An Employer of Record (EOR) in Norway is a company that takes on the responsibility of being the legal employer for a worker. This includes managing payroll, benefits, and other employment-related tasks on behalf of the worker's actual employer.
An employer of record in Norway assist you with the following
- Draft local employment contracts
- Register employees with the social security agencies
- Withholding taxes
- Provide Benefits
- Comply with the local labor laws in Norway
- End to End Payroll
- Work Permit
- Hiring and Payments
Discover the key considerations and essential details you should be aware of before opting for an Employer of Record (EOR) in Norway to help you with your global staffing needs.
Employment Contracts in Norway
In Norway, having a written employment contract is mandatory, and there are specific minimum requirements that must be met in terms of its content.
Probationary periods are allowed in employment contracts, with a statutory limit of 6 months. During this period, employers have the opportunity to assess the suitability of the employee for the role.
For industrial, commercial, and office undertakings with more than 10 employees, it is necessary to have staff rules in place. These rules serve as guidelines for employees and outline the expectations and policies within the workplace.
In Norway, all employees must be registered with the State Register of Employers and Employees (EE-register). This registration ensures that both the employer and employee are recognized by the government and comply with relevant regulations.
By adhering to these regulations and requirements, employers and employees in Norway can establish clear and legally sound employment contracts that protect the rights and interests of both parties.
The Norwegian word for employment contract is Arbeidsavtale. In Norway, it is important to include the following details in the employment contract
- Job Title
- Working Hours and Average Working Hours Calculation
- Pay and Holiday Pay Supplement
- Work Location
- Pay for Night Work and Weekend.
- And important terms and conditions of the employment
As per The Norwegian Labour Inspection Authority, employers are required to provide the terms and conditions of the employment in writing within one month of the first working day.
Working Hours
The standard working hours in Norway is 40 per week and 9 hours per day. The Norwegian term for working hours is Arbeidstid. It is important in Norway to track the working hours for all employees including start time and end time.
Night work and weekend work are not allowed unless the nature of the work explicitly requires it. Some jobs include healthcare professionals, customer support, and more. Pay can be discussed and agreed upon in written form in the employment contract.
Overtime Pay
Employees in Norway are entitled to receive overtime pay, which is 40% of their regular pay. Additionally, employees have the option to take compensatory time off for the extra hours worked if they choose to do so. It is a common practice to document these terms in written format. Employees can either receive partial payment for the extra hours or opt for partial compensatory time off.
Minimum Wages
There is no legally mandated minimum wage in Norway. Starting June 2023, minimum wages were introduced in certain sectors as per the collective agreements. The minimum wage for skilled workers is NOK 238.30.
Payroll in Norway
In Norway, payroll is typically processed monthly and the salaries are paid in Norwegian local currency, Norwegian Krone (NOK).
Probation and Notice Period
The probation period in Norway can be up to six months. The notice period in Norway increases with relevance to the length of employment.
| Length of Employment in Months | Notice Period in Months |
|---|---|
| Less than 2 years | 1 |
| 2 to 4 years | 2 |
| 4 to 6 years | 3 |
| 6 to 8 years | 4 |
| 8 to 10 years | 5 |
| More than 10 years | 6 |
13th Month Salary
It is not legally mandated to pay 13th month salary in Norway.
Employee vs. Independent Contractors in Norway
- Determining Factors for Employee and Independent Contractor Classification
In Norway, the distinction between an employee and an independent contractor is based on whether the person performing the work tasks is considered an "employee" according to the 2005 Norwegian Working Environment Act ("Arbeidsmiljøloven"). Similar definitions also apply to tax treatment and benefit entitlements.
The classification of "employee" or "independent contractor" is determined through case law and is based on several key questions:
- Who is responsible for the result of the work? Independent contractors bear the risk of delivering a specific result, while employees are responsible for performing their work tasks to the best of their ability, leaving the responsibility for the result to their employer.
- Is the person obligated to follow the other party's day-to-day instructions? If the person performing the work tasks is obliged to follow the other party's instructions, they are likely considered an "employee."
- Is the person obligated to personally perform the work? If the person must personally perform the work, it indicates an employer-employee relationship. If they can delegate the work to someone else, they are more likely an independent contractor.
- Who is responsible for the necessary work tools and assets? If the person performing the work tasks provides their own tools, they are more likely an independent contractor. However, this can vary depending on the nature of the services provided.
- Does the person have multiple customers or work exclusively for one principal? If the person has multiple customers and the freedom to work for different parties, they are more likely an independent contractor. Working exclusively for one customer suggests an employee relationship.
- Differences in Tax Treatment
Employers are responsible for paying the Social Contribution Tax, calculated based on the salary paid to employees. Employees themselves are required to pay income tax. In contrast, independent contractors are responsible for paying their own taxes and value-added tax (VAT). - Differences in Benefit Entitlement
Employees are entitled to various benefits such as holiday pay, official sick pay, and pension benefits through the Social Benefits Act. Employers are also obligated to establish a private collective pension scheme for their employees. On the other hand, independent contractors are responsible for covering these benefits themselves. - Differences in Termination Protection
Independent contractors do not enjoy protection from termination, and their rights related to termination are solely based on the terms outlined in their contract. In Norway, employees are protected from unfair dismissal under the 2005 Working Environment Act. Dismissals must be objectively justified based on circumstances related to the enterprise, such as redundancies. Each employee's situation is evaluated individually based on criteria such as competence, seniority, personal suitability, and social aspects. - Limitations on Use of Independent Contractors
There are no specific limitations on the use of independent contractors in Norway. - Other Ramifications of Classification
The Working Environment Act sets regulations for maximum working hours, which apply to employees but not independent contractors. Employees are protected by the Norwegian Labour Inspection Authority, and violations can result in fines. Overtime work for employees must be limited, and appropriate supplements must be paid. - Leased or Seconded Employees
Temporary work agencies are commonly used in Norway to provide additional workforce to companies without employing the individuals directly. The hiring-out of employees is defined by the temporary agency providing employees to the requisitioner of labor, who assumes financial risk for the work's result. These employees are covered by the Temporary Agency Work Directive, ensuring similar salary and working conditions as if they were directly employed by the hiring company. - Regulations of Different Contract Categories
In Norway, different categories of contracts are defined by mandatory legislation in employment, tax, and social benefits laws. If an individual does not meet the criteria for employee classification, their relationship is regulated by general civil law. As a result, there are few specific cases related to these issues.
Overall, understanding the distinction between employees and independent contractors in Norway is crucial to ensure compliance with applicable laws, taxation requirements, and benefit entitlements.
Social Security in Norway
Employer National Insurance Contributions
Employer social security contributions are 14.1% of the employee’s gross salary if the wages are less than NOK 750,000.
Employer social security contributions are 19.1% of the employee’s gross salary if the wages are over NOK 750,000. Employers need to contribute an additional 5% if the wages are over NOK 750,000.
Employer contributions are based on the municipality and each municipality is assigned to a zone.
| Zone | Ordinary industries | Agriculture and fisheries |
|---|---|---|
| I | 14.1 % | 14.1 % |
| Ia* | 14.1 % | 10.6 % |
| II | 10.6 % | 10.6 % |
| III | 6.4 % | 6.4 % |
| IV | 5.1 % | 5.1 % |
| IVa | 7.9 % | 5.1 % |
| V | 0 | 0 |
| Additional Employer's national insurance contributions on wages over NOK 750,000 | 5.0 % | 5.0 % |
The details list of regions and zones can be found here: https://www.skatteetaten.no/en/rates/employers-national-insurance-contributions---zone-subdivision/
Employer Payroll Contributions in Norway
| Employers | % of Gross Salary |
| Social Security | Social Security (depending on zone) - up to 14.1% |
| Total Employment Cost | 14.1 |
Employee National Insurance Contributions
Employee social security contributions are 7.9% of the gross salary.
National Insurance contributions in Norway are assessed based on an individual's income type, age, and a lower income limit, with different rates applying to various income categories.
- Salary income, sickness benefit, etc. (persons aged 17 to 69): 7.9% This rate applies to individuals aged 17 to 69 who earn income from sources like salaries and sickness benefits.
- Salary and business income, pensions (persons aged under 17 or over 69): 5.1% This rate is for individuals under the age of 17 or over the age of 69 who earn income from salaries, business, or pensions.
- Primary business income within fishing/hunting or childminding: 7.9% Self-employed persons engaged in fishing, hunting, or childminding pay this rate on their primary business income.
- Other business income: 11.1% This rate applies to income from other types of businesses.
- Pension income, etc.: 5.1% Individuals receiving pension income or similar payments are subject to this rate.
There is also a lower limit in personal income or basis for calculating national insurance contributions, set at NOK 69,650. The contributions should never exceed 25% of the portion of personal income that exceeds this limit.
Additionally, self-employed persons engaged in fishing, hunting, or childminding in their own home (caring for children under 12 years of age or those with special care needs) pay a reduced rate of 7.9% for their business income. This reduced rate is linked to the fact that these industries pay a product tax to partially cover the difference between the 7.9% and 11.1% national insurance contribution rates.
Employee Payroll Contributions in Norway
| Employees | % of Gross Salary |
| Social Security | 8.2 |
| Pension | 5.1 |
| Total Employee Cost | 8.2 |
Employee Benefits in Norway
Public Holidays
- New Year's Day - 1st January
- Maundy Thursday - 1st April (Thursday before Easter Sunday)
- Good Friday - 2nd April
- Easter - 4th April
- Easter Monday - 5th April
- Labour Day - 1st May
- Ascension Day - 13th May (39 days after Easter Sunday)
- Constitution Day - 17th May
- Pentecost Sunday - 23rd May (50 days after Easter)
- Whit Monday - 24th May (7th Monday after Easter)
- Christmas Eve - 24th December
- Christmas Day - 25th December
- Second Day of Christmas - 26th December
- New Year's Day - 31st December
Paid Time Off |
|
|---|---|
| Vacation/Annual Paid Leave | Employees have 25 days of paid annual leave after 12 months. Holiday payment is 10.2% of the previous year's earnings. Longer holidays through agreements are possible. |
| Rollovers and Payout of Unused Hours | Employees can carry over accrued vacation days, but only if they have earned more than 20 days. Unused days can be held for up to 5 years. |
| PTO Payout at Termination | Not specified. |
Maternity Leave, Child Raising Leave, Parental Leave |
|
|---|---|
| Maternity Leave | Female employees are entitled to six weeks of leave after childbirth. |
| Paternity Leave | Fathers are entitled to two weeks of unpaid absence after childbirth. |
| Parental Leave | Parents are entitled to 12 months of leave during the first year of their child's life, not exceeding 12 months for both parents. Each parent has an additional unpaid leave of up to one year per child. |
| Adoption Leave and Foster Child Care Leave | The right to leave also applies to adoption and foster child care. |
Sick Leave |
|
|---|---|
| Sick Leave | Employers pay for the first 16 days of absence due to illness or injury. After 16 days, Social Security pays. |
| Child Care Leave | Paid leave for caring for a sick child up to age 12. |
| Family Care Leave | Up to 10 days of unpaid leave for caring for a parent, spouse, partner, or registered partner. Up to 60 days of leave for terminally ill relatives with care allowance. |
Bereavement Leave: It is a non statutory leave entitlement.
Personal Income Tax in Norway
| Income Tax | |
| below 190,350 NOK | 22% |
| 190,350 and NOK 267,900 | 22% + 1.7% bracket tax |
| 267,900 NOK – 643,800 NOK | 22% + 4% bracket tax |
| 643,800 NOK – 969,200 NOK | 22% + 13.2% bracket tax |
| 969,200 NOK – 2,000,000 NOK | 22% + 16.4% bracket tax |
| 2,000,000 NOK and above | 22% + 17.4% bracket tax |
Norway Overview
| Overview | |
| Continent | Europe |
| Country | Norway |
| Time zone | UTC+01:00 (CET) |
| Total Time zones | 1 |
| Working hours per week | 37.5 |
| Working week | Monday–Friday |
| Typical hours worked | 7.5 |
| Personal Tax filing deadline | 30th April |
| Financial Year | 1st January to 31st December |
| Capital | Oslo |
| Date format | dd/mm/yyyy |
| Currency | Norwegian Kronar (NOK) |
| VAT | the standard rate is 25% |
Conclusion
Employer of Record (EOR) services in Norway offer a comprehensive solution to the complex legal and administrative challenges of hiring and managing employees. By partnering with an EOR, businesses can streamline their operations, ensuring compliance with Norway's rigorous labor laws and social security system. These services simplify everything from employment contracts to tax withholding, providing a seamless experience for local and international workers while allowing organizations to focus on their core activities. Whether it's expanding into Norway or hiring foreign talent, EOR services ensure that businesses can navigate the intricacies of the Norwegian job market with ease, reducing administrative burdens and guaranteeing legal compliance.
Northern Europe: EOR Denmark | EOR Finland | EOR Iceland | EOR Norway | EOR Sweden