forskuddstrekk

Forskuddstrekk is the Norwegian system for withholding income tax from employees’ wages at the source. It is designed to prepay tax during the year, so that the tax liability is settled gradually rather than in a large lump sum after year-end. The system is administered by Skatteetaten, the Norwegian tax authority.

How it works: when an employee starts a job, they provide a skattekort (tax card) to the employer. The card specifies how much tax should be withheld, either as a percentage of wages or as a fixed amount per pay period. The employer deducts the specified tax from each paycheck and transfers it to Skatteetaten. If an employee has multiple jobs, the cards are coordinated to avoid over- or under-withholding.

If no skattekort is provided or if information is incorrect, the employer may apply a standard withholding rate determined by Skatteetaten to ensure tax is collected. The exact rate can vary based on income and personal circumstances.

End-of-year settlement: the total tax withheld through forskuddstrekk is credited against the employee’s final tax liability for the year. Any over- or underpayment is adjusted through the annual tax assessment (skattemeldingen), which can result in a refund or an additional payment.

Relation to other tax arrangements: forskuddstrekk applies to wages and salaries paid by employers. Self-employed individuals or those with business income may have different arrangements, such as forskuddsskatt, which are handled directly with the tax authorities.