Norway’s PAYE (Pay-As-You-Earn) scheme simplifies taxation for many contractors and gig workers who are non-residents. Introduced in 2019, it allows temporary workers to pay a flat rate of tax, eliminating the need to file a traditional tax return. If you’re working short-term contracts or gig work in Norway, understanding the PAYE system can save you time and prevent compliance issues.
Become Our Featured Tax Expert.
This premium ad space is reserved for one tax professional. Put your firm in the spotlight and reach qualified Norway leads directly.
To claim this exclusive spot, contact us at [email protected].
📌 What Is the PAYE Scheme?
The PAYE scheme is designed for non-resident workers in Norway. Instead of calculating complicated deductions, gig workers and contractors pay a flat 25% tax rate, which includes social security contributions. The tax is final, meaning you do not need to submit a tax return if you fall under this scheme.
👥 Who Can Use PAYE?
The scheme applies to:
- Non-resident contractors and gig workers with annual income below NOK 670,000 (2024 limit).
- Short-term employees staying in Norway for less than 183 days in a 12-month period.
- Freelancers or gig workers who do not qualify as fully tax-resident.
Exclusions: Offshore workers and seafarers on ships cannot use the PAYE scheme.
💰 How PAYE Tax Is Calculated
- A flat 25% tax on gross salary (includes social security contributions).
- No deductions allowed — such as for housing, travel, or pension contributions.
- Employer deducts PAYE directly from salary and remits it to Norwegian tax authorities.
- No filing of a tax return required if you remain under the scheme.
Sponsored Advertisement Space Available.
Promote your accounting, payroll, or legal services to Norway’s contractor and gig worker community here.
Contact us at [email protected].
📊 Example Calculation
| Annual Income (NOK) | Tax Rate | Total PAYE Tax | Net Income |
|---|---|---|---|
| 400,000 | 25% | 100,000 | 300,000 |
| 600,000 | 25% | 150,000 | 450,000 |
⚖️ PAYE vs. Ordinary Taxation
Contractors and gig workers can opt out of PAYE if they believe ordinary taxation is more beneficial. For example:
- If you have high deductible expenses such as housing or travel.
- If your income exceeds the PAYE threshold of NOK 670,000.
- If you expect to become a full tax resident in Norway.
✅ Key Advantages of PAYE
- Flat 25% rate — easy to understand and predictable.
- No tax return required — simplifies compliance.
- Immediate final taxation — no surprises later in the year.
⚠️ Potential Downsides
- No deductions for housing, pension, or work expenses.
- Not available for offshore workers and seafarers.
- May result in a higher tax burden if you qualify for substantial deductions under ordinary taxation.
Become Our Featured Tax Expert.
This premium ad space is reserved for one tax professional. Put your firm in the spotlight and reach qualified Norway leads directly.
To claim this exclusive spot, contact us at [email protected].
