Will I have to pay more tax or get a tax refund in Norway?

This is one of the most common questions asked by people working in Norway: after the annual tax return, will I get a tax refund, or will I have to pay more? The Norwegian tax system works so that during the year we pay tax advances (deducted by the employer or paid by ourselves in the case of ENK), and the final settlement only takes place after the end of the tax year. Then Skatteetaten issues the so-called skatteoppgjør, meaning the final result - and that is where the answer appears: payment or refund. It is worth knowing how this mechanism works, which factors affect the final result, and why sometimes a shortfall can appear instead of the expected refund.

Tax advances and the annual tax assessment (skatteoppgjør)

In Norway, income tax is paid in the form of advances during the year, followed by the annual tax assessment. Employees have tax deducted each month by their employer based on the tax card (skattekort), while people running a sole proprietorship (enkeltpersonforetak, ENK) pay quarterly advances (forskuddsskatt) four times a year:

15 March,
15 June,
15 September and
15 December.

After the end of the tax year, a tax return (skattemelding) must be submitted, on the basis of which the Norwegian Tax Administration (Skatteetaten) carries out the annual assessment.

The result of the annual assessment (skatteoppgjør) will show whether you paid too much tax during the year or too little. In other words, it shows the amount to be refunded or paid.

If more was deducted from your salary/paid in advance during the year than the final tax due, an overpayment arises - you will then receive a tax refund (skatt til gode). The money is usually transferred to your bank account within a few weeks of receiving the assessment.
If, however, the advances were too low and the tax due turned out to be higher than the total advances paid, a shortfall arises - then you must pay a tax shortfall (restskatt).

The date when the annual assessment is issued varies - most people receive it between March and June, and at the latest by October/November each year.

If you have a shortfall, Skatteetaten will send you an invoice with the amount to pay. For larger amounts (above 1000 NOK), payment is split into two equal instalments, usually due around 20 August and 24 September (the exact dates depend on when you receive the assessment). Shortfalls below 1000 NOK are paid in one instalment, and very small amounts below 100 NOK do not have to be paid at all. Likewise, if your tax refund is less than 100 NOK, the tax office will not pay it out (such a small overpayment will, for example, be credited against future liabilities). In the vast majority of cases, however, refund or shortfall amounts are greater than 100 kroner.

How is income tax calculated in Norway?

The Norwegian tax system is progressive and consists of several elements. The final annual income tax (inntektsskatt) is the sum of the following components:

Tax on general income (alminnelig inntekt)

The basic state and municipal tax at a rate of 22% (according to the rates for 2025). It is charged on so-called general income after deductions, meaning gross income less, among other things, business expenses and allowances. This tax therefore amounts to 22% of taxable income.

National Insurance contribution (trygdeavgift)

This is the equivalent of a social insurance contribution, amounting in 2025 to 7,7% of employment income (11% for self-employed people - read more here (click!)).

This contribution is charged from the first krone earned above the so-called threshold for trygdeavgift (in 2025 this is 99 650 NOK per year). Everyone who works pays trygdeavgift - it finances the Norwegian National Insurance Scheme (folketrygd).

Progressive tax on higher incomes (trinnskatt)

This is an additional tax imposed on higher income bands. As income rises, it is paid according to increasing thresholds:

1. threshold: rate 1,7% for income above 217 400 NOK,
2. threshold: rate 4,0% for income above 306 000 NOK,
3. threshold: rate 13,7% for income above 697 150 NOK,
4. threshold: rate 16,7% for income above 942 400 NOK,
5. threshold: rate 17,7% for income above 1 410 750 NOK.

The thresholds given apply to 2025 - the Norwegian government updates the threshold amounts every year, but the percentage rates in the individual bands usually rise by about 0,1 percentage point per year or remain unchanged. Trinnskatt means that people with higher incomes pay proportionately more tax.

Tax-free amount and deductions

Before tax is calculated, certain allowances are deducted from income. Every resident is entitled to personfradrag (personal allowance) - in 2025 it amounts to 108 550 NOK. In addition, employees are entitled to the so-called standard employee deduction (minstefradrag) of 46% of earned income, up to a maximum of 92 000 NOK per year. Minstefradrag replaces minor business expenses (they do not need to be documented - the deduction is granted automatically up to the above limit).

For example, a person earning around 120 000 NOK per year may pay only a symbolic amount of tax, because after applying minstefradrag and personfradrag their taxable base may be 0 NOK. However, it should be remembered that trygdeavgift is charged separately from gross income above the threshold of around 100 000 NOK, so even with low income there may be a small National Insurance contribution.

Adding up the above components, the total income tax in Norway for an average person on standard earnings is around 24-32% - this effective rate consists of 22% tax on general income reduced by allowances and trygdeavgift, possibly increased by trinnskatt (if income exceeds the thresholds).

In practice, during the year the employer deducts advances according to the estimated percentage rate calculated on the tax card, so that the total amount corresponds to the expected annual tax. However, it may happen that the taxpayer's situation differs from the forecast - and that is when a refund or shortfall appears in the annual assessment.

Payment or refund - what does it depend on?

Whether your assessment results in a payment or a refund depends essentially only on whether the total advances paid covered the final tax for the year.

If your advances (deducted by the employer or paid by you) were higher than the tax due - you will receive a refund.
If, however, you paid too little during the year - you will have to pay the missing difference.

The ideal situation is, of course, a zero assessment, but in practice it is rarely possible to predict the tax exactly to the krone (or the mentioned difference of +- 100 kr).

The Norwegian tax system tries to avoid large shortfalls - tax cards are often set conservatively to leave some margin for a tax refund. Even so, both shortfalls and overpayments do happen.

Why do I have to pay more?

"Why a refund?" nobody asks, of course 🙂 Below are some typical reasons why an assessment may result in a shortfall (the need to pay more tax) or an overpayment:

Outdated information on the tax card

If during the year your income turned out to be higher than the tax card assumed, or the allowances you were entitled to were smaller, then the advances deducted as a percentage may have been too low. As a result, too little tax was paid and restskatt (a shortfall) will arise. The opposite situation (earnings lower than forecast or larger allowances) results in an overpayment and a refund.

Working for more than one employer

If you are employed by several employers at the same time, you must allocate the tax card correctly. Only the main employer should use a tabelltrekk card, while the others should deduct tax at a percentage rate. When each employer deducts advances according to the table (without knowing about the employee's other income), the total amount of advances will be too low and the taxpayer will receive a shortfall. Alternatively, if you have a percentage card - each employer should deduct according to the percentage.

Smaller allowances than expected

A typical example is interest on loans. If the tax card assumed large interest deductions (based on previous years), but in reality you paid less interest in that year, then you are entitled to a smaller deduction from income. A smaller deductible expense means a higher tax base and therefore higher tax than expected - a shortfall will therefore appear.

Change in personal circumstances

Tax allowances in Norway depend on personal circumstances (for example, single parent status, childcare costs, commuting to work, benefits, etc.). If your circumstances changed during the year and you did not update the information on skattekort, the advances were calculated using outdated data.

For example, losing single parent status, a child finishing nursery, or a shorter daily commute - all of these reduce the deductions and allowances available, which means the tax due increases (compared with the forecast) and may result in a shortfall. If, however, these changes worked the other way (for example, you started using larger allowances that skattekort did not take into account), then the assessment will show a refund.

Errors or omissions in the annual return

The reason for a shortfall may also lie in the tax return itself. Skattekort is based on information from previous years and data from payers, but if you do not check your annual return, it may contain incorrect or incomplete information. For example, the tax office may not have received information in time about an allowance that you need to add yourself. If you made changes to the skattemelding (for example, added a missed deduction or corrected income), the final tax may have changed compared with the initial calculation - and this affects the amount of refund/shortfall. It is always worth checking all the figures in the return carefully.

In summary...

To avoid unpleasant surprises in the form of a large shortfall, it is worth updating your skattekort throughout the year - for example after taking on additional work, a significant pay rise, or changes affecting tax allowances. Skatteetaten allows you to amend the tax card online at any time, so you can adjust the advances to your current situation.

If you already know that a substantial restskatt is coming, you can pay part of it in advance - by making a so-called tilleggsforskudd (additional advance payment) before 31 May of the following year. This helps you avoid interest on the shortfall, which is charged from 1 July until the payment deadline in August/September. In other words, by paying the missing tax by the end of May, you save yourself extra costs.

Kildeskatt 25% - no refund and no shortfall, but is it worth it?

People coming to Norway for work can use a special simplified tax system called kildeskatt på lønn (withholding tax at 25%). Under this system, the employer deducts a fixed 25% tax from the salary, which already includes the National Insurance contribution (trygdeavgift 7,7%).

The tax is settled in this way on an ongoing basis - the employee does not have to submit an annual tax return (skattemelding), and the 25% advance is the final tax. In the kildeskatt system there are therefore no refunds or shortfalls after the end of the year - we do not receive a skatteoppgjør, because the tax has been "closed" together with the salary payments and the advances paid at the time. Exceptions may be situations involving errors, for example if the employer mistakenly deducted more than 25% or if we obtained an exemption from trygdeavgift during the year - then the overpayment is refunded separately in the so-called skattekvittering.

No need to submit a return and a fixed tax rate are a major convenience - it is no surprise that many people are tempted by kildeskatt. Unfortunately, this simplification often turns out to be financially disadvantageous. Why is kildeskatt 25% not worth it? Because we pay 25% tax from the first krone earned, with no deductions.

For people on low and medium incomes, this means higher tax than under the standard system. For example, if you earn less than 40.000 kr/msc gross - in the normal system, thanks to the tax-free amount and deductions, you could pay much less tax, whereas under kildeskatt you will always pay the full 25%.

You also lose the ability to deduct, for example, loan interest, commuting costs, allowances for staying away from home (pendler), childcare expenses and many other allowances. Under kildeskatt there are no allowances - 25% is deducted from the gross amount without reducing it by costs. As a result, the effective tax rate may be several percentage points higher compared with normal taxation.

Remember that kildeskatt is voluntary! Every new employee from abroad can choose whether they want to pay tax at 25% (in which case the tax office will issue the appropriate skattekort) or under the normal rules. By default, if you do not make a choice, you will probably be covered by kildeskatt in your first full year of employment in Norway.

However, you have the right to opt out of this system even up to 3 years back and in most cases standard taxation is more favourable. Kildeskatt may make sense only for people who come for a very short time, do not intend to use any deductions or benefits and want to avoid submitting a return, but also for people with very high earnings (above 45.000 kr monthly). If, however, you are not earning a fortune, plan to stay longer, or have any allowances at all, it is better to call us: +47 21 38 38 21 Mon-Fri 9-21 and check whether it would be worthwhile to opt out of kildeskatt - often this makes it possible to obtain a tax refund, even up to 25.000 kr.

Summary

Tax assessment in Norway is a major source of questions and doubts for many Poles living and working here. The final result - tax refund or tax shortfall - depends primarily on whether the advances deducted during the year were sufficient in relation to your actual income and tax allowances. If you paid too much - you will get a refund. If you paid too little - you will have to pay more.

It is extremely important to keep skattekort updated and ensure that it reflects your real situation. This helps avoid unpleasant surprises and minimises the risk of a large shortfall. It is also worth remembering that the special kildeskatt 25% system means no shortfalls or refunds, but it is usually not worthwhile - most people are better off under the standard system.

Therefore, the best approach is to take a conscious view of tax: check your skattemelding, update your details during the year and use the deductions available to you. This way you can be sure that the annual assessment in Norway will not come as a surprise - and in many cases it will end with a pleasant tax refund in your account.

Want to find out whether you will have to pay more tax or get a refund, or whether it is worth opting out of kildeskatt?

Author of the article: Marcin - marcin@efirma.no

Will I have to pay more tax or get a tax refund in Norway?