pandemic and the situation for companies with long-term redundancies, the government proposes in the revised national budget 2021 that no employer period II be introduced anyway.

B. Statutory Compliance Release Date: May 02, 2021

C. Effective Date: June 01, 2021

A. Update

In order to further support stable employment and ensure employment, and reduce the tax burden of the new recruits' personal income tax withholding, the following is an announcement¹ regarding the improvement and adjustment of the personal income tax withholding for those who obtain wages and salary income for the first time in the middle of the year:

• For a resident individual who obtains income from wages and salaries for the first time in a tax year, the withholding agent can calculate the cumulative standard deduction by multiplying 5000 Yuan per month by the number of months ending in the taxpayer's current year. This means that in the first month of employment of such first-time earners, cumulative standard deduction shall be granted starting from January till the month of tax withholding in a tax year.
  For example, for a fresh graduate who commences employment on July 01, 2020 and receives the first salary for July, the deduction for that month will be the standard monthly amount of CNY 5,000 plus the accumulated deductions of CNY 30,000 for 6 months, from January to June, prior to the commencement of the first employment, i.e. CNY 35,000 in total.
• If a student receiving full-time academic education obtains labor remuneration for internship, the withholding agent should withhold personal income tax in the erstwhile cumulative manner, without giving effect to this announcement. In short, this announcement is not applicable to interns.
• Employees who comply with the provisions of this announcement should promptly declare to the withholding agent/employer and truthfully provide the relevant supporting materials or undertakings. Such supporting materials or undertakings should be kept for future reference.

B. Statutory Compliance Release Date: July 28, 2020

C. Effective Date: July 01, 2020