The minimum deduction (minstefradrag) in Norway is a standard deduction offered to both employees and pensioners to reduce their taxable income. Understanding how it works can lead to thousands of kroner in tax savings. This blog explains who qualifies, how much you can claim in 2025, and how it affects your overall tax liability.
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✅ What Is the Minimum Deduction?
The minimum deduction is a tax deduction automatically applied to your gross income (either salary or pension) when calculating taxable income. It is designed to cover expenses related to earning income and helps reduce the amount on which you are taxed.
👥 Who Qualifies for the Minimum Deduction?
- Employees receiving salary, wages, or employment income.
- Pensioners receiving retirement or disability pensions.
- Fishermen, Seafarers, and Freelancers with special employment income conditions.
📊 Minimum Deduction Rates (2025 Estimates)
The deduction is calculated as a percentage of income, with both minimum and maximum limits:
| Income Type | Deduction % | Min. Deduction | Max. Deduction |
|---|---|---|---|
| Salary / Wages | 46% | NOK 4,000 | NOK 109,950 |
| Pensions | 40% | NOK 4,000 | NOK 90,800 |
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🔍 How the Deduction Is Applied
The deduction is applied automatically when you file your tax return or when your employer reports your income. It is deducted from your gross income to determine your net income for general tax purposes.
Example: If you earned NOK 400,000 in salary in 2025, your minimum deduction would be:
46% × 400,000 = NOK 184,000 → Limited to max NOK 109,950 deduction.
🧾 Can You Combine the Minimum Deduction with Other Deductions?
Yes, the minimum deduction can be combined with other tax benefits such as:
- Standard personal deduction
- Interest on loans
- Travel and commuter deductions (if not included in minimum)
- Parental or child-related deductions
📅 What If You Work Part of the Year?
The deduction is pro-rated based on the amount of income you earn. For example, if you worked for only six months and earned NOK 200,000, your minimum deduction would still be calculated based on 46% of that income—subject to the same maximum cap.
💡 Tips to Maximize Tax Savings
- Use Skatteetaten’s tax calculator to estimate how much you’ll save.
- Make sure you’re not double-claiming other employment expenses that are already included in the minimum deduction.
- Pensioners should check how the deduction affects their effective tax rate.
- For foreign workers: the PAYE scheme does not allow this deduction—only those under ordinary taxation qualify.
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