Norway’s taxation system for individuals is based on a dual tax base system, dividing income into general income and personal income. Understanding how these two categories are taxed is essential for residents, non-residents, and expats working in Norway. This guide explains the rules, tax rates, and deductions for the 2025 and 2026 tax years.
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🇳🇴 What Is the Dual Tax Base System?
The dual tax base system separates income into two categories:
- General Income: Includes wages, business income, capital gains, and investment returns, taxed at a flat rate.
- Personal Income: Consists primarily of salary and pension income, subject to progressive bracket tax rates and social security contributions.
This system ensures that both employment-related earnings and other income sources are fairly taxed under Norwegian law.
📌 General Income in Norway
General income is taxed at a flat rate of 22%. This includes:
- Salaries and wages
- Income from business activities
- Capital gains and dividends (with upward adjustment)
- Interest from bank deposits and securities
Deductions such as minimum deduction, personal deduction, interest expenses, and charitable contributions may reduce your taxable base before applying the 22% rate.
📊 Example of General Income Calculation (2025)
- Salary: NOK 700,000
- Capital gains: NOK 20,000 (adjusted ×1.72 = NOK 34,400)
- Interest income: NOK 5,000
- Less deductions: NOK 108,550 (personal) + NOK 92,200 (minimum)
- Taxable General Income: NOK 538,650
- 22% tax = NOK 118,503
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⚖️ Personal Income in Norway
Personal income is primarily employment and pension income. Unlike general income, it is subject to bracket tax rates and social security contributions.
Personal Income Bracket Tax Rates (2025)
- 1.7%: NOK 217,400 – NOK 306,050
- 4.0%: NOK 306,051 – NOK 697,150
- 13.7%: NOK 697,151 – NOK 942,400
- 16.7%: NOK 942,401 – NOK 1,410,750
- 17.7%: Above NOK 1,410,750
In addition, employees pay a 7.8% social security contribution (5.1% for those under 17 or over 69). Self-employed individuals contribute 11%.
📊 Example of Personal Income Tax (2025)
- Salary: NOK 900,000
- Social security (7.8%): NOK 70,200
- Bracket tax: ~NOK 59,532
- Total personal income taxes: NOK 129,732
📋 General Income vs. Personal Income: Key Differences
| Category | General Income | Personal Income |
|---|---|---|
| Tax Rate | Flat 22% | Progressive rates (1.7% – 17.7%) |
| Deductions Allowed | Yes (personal, minimum, interest, charity) | Limited (applies mainly to social security base) |
| Includes | Wages, business income, capital gains, dividends | Employment and pension income |
✅ Conclusion
The dual tax base system in Norway ensures fair taxation of both work and capital. Understanding the difference between general income and personal income helps taxpayers make better financial decisions, maximize deductions, and remain compliant. Whether you are a resident, an expat, or a temporary worker, knowing which income falls under which category is critical for accurate tax planning in 2025 and 2026.
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