Per the new fiscal year starting 1 January 2025, these are key payroll compliance updates that payroll professionals with a presence in Norway should know.
Discontinuation of Additional Employer’s National Insurance Contribution
The temporary additional employer’s national insurance contribution of 5% on salaries exceeding NOK 850,000 has been discontinued. Introduced in 2023 to address extraordinary national budget expenses, this measure was criticised for increasing the costs associated with hiring highly qualified employees.
Changes in National Insurance Contribution Parameters
There are several changes to the national insurance contribution parameters:
- The tax exemption card limit is raised from NOK 70,000 to NOK 100,000. This adjustment means that individuals can earn up to NOK 100,000 without being liable for national insurance contributions.
- The national insurance contribution rates for wages and social security benefits has decreased from 7.8% to 7.7%. This reduction, combined with adjustments in the tax exemption card limit, is designed to provide financial relief for those with low to medium incomes.
- The lower limit for calculating national insurance contributions increased from NOK 69,650 to NOK 99,650
These changes align with the overall goal of reducing the tax burden on lower-income individuals, effectively increasing take-home pay for lower-income earners.
Modifications to Bracket Tax Rates
The Norway bracket tax is a progressive tax on personal income. For 2025, the tax rates are as follows:
- Brackets 1 and 2: tax rates remain unchanged at 1.7% and 4.0%, respectively
- Brackets 3, 4, and 5: tax rates increased by 0.1% points to 13.7%, 16.7%, and 17.7%, respectively
These adjustments are intended to balance the tax burden more equitably across different income levels.
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Max van der Klis-Busink, BBA, is the Owner of Passion For Payroll and Vice President of Global Strategy on PayrollOrg’s Board of Directors.
