Taxes and working life

1. Taxes and working life The welfare state is tax funded Made by Vox in cooperation with Oslo kemnerkontor and Oslo Voksenopplæring Servicesenter

2. Taxes and working life The welfare state is tax funded

3. Taxes in Norway • The whole community benefits from tax-financed services • Health (medical treatment, hospitals, etc.) • Benefits from the Norwegian Labour and Welfare Administration (NAV) (sick pay, maternity benefits, pensions, etc.) • Education • We have different taxes in Norway, such as income tax, value-added tax (VAT) and excise duties (annual fee for cars, gasoline, tobacco and alcohol). • Everyone contributes by paying taxes, both individuals and businesses.

4. Tax money is distributed as follows:

5. ValueAddedTax (VAT) What you have paid for the food Paid in taxes to the State (VAT)

6. Taxes when you work • Your employer shall deduct tax every time you receive salary. This is payment of tax in advance. • The following year the tax office calculates your final tax as compared to the tax your employer has deducted from your salary. Have you prepaid too little tax in advance? Have you prepaid too much tax in advance?   You must pay tax arrears. You’ll get your money back.

7. LiliyaAkaeva • Liliya Akaeva and her two children of 5 and 7 years came to Norway as Chechen refugees three years ago. • Her husband is in a refugee camp. Liliya and her children want him to come to Norway. • After completing the introductory program, she has begun to apply for a job. • Liliya is looking for different jobs. She is a graduate in law from her homeland, but it is difficult to get a job that fits her education. That’s why she agrees to start to work for Vox as a cleaner.

8. Everyone should have a written contract of employment which gives the following information: • Work content • Right to holiday and holiday pay • Employee’s and employer’s termination deadlines • The agreed salary and any supplements • Agreed working hours and breaks • Trial period For more information see arbeidstilsynet.no Liliya’s contract of employment

9. Application for tax deduction card • To get thetax deduction card for the first time please contact the tax office. You must provide the following : • Valid passport • Residence or work permit • Norwegian personalnumber (if you have)

10. Liliya’s tax deduction card Delivered to themainemployer Payment of regular salary, such as monthly salary, calculated by the tax table. Upon payment of other salaries, taxes are calculated by percentage. Delivered to otheremployers

11. Excerpt from thetaxdeductioncard Liliya’s paycheck Salary to bankaccount Prepaidtax

12. Liliya receives her salary into her bank account

13. Liliya receives her certificate of pay and tax deducted at the end of January/beginning of February 2010 • Employer Last year’ssalary Taxdeducted in 2009 The end of year certificate of pay and tax deducted should be controlled against paychecks.

14. Examples of other end of year certificates  Money in the bank? The bank sends a statement of deposits and interests.  Children in kindergarten or activity school? Kindergartens/Activity schools submit papers that show the costs of childcare (private nursery schools/kindergartens are not obliged to send statements).  Member of a trade union? The trade union will send a statement that shows paid subscription. Subscriptions paid via the employer will be listed on the certificate of pay and tax deduction (Lønns- og trekkoppgave).

15. Liliyareceives her taxreturn at the end ofMarch/beginningof April 2010 Salary of 220 000 is from the certificate of pay and tax deducted that Vox has submitted. Anyone who receives salary gets a standard minimum deduction. It is calculated automatically as 36 % of their salary and is never less than 31 800 kr or more than 70 350 kr. Everyone who has spent money on childcare gets a child-care deduction. The deduction is a maximum of 25 000 kr for one child and 15 000 kr for each child after the first. Anyonewho is a memberof a union gets a deduction for paymentof dues. The deduction is a maximumof3 600 kr. Checkyourtaxreturnagainstyourcertificateofpay and taxdeducted!

16. Liliya’spreliminarytaxcalculation Checkthetaxesdeductedagainstthecertificate(s) ofpay and taxdeducted

17. Liliya has to correct her tax return Liliya must inform the tax collector about the tax deducted to avoid tax arrears.

18. Liliyareceives her tax settlement notice at the end of June 2010 Tax Settlement notice also includes salary and tax deducted from the summer job. Final taxcalculation Prepaidtaxes Tax refund

19. Does Liliya need the forms later? Yes, she needs them if she applies for: • Family immigration (family reunification) • Visits by relatives from the homeland • Bank loans • Unemployment benefits She needs them also if: • The employer doesn’t inform the tax office about the tax she has paid • The employer goes bankrupt

20. Liliya gets holiday pay • Liliya gets a salary for 11 months each year. The last month is holiday and she gets holiday pay. • All are entitled to four weeks and one day of holiday and get 10.2% of last year's salary as holiday pay. • Some have an agreement for five weeks of holiday and receive 12% of last year's salary as holiday pay . • Holiday pay is paid by the employer, usually in June. • How much does Liliya get as holiday pay from Vox?

21. Sara works illegally • Sara and her two children came to Norway as refugees last year. • She gets an offer to work illegally as a cleaner. • Illegal or undeclared work is when you work without paying taxes. • Sara wants to make a lot of money quickly, and therefore believes that it’s worth accepting the offer. What do you think?

22. Sara works illegally and cannot get… • Family immigration and visits from her homeland • Social benefits (sick pay, unemployment benefits and maternity pay) • Bank loan • Holiday pay • Retirement pension • Contract of employment • Job-leaving document • Salary guarantee in case of bankruptcy

23. Is working illegally worth it? * Taxclass 2 gives a higherdeduction and lowertax ** Holidaypay is paidnextyear

24. Community consequences of undeclared work • Less money for health care, social security benefits, etc. • Higher taxes (VAT, excise duties and taxes on income) • Unfair competitive conditions for companies that follow the law

25. Information update… • Liliya is reunited with her husband. • She has taken business administration courses organized by NAV. • She now has a job as a legal officer for the municipality and has left the job as a cleaner. • Sara has been caught for working illegally and must pay additional tax on the amount of money she has earned. • For Sara's employer there will also be economic consequences. It may also lead to other penal reactions, such as penalties and imprisonment.

26. Liliya’s job-leaving document

27. Liliya’s husband has started to work and Liliya is no longer a single parent Forthetaxdeduction to be correct, shechanges her taxdeductioncard. Liliya changes her tax deduction card Salarypaid so far in 2010 Paidintroductionbenefits so far in 2010 The expectedsalary in the 2010 The expectedintroductionbenefit in 2010

28. Youget a job Yougetsalary Youget a certificateofpay and taxdeducted for 2009 Yougetyourtaxreturn for 2009 Yourecieveyourtax settlement for 2009 Summary 31.12.09 30.04.10 15.06.10 • A contract of employment is established with the employer • The tax deduction card is ordered at the tax office • A bank account is established • Paycheck from employer • The salary is paid to the bank account • Summary of salaries statements from each employer in 2009 • If not received by the beginning of February, contact your employer • Overview from the tax office of income, deductions, assets and liabilities • Make sure everything has been included and that all amounts are consistent with the statements received • If everything is correct you don’t have to send in your tax return. Any errors must be corrected and the tax return must be submitted by 30 April • Indicates whether too much or too little tax has been paid in 2009 • If too much tax has been paid, this will be refunded • If you have paid too little tax you’ll have to pay tax arrears

29. Electronic submission via Minside ( MyPage) • MyPage gives you access to various online public services such as the Tax Administration and the Norwegian Labour and Welfare Administration (NAV). • On MyPage you can submit various applications, forms and data. You may: • apply for or change your tax deduction card • submit your tax return (if you have corrections) • change your address in the National Population Register • get an overview of your expected old-age pension from NAV • To log on to MyPage you must have a Norwegian personal identification number and PIN codes from the Tax Administration. If you lack the PIN codes you can order them from the Tax Administration, i.e. at skatteetaten.no • See MyPage (minside.no) for more information on electronic submission.

30. Do you wish to run your own business? • If you start your own business you agree to certain obligations to the Norwegian authorities. • Get good information and enough knowledge before you start your business. • On altinn.no under ”Help with the rules” you will find information on running your own business. The tax office can also give you information. • In most larger municipalities, there are individuals who can assist you when you start your own business.

31. Who answers the questions? • Tax Collector (in your municipality) • Tax deduction • Certificate of pay and tax deducted • Tax settlement • Tax Office (in your municipality) • skatteetaten.no • taxnorway.no • PIN codes for MyPage • Tax deduction card • Preliminary estimation of tax • Tax return • Starting your own business

32. Who answers the questions? • NAV – the Norwegian Labour and Welfare Administration • nav.no • Available jobs • Vocational and educational guidance and counseling • Social benefits (sick pay, unemployment benefits, etc.) • Health services and GPs • The Norwegian Labour Inspection Authority (Arbeidstilsynet) • arbeidstilsynet.no • Holiday pay • Contracts of employment • Redundancies

33. Best ofluck in workinglife!