The changes in tax thresholds and other provisions in Norway’s budget agreement, which will be effective from calendar year 2024 (unless otherwise stipulated), generally increase the tax burden of employees with high income and wealth, whereas employees with lower income and wealth may benefit from the changes featured in the budget agreement.
Moreover, employees who are covered by the Norwegian Social Security Scheme will benefit from the slight decrease of employee social security contributions.
Other measures simply reflect the annual adjustments in applicable standard deductions, allowances, and the tax backets.
However, with the lowering of the Bracket 5 threshold, more individuals with higher income will be included in that bracket. Because of this change, companies with international assignees who are subject to Norwegian taxation may see a slight increase in their assignment-related costs for assignees with higher income.
In cases of assignments to Norway where assignees are subject to Norwegian taxation, and for assignees working outside Norway but still subject to Norwegian taxation, international assignment cost projections and budgeting should reflect the changes described in this newsletter once they come into effect. Where appropriate, adjustments to gross-up packages and withholding taxes may need to be considered.
Each individual’s tax status should be determined in light of his or her particular situation.
