Extra employer's tax on salary over 750,000 NOK
On December 21, 2022, the Ministry of Finance established regulations regarding the extra employer's tax.
Starting in 2023, an extra employer's tax will be calculated on the salary of employees that exceeds 750,000 Norwegian kroner. There has been uncertainty about whether employer contributions to OTP (occupational pension scheme) should be included in the calculation of the extra employer's tax. The regulations regarding the extra employer's tax were announced on December 21, 2022.
You can find the regulation here
The calculation basis is specified in Section 2:
"Section 2. Calculation basis
The calculation basis is the basis for the employer's tax, pursuant to the National Insurance Act Section 23-2 with regulations.
Extra employer's tax should not be calculated on the share of the employer's premium payment and contributions to collective pension schemes that are public or fall under Tax Law Section 6-46. The same applies to one-time payments for the replacement of the right to pension in employment that is not secured by premium and contributions, and one-time premium or contributions paid to secure such pension rights."
The basis for the tax is primarily all taxable cash wages, benefits in kind, taxable reimbursement of expenses, and pension contributions, etc., for each individual employee subject to reporting.
Contributions to collective pensions should not be included in the basis for the extra employer's tax. This applies to employer's occupational pension schemes, such as defined contribution pension schemes and enterprise pensions.
This is the same solution that we had in the old "wealth tax," where there was an extra employer's tax above 16G.
We have received several inquiries from our clients about whether it is worthwhile to make contributions to pension schemes before the new year to avoid the extra employer's tax. With this change, it is not necessary to do so to save on employer's tax.
Extra employer's tax applies to all income, including income from employers in municipalities that currently have a 0% rate for employer's tax and in Svalbard.
This means that extra employer's tax only becomes relevant when the salary from the individual employer exceeds the limit. This also applies in group structures.
In deliberate circumventions where multiple employers are used to reduce the basis for employer's tax, for example in a group structure, piercing the corporate veil may be carried out.
Extra employer's tax is calculated and determined from the calendar month when the fixed limit is exceeded, for the part that exceeds the limit.
Extra employer's tax can be reported collectively for the business where the main unit is registered, even if the employee has worked for several registered subunits.
Update as 1st of January 2023 for Per Diem /Mileage taxable and Nontaxable allowance
As of 1stJanuary 2023, the state rates for Per diem have been updated. The Tax Authorities has also updated the tax free Per Diem rates. Per diem rates are updated for travels in Norway and for travels abroad. Below you will find the effective rates from 1st of January 2023.
Download the file: Changes in rates 2023 for clients with per diem/taxable rates
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