Norway Payroll Solutions

Contractors in Norway can be set up in 2 ways, Employed and Self Employed.

The employed solution is the preferred model for Norway. The use of self-employment is allowed if genuine, however it must be emphasised here that businesses in Norway prefer to engage employees rather than independent contractors.

Tax year – The tax year is the calendar year for individuals

Immigration – Nationals of the EU/EEA and Switzerland can live and work in Norway without having to obtain work or residence permits, however they must register with the Norwegian authorities if staying in country for more than three months.

Workr Fees – €575 per month plus €350 set up fee. This applied to both the employed and self-employed solutions

Employment Summary

Registration – The relevant registrations for income tax and SS will be carried out prior to the worker commencing the
employment.

Contract – A written contract will be provided as early as possible. Open ended contracts are the norm but fixed-term
contracts can also be used.

Employers social security contributions are 14.1%. Employers must also arrange early retirement pension scheme
(stipulated by CBA): 2% of the employee’s pay.

Employees social security contributions are 8.2%.

Tax – There are 2 types of tax in Norway.

Tax on ordinary income which is a flat rate of 22%.

Then a Bracket tax which ranges from 1.7% to 16.2% depending on your income level.

Foreign workers may be eligible to opt for the PAYE scheme in Norway which has a fixed rate of 25% to cover both income tax and social security. The criteria are:

  • you’re a foreign worker who works in Norway for short periods of time, or
  • you’re a foreign worker who works in Norway and it’s the first year in which you’re a resident in Norway for tax purposes,
  • you earn less than NOK 639,750 per year (applies to the 2020 income year)

Benefits – Holidays: most employees are granted 25 working days, with holiday pay being 12% of all wages paid during the qualifying year.

10 public holidays, of which at least two are guaranteed as days off at full pay (if they don’t fall on a Sunday).

16 days sick leave paid by the employer.

Notice period: one month’s notice (for employment lasting less than five years).

Self-Employment Summary

Registration – Self-employed contractors will be correctly registered with the tax and social security authorities and have a VAT number. The Norwegian Tax Administration will only accept an self-employed registration if the work is carried out on the person’s own account and at their own risk, based on a specific scope and duration. The self-employed person has no right/entitlement to receive other assignments from a client, has the ability to send a replacement/substitute and the client has no right to instruct the worker as to the way in which the services are to be carried out.

Contract – An open ended or a fixed-term contract can be used in Norway.

Social Security – SS rates are 11.4%

Tax – There are 2 types of tax in Norway.

Tax on ordinary income which is a flat rate of 22%.

Then a Bracket tax which ranges from 1.7% to 16.2% depending on your income level.

The PAYE scheme is not available under self-employment.

Benefits – As long as original receipts are provided, a contractor can claim for expenses related to costs of a
second/temporary accommodation in country and costs for travel.

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