PAYE or ordinary tax: the choice that shapes your first Norwegian year
In Norway newcomers automatically fall into the PAYE scheme: a flat 25% including contributions, without a tax return and without deductions. That is simple, but not always the cheapest, and not everyone may join. The good news: you can opt out up to three years later.
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Written and checked by Auke on , against the sources at the bottom. Is something no longer right? Report it below and I'll fix it.
Yes, as a newcomer you can pay tax in Norway in your first year without a tax return. Whoever applies for a tax deduction card (skattekort) joins the PAYE scheme automatically. That is a flat levy of 25 per cent on your salary, national insurance contributions included. No return, no assessment, no deductions.
The scheme is voluntary and applies only to those who:
- earn less than NOK 725,050 in 2026;
- have been tax resident for at most a year.
The finding at Skatteetaten (the Norwegian Tax Administration): opting out is possible until 31 December three years after the income year. But only you can do it, not your employer. And whoever opts out cannot go back for the same year.
What exactly is PAYE?
PAYE (kildeskatt på lønn, withholding tax on salary) is a fixed withholding: your employer withholds 25 per cent, and that's it. The following year you get no tax return and no assessment, only a receipt of what you paid. If you are exempt from Norwegian national insurance contributions, for example because you remain socially insured in the Netherlands, the rate is 17.4 per cent.
You join automatically with your first tax deduction card: newcomers fall under it in their first year as tax residents automatically. So you need do nothing to join. You have to do something to leave. That can be done at the ID check, when applying for your tax deduction card or later.
Who falls outside it?
The limits are hard. You cannot join PAYE if you:
- earn more than NOK 725,050 in 2026 (in 2025 the threshold was 697,150);
- have been tax resident in Norway for more than a year;
- receive benefits from NAV (the Norwegian labour and welfare administration), such as sickness benefit, unemployment benefit or parental benefit;
- have more than NOK 10,000 in capital income.
If you are not sure whether you will stay under the threshold, you may start with PAYE and opt out later. If you expect to exceed it, you tick the box for the ordinary scheme when you apply.
When is the ordinary scheme more favourable?
The flat 25 per cent buys simplicity, but no deductions. The ordinary scheme works with deductions PAYE does not know, including interest and travel costs. And it works with a rising rate, the trinnskatt (bracket tax). These are the building blocks for 2026:
| Component | Ordinary scheme 2026 |
|---|---|
| Personal allowance | NOK 108,550, pro rata if you live in Norway for only part of the year |
| Minimum standard deduction on salary | 46 per cent, up to NOK 92,000 |
| Trygdeavgift on salary (17 to 69 years) | 7.6 per cent |
| Trinnskatt, step 1 | 1.7 per cent on NOK 226,101 to 318,300 |
| Trinnskatt, step 2 | 4.0 per cent on NOK 318,301 to 725,050 |
| Trinnskatt, step 3 | 13.7 per cent on NOK 725,051 to 980,100 |
| Trinnskatt, step 4 | 16.8 per cent on NOK 980,101 to 1,467,200 |
| Trinnskatt, step 5 | 17.8 per cent from NOK 1,467,201 |
On top of that comes the tax on general income, after deductions.
The rule of thumb: anyone who keeps a mortgage, has high travel costs or works only part of the year runs the numbers for the ordinary scheme. Anyone earning a full year's salary without special items is usually fine with PAYE and saves the tax return. Skatteetaten has a calculator that puts both schemes side by side for 2024, 2025 and 2026.
You opt out yourself, and there is no way back. If you choose the ordinary scheme, you cannot return to PAYE for the same income year, and your employer cannot make the choice for you. So calculate first, and only switch when the sum shows it. The deadline is generous: until 31 December three years after the income year.
What happens after the first year?
PAYE is for your first year as a tax resident. After that everyone is in the ordinary scheme. In March you get a pre-filled tax return, with a deadline of 30 April. Most people receive their assessment in June. From then on the deductions PAYE left aside count.
The alternative you want to avoid: 50 per cent
Whoever has no tax deduction card at all discovers the real Norwegian emergency rate: the employer must then withhold 50 per cent. And Skatteetaten issues the tax deduction card only after the identity check in person.
That is not a fine, and what was withheld in excess comes back. But it halves your first payslips in the months when the deposit has already been paid.
How the ID check fits into your first weeks is in your first weeks in Norway. What the Netherlands levies on your pension in the meantime is in AOW, pension and tax in Norway.
In Vertrekklaar this is phase 5 of 5 of the journey: the same steps, but for your situation — in your order, tickable, and with the deadlines watched. See the whole journey to Norway.
What this rests on
The facts in this article come from these official pages. Rules change. When in doubt, go by the source, not this article.
- Skatteetaten — the PAYE scheme, the income threshold of NOK 725,050 and the opt-out deadline — skatteetaten.no
- Skatteetaten — for employers, no tax deduction card before the ID check and then 50 per cent withholding — skatteetaten.no
- Skatteetaten — the tax brackets (trinnskatt) for 2026 — skatteetaten.no
- Skatteetaten — national insurance contributions (trygdeavgift) for 2026 — skatteetaten.no
- Skatteetaten — the personal allowance of NOK 108,550, pro rata for part of the year — skatteetaten.no
- Skatteetaten — the minimum standard deduction on salary, 46 per cent up to NOK 92,000 — skatteetaten.no
- Skatteetaten — processing times, the tax return in March with deadline 30 April and the assessment — skatteetaten.no
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