trygdeavgift

Trygdeavgift is a payroll tax in Norway that funds the national social security system, known as folketrygden. The contribution is levied on income from work and is paid by employees, while self-employed individuals also contribute on their business income. The revenue supports a range of benefits administered under the national insurance scheme, including retirement pensions, disability benefits, sickness and maternity benefits, and survivor’s benefits. The trygdeavgift is collected as part of the payroll tax system by the Norwegian Tax Administration (Skatteetaten) and is coordinated with the social security administration (NAV), which administers the benefits financed by the contribution.

Rates and calculation of trygdeavgift vary by category and income level and are set by statute. There are upper and lower thresholds and certain exemptions or special rules for specific groups, such as low-income earners or particular employment situations. Self-employed individuals are taxed on net income from their business activities, with applicable deductions and rules that may differ from those applying to salaried employees. In cross-border situations or for residents with unusual work arrangements, special rules may apply.

Trygdeavgift is a distinct component of the broader payroll tax framework in Norway and is separate from employer contributions (arbeidsgiveravgift) and from ordinary income tax. Its primary purpose is to finance social insurance benefits rather than general public revenue, aligning with the aims of folketrygden to provide income protection and social security coverage for residents and workers.

See also: Folketrygden, NAV, Skatteetaten.