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Mercans CountryIntel ® Norway Payroll And HR Insights

Mercans offers complete payroll, PEO and HR services in Norway

Norway has been repeatedly ranked “the best country to live in” by the United Nations Human Development Report, based on its levels of education and income and other key factors.

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Doing Business in Norway

Norway has an abundance of renewable energy and world-class industries within the oil and gas, maritime and seafood sectors. New green industries are being developed such as floating wind, zero-emission shipping and carbon capture. Although not a member of the EU, Norway is integrated in the European single market. Additionally, Norway ranks among the top ten countries in the world on the world happiness ranking, the world talent ranking, the world competitiveness ranking, the environmental performance index and the ease of doing business ranking.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Norway is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.

Banking

Banks are open from Monday-Thursday 9 am-3:15 pm and on Friday from 9 am-5 pm

Working Week

The standard working week is a 9-hour workday or 40 hours over a 7-day period

Labor Law

While an employer can decide on who they wish to employ, there are exceptions to this right including the fact that it is illegal to discriminate against applicants based on gender, pregnancy, parental leave, ethnicity, religion and other factors. The general rule is that employees must be employed on a permanent basis but temporary appointments may be allowed in certain circumstances.

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Main Industries

Shipping, food processing, shipbuilding, metal, chemicals, mining and fishing

GDP Growth

3.80%

Dates & Numbers

dd/mm/yyyy

Official State Name

The Kingdom of Norway

Population

5.379 million

Capital

Oslo

Major Languages

Norwegian

Currency

Norwegian krone (kr)

Internet Domain

.no

International Dialing Code

+47

Norway
Oslo, NO
10:22 am, December 2, 2022
1°C
overcast clouds

Payroll

Employers must deduct tax from the salary paid to employees and all amounts deducted must be stated in the employee’s tax deduction card (digital). Multinational organisations who manage global payroll including in Norway should take note that they must ensure the provision of occupational pension for their employees. The minimum pension rate is 2% of gross salary. Holiday pay on salary and other work remuneration must also be calculated and set aside by employers. At the end of the year and before 1 February, the employer must provide each employee with an annual summary of all the information reported to the authorities.

It is acceptable to provide employees with online payslips

Payslip

Payroll reports must be kept for 7 years

Reports

4 weeks and 1 day of paid holiday each calendar year

Annual Leave

Sickness benefit for up to 1 year. The first 16 days are paid by the employer.

Sick Leave

Parents are entitled to a total of 12 months' leave in connection with the birth (including after birth)

Maternity & Paternity Leave

An employer is not required to issue a warning before an employee is dismissed, and there is no at-will employment in Norway.

Employee Termination

Performance based bonus at the employer’s discretion

13th month salary

189,39 NOK per hour

Minimum Wage

Minimum of 40% of the agreed hourly pay

Overtime

There is no statutory right to severance pay in Norway

Severance Pay

Tax and Social Security

Transparent and easy to understand, the Norwegian corporate tax system imposes a corporate income tax of 22% on net income. The Social Security Law addresses a range of benefits and payments to the National Insurance Scheme.

Tax

The main taxes for corporations are corporate tax, National Insurance contribution and zones which may have a lower level of tax. The rate for calculating the employer’s National Insurance contributions varies between 0 and 14.1% depending on where the enterprise is located. Norwegian incorporated companies do not have to pay wealth tax on their net assets. While Norwegian tax rules do not offer many incentives, there is an R&D incentive scheme called SkatteFUNN which offers tax credit for R&D costs.

A d-number can be assigned to a foreign worker who does not have a Norwegian National ID number and who needs an identification document for communicating with Norwegian authorities. This number is also necessary to obtain a tax deduction card.

22%

Corporate Income Tax

38%

Personal Income Tax

25%

Sales Tax

25%

VAT

Social Security

The primary general social insurance schemes in Norway are the National Insurance Scheme, the Family Allowance Scheme and the Scheme providing a cash benefit for families with small children.

22.3%

Social Security Rate

14.1%

Social Security Rate for Employers

8.2%

Social Security Rate for Employees

Employment Law

Employers have several key obligations towards their employees including those laid down in the Working Environment Act, the National Insurance Act and the Annual Holidays Act. An employer is entitled to lay off employees in the event of a temporary shortage of incoming orders, accidents or natural events which render restrictions or stoppages necessary.

Employment agreement

All employees must have written employment contracts and this requirement applies to permanent positions, temporary appointments as well as casual workers. The Norwegian Labour Inspection Authority has prepared a standard employment contract which fulfils the minimum requirements for the scope of an employment contract.

Working condition

All employees must be provided with a safe and appropriate working environment that meets the regulations of the Working Environment Act. The law takes a stringent approach to HSE (health, safety and environment) and requires all enterprises to have written descriptions of the HSE targets, routines for dealing with defects and deficiencies and what work must be done and timeframe for it.

Leaves

In certain cases, employees have a statutory right to leave. Whether an employee is entitled to paid or unpaid leave will depend on which leave is applied for and the reason for the leave. There are many different statutory entitlements for leave including for pregnancy check-ups for pregnant women, leave upon take-over of foster child, illness of a child, end of life care, military service and much more.

Employment termination

Employees may be made redundant if there are objective grounds for the redundancy. The Working Environment Act mandates rules regarding discussions which need to occur prior to decisions concerning redundancy. Employees may also have their employment terminated when they reach the age of 72. A lower age limit can be set (not less than 70) provided the limit is notified to employees and practised consistently.

Nil

Minimum notice period for terminating an employee

13

Total number of public holidays

14

Working hours per week

3 days

Total number of days for Compassionate & Bereavement Leave

Immigration

If employers wish to employ foreign workers, they must first check their eligibility to work in Norway. Foreign nationals wishing to work in Norway must generally have a residence permit. The rules vary depending on the country the worker comes from.

Residency permits

There are different rules applicable to employers depending on whether they wish to employ an EU (European Union) or EEA (European Economic Area) national or someone from a country outside the EU/EEA. An EU/EEA national can apply for a residency card or apply for permanent right of residence. If an individual wants to work in Norway, a residence permit is required. If the individual comes from a country outside the EU/EEA and wishes to work in Norway, a residence permit for work (previously called a work permit) must be applied for.

Work Permit validity

2 years

Required Documents

Invitation letter from the Norwegian company that you will be visiting, their address details and the dates of your visit

certificate from your employer stating that your business travel is permitted

Latest six month business bank statement

Memorandum and Articles of Association in original certified copy (registered with joint stock companies), Trade License and Proprietorship/Partnership documents

Regarding the applicant’s expenses during their stay in the Schengen zone, either the employer or the partner company must outline the coverage of expenses on the letter or invitation itself.

Compliant, reliable, error-free and touchless payroll in Norway

Build the best team and hire top talent compliantly in Norway. Get in touch with Norway payroll outsourcing & PEO specialists for a free consultation!

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This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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