Kildeskatt 25% in Norway is simple: the employer withholds tax from the pay, and as a rule you do not file a standard annual tax return. Convenience, however, does not mean that this is the cheapest solution. With the same salary one person can benefit from PAYE, while another can overpay by several or even tens of thousands of kroner. We show with concrete examples how to check your own situation before making a decision.
Kildeskatt 25% – what does PAYE actually mean?
The full Norwegian name of the system is kildeskatt på lønn. Skatteetaten also uses the English term PAYE – Pay As You Earn.
Most new foreign workers can be covered by this system after applying for a tax card.
For a typical worker aged 17 to 69, the standard rate in 2026 is 25 percent of the salary.
If a person is exempt from paying the Norwegian trygdeavgift, the PAYE rate is 17.4 percent.
The biggest advantage of PAYE is its simplicity.
The employer withholds a specified percentage of tax from the pay. If you correctly remain in the kildeskatt system for the whole year, you do not later receive a standard skattemelding or the regular skatteoppgjør. Skatteetaten instead sends information confirming the amount of tax paid.
For a person who came to Norway for a few months, wants to work and does not have a complicated tax situation, this can be very convenient.
The problem begins when you pay much more for this convenience than the tax would be under the ordinary rules.
Who can use kildeskatt in 2026?
One of the basic conditions is the level of income.
In 2026 the upper income limit for the PAYE system is 725 050 NOK.
If you expect to exceed the limit, you should switch to the ordinary tax rules.
If at the beginning of the year you still don't know how much you will earn, you can start the year in PAYE and then opt out of it later.
Kildeskatt is intended primarily for foreign workers coming to Norway for a shorter period and for people who are not yet Norwegian tax residents.
PAYE can also be used in the first year in which a person becomes a Norwegian tax resident.
However, if you have been a Norwegian tax resident for more than a year, the PAYE system is no longer available.
Income below 725 050 NOK alone is not enough
This is one of the more common mistakes.
You may earn 400 or 500 thousand kroner and still not qualify for PAYE.
Among others, the following may be significant:
income from business activity in Norway,
certain income from a Norwegian ship or shelf,
some NAV benefits,
capital income,
other types of income indicated by Skatteetaten.
Therefore it is not enough to say:
“I'll earn less than 725 050 NOK, so I can have kildeskatt”.
You need to check your entire situation.
When can kildeskatt be worthwhile?
PAYE starts to look attractive primarily when you have a relatively high salary, few deductions and you want the simplest possible settlement.
You know in advance how much will be withheld.
You do not have to report typical expenses in skattemelding and you do not wait for the final tax assessment in the same manner as with ordinary taxation.
You should not choose PAYE just because 25 percent sounds reasonable.
First it is worth calculating the other option.
Why can ordinary tax be much lower?
In the ordinary tax system you do not just pay a single percentage of the entire salary.
Among other things:
minstefradrag,
personfradrag,
progressive trinnskatt,
trygdeavgift,
any additional deductions.
For 2026:
personfradrag is 114 540 NOK,
minstefradrag from salary is 46 percent, up to a maximum of 95 700 NOK,
the first trinnskatt threshold starts at 226 100 NOK,
trygdeavgift on the typical salary of a person aged 17 to 69 is 7.6 percent.
The tax rate on alminnelig inntekt is 22 percent.
And that is exactly why, especially with a low annual income, the difference between PAYE and ordinary taxation can be very large.
Jan earned 160 000 NOK in four months. How large can the difference be?
Let's assume a simple situation.
Jan lives in Poland. He comes to Norway for four months and earns 40 000 NOK per month.
The total income in Norway is:
160 000 NOK.
There is no other income from employment, business, pension or benefits.
We also assume that he meets the EEA conditions allowing full annual deductions to be applied, because at least 90 percent of the relevant income is taxed in Norway.
Minstefradrag amounts to:
46% × 160 000 NOK = 73 600 NOK.
Jan is also entitled to the full personfradrag of:
114 540 NOK.
In our model example there is therefore no tax on alminnelig inntekt.
There is also no trinnskatt, because his income did not exceed the first threshold of 226 100 NOK.
What remains is trygdeavgift.
At 7.6 percent:
160 000 × 7.6% = 12 160 NOK.
Under PAYE he would have paid:
160 000 × 25% = 40 000 NOK.
The difference:
27 840 NOK.
In this model case the ordinary rules therefore mean almost 28 thousand kroner less in Norwegian tax.
We did not need housing costs, mileage allowance or a loan for this.
The decisive factor was the structure of the ordinary tax system itself.
Why can the 90 percent rule change the whole outcome?
A person living in Poland or another EEA country, who has limited tax liability in Norway, may under certain conditions obtain full Norwegian deductions.
One of the most important conditions is that at least 90 percent of the relevant income is taxed in Norway.
If the taxpayer is married, the spouse's income may also be relevant when assessing the 90 percent condition.
That is why two colleagues may:
work at the same company,
earn exactly the same amount,
live in the same hotel,
and yet have a completely different tax situation.
One may have no income outside Norway.
The other may run a business in Poland or their spouse may earn income there.
The salary in Norway is identical.
The tax settlement is not.
Tomek also earns 160 000 NOK, but has income in Poland
Assume now that Tomek also works in Norway for four months and also earns 160 000 NOK.
However, he has additional income in Poland and in our example does not meet the 90 percent requirement.
Therefore he does not benefit from the full annual amounts like Jan.
With four months of limited tax liability the maximum minstefradrag for 2026 is 31 900 NOK.
Personfradrag is also subject to proportional reduction. The trinnskatt thresholds are likewise adjusted accordingly.
Under the assumptions of our model, ordinary taxation yields about:
34 600 NOK.
PAYE:
40 000 NOK.
The difference is about:
5 400 NOK in favor of ordinary taxation.
This is still a saving.
But no longer almost 28 thousand kroner.
And that is precisely why you cannot copy a colleague's tax settlement.
And when does PAYE start to make sense?
Take an employee who earns about 700 000 NOK in the full year, meets the PAYE conditions, is subject to the Norwegian trygdeavgift and does not have significant additional deductions.
PAYE will be:
700 000 × 25% = 175 000 NOK.
Under the ordinary rules, taking into account the standard 2026 rates, personfradrag, the maximum minstefradrag, trinnskatt and trygdeavgift, the model result is about:
177 800 NOK.
In this situation PAYE is therefore about:
2 800 NOK more favorable.
However, this does not mean that 700 000 NOK is a magic threshold.
It is enough that qualifying loan interest, travel expenses or another deduction appear and the result may change.
Therefore the best tool is not a colleague's calculation.
It is the current Skatteetaten calculator.
Got an A1? The comparison must be done separately
If you are not subject to the Norwegian social security system and are exempt from the Norwegian trygdeavgift, the PAYE rate in 2026 is 17.4 percent instead of 25 percent.
With an income of 400 000 NOK the difference is very large.
25 percent is:
100 000 NOK.
17.4 percent is:
69 600 NOK.
However, one must be careful about an important simplification.
Simply having a foreign A1 form should not be treated as automatic confirmation of the tax rate.
When determining exemption from trygdeavgift, the confirmed insurance status is what matters.
If you are indeed exempt from Norwegian trygdeavgift, when comparing with ordinary taxation it should also not be added on the other side.
We compare the same conditions.
A loan in Poland can help, but not always
In PAYE you do not benefit from ordinary deductions.
Under ordinary taxation, however, loan interest can matter, also in cross-border situations.
A person residing in another EEA state may in certain situations have the right to deduct foreign interest, if they meet the required conditions.
It is also not possible to deduct the same amount in two countries.
It is therefore not enough to say:
“I have a loan in Poland, so ordinary tax will be better”.
First you need to check whether the interest can actually be deducted in your situation.
Kildeskatt or ordinary tax? Check it step by step
Step 1. Check whether you can use PAYE
Start with your expected income.
In 2026 the limit is 725 050 NOK.
Also check other income, benefits and circumstances that may exclude you from the system.
Step 2. Determine your tax residence
Registration in Poland does not automatically mean that under Norwegian tax law you are still a tax resident solely abroad.
Norwegian rules provide, among other things, two important stay thresholds:
more than 183 days in a 12-month period,
more than 270 days in a 36-month period.
A double taxation agreement may also be relevant.
Step 3. Check the 90 percent rule
If you live in Poland or another EEA country and have limited tax liability in Norway, determine what portion of the relevant income is taxed in Norway.
If you are married, also check whether your spouse’s income affects your situation.
Step 4. Calculate PAYE
If you are subject to the Norwegian trygdeavgift:
income × 25 percent.
If you have a confirmed exemption from the Norwegian trygdeavgift:
income × 17.4 percent.
You have the first number.
Step 5. Calculate ordinary tax
Use Skatteetaten’s official calculator.
Enter actual data, not just the salary amount.
The following may be relevant:
period of employment,
tax status,
membership in folketrygden,
other income,
available deductions,
interest,
qualifying expenses,
family situation.
Step 6. Compare the total tax, not the percentage from the skattekort
This is very important.
Do not compare:
PAYE – 25 percent
with an ordinary skattekort, on which you may see for example:
32 percent.
The percentage withheld on the ordinary tax card is an advance payment.
The final result is determined after settling the whole year.
So compare the total expected tax in both systems.
Step 7. Only then make a decision
First you calculate.
Then you change the system.
Never the other way around.
How to opt out of kildeskatt?
You can opt out of PAYE during the skattekort procedure or later through the solution provided by Skatteetaten.
You decide yourself.
Your employer cannot do it for you.
Tax already deducted is not lost. Amounts paid will be credited on the new skattekort, the later skattemelding and skatteoppgjør.
Attention. You cannot return to PAYE for the same year
This is one of the most important pieces of information in the entire guide.
You can opt out of kildeskatt and switch to ordinary rules.
But if after the change it turns out that PAYE would have been more advantageous, you cannot re-enter PAYE for the same tax year.
In the following year you can use the system again if you still meet the required conditions.
So first, calculate.
Then make a decision.
Have you worked in Norway before? Also check previous years
You have until 31 December of the third year following the tax year to exit PAYE.
As of 14 September 2026 it looks as follows:
for 2023 – until 31 December 2026,
for 2024 – until 31 December 2027,
for 2025 – until 31 December 2028,
for 2026 – until 31 December 2029.
So if in 2023 you worked in Norway for a few months, paid 25 percent PAYE and never checked the ordinary scheme, it's worth revisiting the matter.
For 2023 the deadline already expires on 31 December 2026.
Seven questions before opting out of withholding tax
Before you change anything, answer seven questions for yourself.
How much will I earn in Norway in total for the year?
Do I have other income or benefits?
Where am I a tax resident?
Do I meet the 90 percent rule?
Does my spouse's income affect this assessment?
Am I subject to the Norwegian folketrygden and trygdeavgift?
Which deductions am I actually entitled to?
Only then compare two amounts:
tax under PAYE
and
the expected tax under the ordinary rules.
If the difference is 300 or 500 NOK, the simplicity of PAYE may be more important to you.
If it is 5 000, 15 000 or 28 000 NOK, the situation looks completely different.
Do you live in Poland? That's not the end of the matter
The fact that you paid withholding tax and the Norwegian PAYE settlement is essentially closed does not automatically mean that you have no tax obligations in Poland.
If you remain a Polish tax resident, you must separately analyze Polish regulations and the Polish-Norwegian double taxation avoidance agreement.
However, this is a separate issue.
In this guide we answer the question:
is PAYE more advantageous for you in Norway, or the ordinary tax rules?
Another important aspect of this matter
In the next guide we will explain in detail the 90 percent rule: which incomes Skatteetaten takes into account, when the spouse's income matters and when a person living in Poland can use the full Norwegian deductions.
Read on: The 90 percent rule in Norway – when does a Pole have the right to full deductions?
[PASTE LINK HERE AFTER PUBLISHING THE NEXT ARTICLE]
Withholding tax is neither a trap nor a gift
PAYE is simply another way of taxing income.
Its greatest advantage is simplicity.
The biggest limitation is the lack of ordinary deductions.
A person working only for a few months may under ordinary rules pay significantly less than 25 percent.
Someone earning close to the PAYE threshold, without significant deductions, may, on the other hand, discover that 25 percent is a very good result for them.
Therefore don't ask a colleague:
“Do you have withholding tax?”
Better ask:
„How much will I pay in both systems in my situation?”
This is a comparison that really matters.
Editorial comment Your Norway
Kildeskatt shows why you should not base tax decisions solely on the percentage shown on the tax card. A system designed for simplicity can be a very good solution, but with short employment and near-full deductions the difference can amount to thousands of kroner. Therefore, before leaving PAYE it is worth calculating everything twice, because the decision cannot be reversed for the given year.
Official sources and useful links
Skatteetaten – Kildeskatt på lønn for foreign workers
PAYE rules, rates, income limit and conditions for using the system.
https://www.skatteetaten.no/person/utenlandsk/skal-du-arbeide-i-norge/skattekort/kildeskatt-pa-lonn/
Skatteetaten – tax calculator
The official tool for estimating tax.
https://www.skatteetaten.no/person/skatt/skattekalkulator/
Skatteetaten – exit from kildeskatt
Information and the form for switching from PAYE to ordinary rules.
https://www.skatteetaten.no/skjema/utmelding-av-kildeskatt-pa-lonn/
Skatteetaten – tax rates 2026
Personal allowance, minimum standard deduction, bracket tax, social security contribution and other rates.
https://www.skatteetaten.no/rettskilder/type/uttalelser/uttalelser/forskuddsutskrivingen-2026/
Skatteetaten – foreign loans and interest
Information on deducting foreign loans and interest.
https://www.skatteetaten.no/person/skatt/hjelp-til-riktig-skatt/utland/lan-i-utlandet/
Information status checked: 14 September 2026.
