Half tax for Christmas - how much truth is there in it?
Anyone who has worked in Norway has certainly heard of the "half tax before Christmas". It is said that it is a gift from NOKól, that we get more money. It is not entirely true, but as in every myth, there is some of it here. But what exactly is it about?
Advance payment and tax
First of all, it is worth paying attention to what is a tax advance and what is the tax itself. It is for this reason that this relief is often reproduced incorrectly. So:
- Advance tax is what we pay every month. It is paid by the employer from our paycheck, taking into account our tax card. Advance payments are used to pay tax during the year, so we do not have to pay a large amount at the end of the year.
- The tax is calculated based on our annual earnings only in the following year. Without taking into account deductions, it will be the same for everyone who earns the same amount (unless one of the people is on kildeskatt 25%). The tax card does not matter here. It is subtracted from the advance payments made and if the amount is negative, we receive this amount of subsidy, and if it is positive, we will receive this amount of refund. If the amount is less than 100, we do not receive or pay anything extra.
So what about this “half tax”?
Now that we know what an advance payment is and what a tax is, we can move on. Well, before Christmas we do not pay half of the tax, but half of the ADVANCE tax. If we are paid every two weeks, we pay nothing in one payment. For this reason, we receive more money in our hands before the holidays than during the rest of the months.
NOTE: This does not apply to kildeskatt 25% (PAYE).
Why doesn't this apply to kildeskatts?
We pay fixed advances of 25% on kildeskatt every month, and the final tax will also be 25% of our earnings. This means that we pay the tax together with the advance payment and its amount will not change (as long as the employer pays the advance payment correctly). We are not entitled to any discounts here, and we cannot settle this amount.
Can this be bypassed? Yes, if you earn less than NOK 40.000 per month, it is worth giving up kildeskatt and switching to standard settlement. You can count on a refund of up to NOK 20.000! All you need to do is order the service here and we will check how much you are entitled to and help you change it.
When does the employer collect half of the advance payment?
According to the law, it looks like this:
- if you are paid monthly, your employer should take half of your advance payment in November or December.
- If you're paid biweekly, your employer shouldn't take an advance payment on your last paycheck in November or your first paycheck in December.
However, this is precisely determined by the employer. If you want him to deduct the entire deposit during this period, you can ask him to do so.
What about benefit payments? Is that also the case?
Yes, in the case of benefits and benefits from NAV, half of the advance payment will also be collected or it will not be collected at all. Half of the advance payment is collected if:
- we download sykepenger, foreldrepenger, svangerskapspenger, overgangsstønad, pleiepenger, omsorgspenger, uføretrygd.
However, the advance payment will not be collected at all if:
- we charge dagpenger or arbeidsavklaringspenger - in both cases, no advance payment will be charged only for the last meldekort period in November or the first period in December.
- we receive aldrerspensjon, avtalefestvt pensjon (APF).
