Tax exemption for gifts to employees – Cost savings on the employer's National Insurance contributions in Norway

tax exemption for gifts

Tax exemption for gifts without a special occasion is nothing new, but this year two changes to the regulations offer the possibility of significant cost savings for many employers. The first amendment is that the requirement for a general scheme has been removed. That is, you no longer have to give gifts to all employees for the tax exemption to apply, nor do you have to give the same gift to everyone. The second change that is now being implemented is that the value amount limit is increased from NOK 2,000 to NOK 5,000.

Tax exemption for gifts – what is covered?

The tax exemption scheme for gifts without special occasion can be applied to all types of taxable natural benefits. These include:
• Electronic communication
• Personnel insurance
• Interest rate advantage of loans in working conditions
• Staff discounts
• Health club subscription

This means that you can give your employees, for example, fully or partially tax-free coverage of electronic communication, personnel insurance, public transport cards, subscriptions to the fitness center, or tickets to concert or other cultural events. This is something that will be relevant for many employers.

In order to handle this change in a simple and smart way, we would advise you to embed a mechanism in the payroll processing that converts such taxable benefits into deductible, until the annual limit of 5,000 is reached for each individual employee. In this way, you can take advantage of the new opportunities the regulations have to offer, without requiring additional administration and follow-up.

We at Sariba have designed just such a solution for the automation of tax exemption for gifts i SAP payroll , a solution that is easy to both implement and use. We simply note which types of salary subject to tax and levy are to be included in this processing, and in the salary form we incorporate a couple of rules that convert taxable types of salary into tax-free until the annual limit is reached. Sounds simple and smart, right? That's because it is!

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Marita Johansen

Consultant Manager

Contact Marita Johansen and we will help you get started.