The Støre Government is proposing a number of minor adjustments to the tax system for 2026 which, viewed as a whole, will reduce the tax burden for most individual taxpayers.
The changes include, amongst other more minor changes, an increased personal minimum deduction, higher thresholds for bracket tax, an increased trade union deduction and a substantial increase in the IPS deduction. At the same time, the parental deduction will be reduced in light of lower childcare costs, and a new pilot scheme for an employment deduction for young persons will be introduced.
The Government maintains that, overall, 98 per cent of taxpayers will have reduced or unchanged income tax in 2026, with an average reduction of approximately NOK 800. The proposed reliefs are broad and relatively neutral in distributional terms and are intended to ensure that most people retain more of their income.
In the following, we review the most significant changes.
Income tax for individual taxpayers
Personal income for taxpayers in Norway is taxable, but deductions are granted for certain types of expenses. A deduction reduces your taxable income, and there will therefore be a lower amount upon which tax is calculated. Among these deductible expenses is the personal minimum deduction.
The Støre Government proposes that the personal minimum deduction be increased from NOK 108,550 to NOK 114,210, representing an increase of NOK 5,660. All income below the proposed personal minimum deduction will be tax-free.
This means that anyone earning more than NOK 177,600 will pay slightly less tax. For those earning between NOK 114,210 and NOK 177,600, there will be slightly more tax to pay.
The Støre Government is not proposing any changes to the rates for the progressive bracket tax, but all five thresholds are proposed to be increased by 4 per cent. The increase is in line with estimated wage growth for 2026.
Trade union deduction proposed to be increased
The Støre Government proposes that the trade union deduction be increased from NOK 8,250 to NOK 8,700 in 2026. This deduction is granted to those who pay membership fees to a trade union or employee organization and is deducted from ordinary income. This means that your personal tax liability will be reduced by 22 per cent of the deduction, resulting in a tax relief of NOK 1,914, provided that you pay at least NOK 8,700 in annual membership fees.
The Government's proposal also states that the aim is to increase this deduction to NOK 10,000 during the current parliamentary term.
IPS – maximum deduction proposed to be increased
The Støre Government also proposes a significant increase in the maximum deduction for individual pension savings (IPS) from NOK 15,000 to NOK 25,000. In percentage terms, this represents an increase of 67 per cent. The scheme grants you a deduction if you save for a pension, and the deduction is made from ordinary income. This means that your personal tax liability will be reduced by 22 per cent of the amount you save, up to a maximum of NOK 25,000. If you save the maximum amount for your pension via IPS, you will therefore receive a tax relief of NOK 5,500.
Parental deduction proposed to be reduced
Furthermore, the Støre Government is proposing a reduction in the parental deduction from 2026. The reduction is substantial for the first child, with a reduction of NOK 10,000, from the current NOK 25,000 to NOK 15,000. For additional children, the deduction will be reduced from NOK 15,000 to NOK 10,000.
At first glance, this may appear to be a tax increase. However, it must be viewed in the context of the significant reduction in childcare costs in recent times, which is proposed to be maintained with a maximum price per month of NOK 1,200 per child. The previous deduction rates of NOK 25,000 and NOK 15,000 are proposed to be maintained for children over the age of 12 with special needs.
Pilot scheme for employment deduction for young persons proposed to be introduced
The pilot scheme for an employment deduction for young persons, colloquially referred to as the "Tax Lottery", is proposed to be introduced. This is an entirely new initiative. To qualify for participation, you must be born between 1991 and 2006. If you are selected, you will be granted, inter alia, a deduction from ordinary income of up to NOK 125,000, and the deduction covers salary, sickness benefits and business income – but not social security benefits. The pilot scheme is proposed to be implemented for a period of five years.
Finnmark deduction proposed to be increased
For persons residing in the priority zone in Finnmark and North Troms, the lower tax rate on ordinary income (18.5 per cent vs. 22 per cent in the rest of the country) is proposed to be continued. It is further proposed that the "Finnmark deduction" be increased from NOK 30,000 to NOK 45,000, and persons residing in the priority zone will also be able to have up to NOK 60,000 in student debt written off each year.
