When you work as a contractor or consultant in Norway, you are most likely taxable for your income. The taxes in Norway are high, but not as high as many expect them to be. In Norway you have the possibility to get several deductions when you file your tax return, but you have to be proactive and aware of the options you may have based on your actual situation. The most beneficial deductions are related to commuter status. A commuter is a foreign Citizens who has a house/family at home while working short-term in Norway. You may test if you are a commuter (in Norwegian only) here.
The current normal tax rate is (in 2017) 24% percent of your gross taxable income after deductions, pluss surtax calculated from different steps of the income, starting at NOK 164 100 (pa, 2017). In addition you will have to pay 8,2% of your gross income before deductions in social security taxes. If you have a fixed contract rate including all taxes, you most likely also have to cover the employer’s social security contribution, which is 14,1% of the gross salary.
There are several ordinary deductions you may get:
– Standard deduction rate (10% of your gross income, maximum NOK 40 000 per year). This deduction you may get for maximum 2 years, but the disadvantage is that you loose some other deduction possibilities, such as commuter benefits.
– Minimum deduction (44% of your income, up to NOK 94750).
– Personal deduction (up to NOK 53150)
The minimum and personal deductions are dependant of how long time you have been working in Norway. If you have worked 4 months, the deductions will be 4/12 of the maximum rates.
Please note that many contractors have high daily or hourly rates, but not all of the rate is a part of the taxable salary. Contact us to get a projection where you can see which retention rate you may expect when taking assignments in Norway, and estimated deductions are taken into account.
We charge only NOK 2900,- + VAT (NOK 3625,- inc VAT) for full assistance with your tax return for 2017. To book this services, please do that in advance, as we have a very high demand in March/April each year.
In case you are looking for a payroll provider, please ready more on Ecovis’ main page in Norway.