Payroll in Norway

Mercans is your premier choice for top-notch payroll services in Norway. With our unwavering commitment to excellence, we deliver accurate and compliant payroll solutions tailored to businesses of all sizes. Benefit from timely and precise payroll transactions, along with the convenience of multi-currency payments in the Norwegian market. Count on Mercans as your dedicated local payroll provider in Norway, supported by our team of in-country specialists with extensive knowledge of local laws, ensuring a seamless payroll experience aligned with your business requirements.

Payroll Cycle, Working Hours and Overtime

Payroll Cycle

Mercans supports various payroll frequencies, including monthly, bi-weekly, semi-monthly, weekly, and quarterly, based on client preferences.

Additional Payroll Types: Clients can request advance payment runs, supplemental salary runs, or bonus runs, with all standard and client-specific reports generated accordingly.

This structured approach ensures accuracy, compliance, and timely processing of payroll, meeting the diverse needs of clients in Norway.

Working Hours

Typically, standard working hours in Norway adhere to the following guidelines:

• 9 hours within a 24-hour period (normal workday)
• 40 hours over 7 days (standard workweek)

Overtime

In Norway, work exceeding agreed hours but within statutory limits is considered “added work,” distinct from overtime. Overtime, starting after these limits, requires a minimum 40% supplement on top of the regular salary, with higher rates possible per collective agreements. While overtime hours can be compensated with time off, the supplement must be paid. For instance, if Ola works four extra hours beyond his agreed time, he receives added work pay for the first hour and both hourly pay and a 40% supplement for the remaining three hours.

Minimum Wages and 13th Month Salary

Minimum Wages 

In Norway, there isn’t a universal minimum wage across all industries and professions. However, specific sectors have implemented minimum wage standards through collective agreements, such as for skilled workers, currently set at NOK 238.30, up from NOK 230.00 previously (15.12.2022–14.06.2023).

13th Month Salary

There is no mandatory requirement to pay the 13th or the 14th month’s salary.

Company Setup in Norway 

When establishing a business in Norway, registration with the Brønnøysund Register Centre is mandatory. This registration provides a Norwegian organization number necessary for various purposes, including setting up a bank account, generating sales invoices, contacting public authorities, and fulfilling statutory obligations.

Choose Your Company Type

Sole Proprietorships

• Unlimited personal liability.
• Owned by a natural person, operating at personal risk.
• Owner cannot be an employee.
• Inferior social security rights.
• Not a separate legal entity, less investor-friendly.
• No equity requirements.

Private Limited Company (AS or ASA)

• Limited personal liability.
• Rights as an employee.
• Separate legal entity, investor-friendly.
• Requires a minimum share capital of NOK 30,000.
• Owner may need additional security for loans.
• Owners can be employees, entitled to social security rights.

Norwegian Branch of a Foreign Company (NUF)

• No equity requirements.
• Subordinate to the foreign company.
• Must follow Norwegian rules.
• Registration in the Register of Business Enterprises required for commercial activities.
• Optional registration in the Register of Legal Entities.
• Registration in the VAT Register if sales exceed NOK 50,000 in a twelve-month period.

Income Tax Entity

• Subject to a corporate income tax of 22% on net income.
• Tax liability may be limited for NUFs run from another country.
• Assessment of tax liability based on specific circumstances.
• Advance tax payments depend on the organizational form.
• For private limited companies (AS) and (NUF), advance tax is due in two equal installments on 15 February and 19 April of the following year.
• Notifications and submissions are done through the Altinn web portal.

Setting up a business involves choosing the appropriate company type based on factors like liability, legal entity status, and tax considerations, with the registration process and requirements varying accordingly.

Payroll Processing in Norway

Mercans standard payroll processing in Norway includes the following

• Once Payroll has been submitted for Processing, Mercans processes payroll conducting checks and validations mentioned in this document and Mercans – Payroll Audit Checklist.
• Mercans ensures that the payroll calculations processed by Mercans are in accordance with the applicable statutory regulations, Client-specific calculations rules and Payroll Processing Timetable. 
• After payroll results and reports have been validated and checked, standard payroll reports are posted to PAC Payroll view Payroll Reports section.
• Client reviews posted reports to validate correctness of the payroll.
• If any corrections are needed Client Rejects Payroll in PAC Payroll view. Mercans Notification Center informs both parties of Payroll rejection and Mercans re-opens payroll for inputs. This action opens PAC for inputs and payroll processing moves back to step 8 of the previous section.
• If no corrections are needed, Client Approves Payroll in PAC Payroll view.
• Approving Payroll closes the payroll for any further changes.
• Approving Payroll is preceded by generating Bank/ payment files. Value date for the Bank/payment file is input by Mercans before generation of the file.
• Client reviews and releases Bank/payment files.
• Client informs Mercans on the Pay-date to post Pay slips to ESS. Pay-slips are posted only for the employees who have access to ESS.
• Mercans re-generates Pay-slip Summary Report including data on Pay-slip Submission to ESS, issues service fee invoice and posts these to Secure File Transfer portal.
• Payroll period is closed by Mercans once the off-cycle payrolls (if any) have been processed successfully.

Payroll Taxes in Norway

Income Tax

Norwegian tax legislation distinguishes between full tax liability for resident taxpayers and limited tax liability for non-resident taxpayers. Residents are liable to income tax on their worldwide income, whereas non-resident taxpayers are only subject to income tax on specific types of income from Norwegian sources.

To simplify reporting and compliance for temporary employment in Norway, a pay-as-you-earn (PAYE) system is introduced and in force from 1 January 2019. The PAYE scheme is applicable for limited tax liable non-resident workers, except workers offshore and seamen on ships, who have a salary below bracket tax level 3 (for the 2023 income year, the maximum amount is NOK 644,700, for 2024 the maximum amount is NOK 670 000). The rate is a flat 25% rate (includes social security contributions). Where PAYE applies, deductions are not applicable.

If PAYE applies, the workers are not in need of an individual tax return. The tax is final at payment and is, therefore, not subject to change.

Where an individual is tax liable to Norway only a part of the income year, the income is annualised. The same applies for certain deductions (i.e. personal deduction and minimum deduction, see the Deductions section).

The Norwegian income tax system for individuals is based on a dual tax base system: general income and personal income.

Bracket Tax Rates on Personal Income

General income is taxed at a flat rate of 22%. The general income tax base comprises all categories of taxable income (i.e. income from employment, business, and capital). Tax allowances, expenses, and certain losses are deductible when computing general income. The taxes on general income are the county tax, the municipal tax (Norway is divided into 11 counties and subdivided into 356 municipalities), and the state tax.

Bracket tax on personal income applies to income falling within specified ranges. These rates vary from 1.7% to 17.6%, depending on the income level. Personal income includes earnings from employment, pensions, self-proprietorship, and certain partnership remunerations.

Social Security

Social security in Norway is managed through the National Insurance Scheme, which is mandatory for individuals who work and pay taxes in the country. Membership in the scheme is facilitated by employers, with temporary foreign workers exempted from membership.

As a member of the National Insurance Scheme, you gain access to various benefits and health services provided by NAV (Norwegian Labour and Welfare Administration). These benefits are available to individuals who contribute to the scheme through their employment.

In addition to providing benefits and services, the National Insurance Scheme is governed by the Social Security Law, which outlines the framework for benefits and payments within the scheme.

Financing for the National Insurance Scheme comes from various sources, including individual and employer contributions, as well as grants from the state and municipalities. Self-employed individuals contribute at a higher rate (11.4%) compared to employees (8.2%), while employers are required to pay a contribution of 14.1% on salaries and other compensations. These contribution rates are established by the Parliament through annual decrees on National Insurance Scheme contributions.

National insurance contributions are calculated based on personal income, calculated on gross income before any deductions entitled to the employee are applied. Individuals earning less than NOK 54,650 annually are exempt from national insurance contributions.

Payroll Compliance in Norway

Statutory Filings

In Norway, employers are obligated to submit the following statutory filings. Mercans assists you in completing the necessary filings as per the Norwegian local laws.

Below is a summary of various payroll reports, detailing their authorities, frequency, and filing methods:

A-melding (A01/A02)

• Authority: Norwegian Tax Administration
• Frequency: Annually
• Online Filing: Available
• Manual Filing: Not Applicable
• Description: A comprehensive report mandated by the Norwegian Tax Administration, submitted annually to cover essential payroll-related data. It offers online filing options for streamlined reporting.

Self-reported sick leave (RA-0182)

• Authority: Statistics Norway (SSB)
• Frequency: Periodically
• Online Filing: Available
• Manual Filing: Not Applicable
• Description: This report, required periodically by Statistics Norway, focuses on self-reported sick leave data. Employers can file online, simplifying the reporting process and ensuring accurate data submission.

Salary and pension cost (RF-1022):

• Authority: Norwegian Tax Administration
• Frequency: Monthly
• Online Filing: Available
• Manual Filing: Not Applicable
• Description: The RF-1022 report, mandated monthly by the Norwegian Tax Administration, encompasses salary and pension cost data. It provides online filing options for efficient reporting and compliance with regulatory requirements.

Income report to NAV (NAV 08-30.01):

• Authority: Norwegian Labour and Welfare Administration (NAV)
• Frequency: Periodically
• Online Filing: Available
• Manual Filing: Not Applicable
• Description: Required periodically by the Norwegian Labour and Welfare Administration, this report focuses on income-related data for benefits processing. It offers online filing options and ensures timely and accurate reporting to NAV.

Employee Benefits in Norway

Mandatory Benefits in Norway

Medical Coverage

• Health care is primarily funded by the government, offering comprehensive coverage considered among the world’s best.
• Private health insurance, though not obligatory, may be provided by some employers but is not standard.

Pension

• Employers are required to contribute to employees’ supplementary pensions, in addition to government old age insurance.
• Mandatory contributions are based on a percentage of the employee’s salary, with defined rates determined by law.

Work Injury Insurance

Employers must contribute based on assessed employee insurance costs, which vary according to the level of risk.

Non-Mandatory Benefits in Norway:

Working from Home (WFH)

• Increasingly common, WFH arrangements are flexible, with some employers requiring office presence for a set period initially.
• Written agreements outline WFH terms, including working hours, equipment ownership, and trial periods.

Life Insurance

• While not obligatory, many employers offer life and health insurance to cover accidents or incapacity.

Supplementary Health Insurance

• Some companies provide additional health insurance, including dental and vision coverage, as employee perks.

Stock Options

• Often offered by startups, stock options can be taxed either at the time of exercising or when shares are sold.

Free Meals

• Common in the tech industry, subsidized or free meals are taxable benefits for employees.

Paid Relocation

• Tech companies may cover relocation expenses for new hires, although this is not standard.

Flexible Working Hours

• Employers may implement flexible hours to promote work-life balance for employees.

Gym Memberships

• Some companies subsidize or reimburse employees for gym memberships.

Public Transportation Reimbursement

• Reimbursement for public transportation costs to commute to work may be provided by some employers.

Cash Bonuses

• While not mandatory, bonus plans, including year-end or performance-based bonuses, may be offered.

Additional Days Off

• Some companies provide extra days off beyond statutory holidays and vacation allowances.

Additional Payment During Parental Leave

• Employers may compensate for the difference between parental leave pay from the National Insurance and the employee’s regular salary, up to certain limits.

Other Benefits in Norway:

Mobile Phone and Other Electronic Communication Means:

• Some employers provide mobile phones or reimburse expenses related to electronic communication for work purposes.

Insurances

• Additional insurance coverage beyond mandatory requirements may be offered by employers.

Company Car

• Certain employers may provide company cars for employees, although this is not standard practice.

Use of Private Car

• Reimbursement for the use of a private car for work-related travel may be offered by some employers.

Gifts from Employer

• Employers may provide gifts to employees as a form of recognition or appreciation for their work.

Bonus Points Earned in Connection to Work

• Employees may earn bonus points or rewards in connection to work-related activities, such as business travel or client meetings.

Paid and Unpaid Leave Policy in Norway

Paid and Unpaid Leave

In specific circumstances, employees have a legal entitlement to take leave. Whether the leave is paid or unpaid depends on various factors, including the type of leave and the reason for it. Often, leave is fully or partially covered by benefits from the Norwegian Labour and Welfare Administration (NAV), either directly to the employee or as a reimbursement to the employer. However, in certain cases, the employer is required to cover the employee’s salary during the leave period.

Statutory Leave Laws in Norway

PTO (Paid Time Off)

• Employees are entitled to paid vacation leave under the Annual Holiday Act, which guarantees 25 days of paid holiday per year, equating to four full weeks and one day. Holiday pay amounts to 10.2 percent of the previous year’s annual wages.
• Longer vacation periods may be granted through individual or collective agreements, with main collective agreements providing for five weeks of holiday.
• Holiday dates must be agreed upon in consultation with trade union representatives.

Maternity Leave, Child Raising Leave, Parental Leave

• Maternity leave grants female employees up to six weeks of leave following childbirth.
• Parental leave entitles parents to a total of 12 months’ leave during the child’s first year of life, with 10 weeks reserved for each parent.
• Fathers are entitled to two weeks of paternity leave following childbirth.

Adoption Leave and Foster Child Care Leave

• The right to leave also extends to adoption and foster child care situations.

Sick Leave

• Employers must provide payment to employees for the first 16 days of absence due to illness or injury.
• Beyond the initial 16 days, Social Security assumes responsibility for paying the employee.
• Employees must provide a doctor’s certificate for absences lasting four or more days.
• Self-certification (Egenmelding) may be used for absences of up to three calendar days at a time, up to four times per 12-month period.

Child-Care Leave

• Parents are entitled to up to 50 days of leave in one calendar year to care for their children.

Family Care Leave

• Employees are entitled to up to 10 days of unpaid leave to care for family members, with additional leave granted for caring for terminally ill relatives.

Jury Duty Leave, Voting Leave, Bereavement Leave, Military Leave

• These types of leave are not specifically regulated by law and may be subject to company policies or collective agreements.

Benefits of Payroll Outsourcing in Norway

In Norway, our Payroll services are driven by a robust tool strategically designed to operate seamlessly across diverse countries, ensuring regional uniformity and meeting our clients’ specific requirements. This tool reflects our commitment to delivering:

• Stringent Security Measures: Incorporating industry-leading security measures to safeguard sensitive data, with ISO 27001 and ISAE3402 certifications ensuring strict adherence to information security protocols.
• Consistent Performance: Ensuring consistent and sustainable performance that meets the dynamic demands of payroll services.
• Flexibility and Scalability: Offering flexibility and scalability to accommodate evolving client needs and adapt to changing business environments.
• Collaborative Cloud Platform: Utilizing a Cloud-based platform that facilitates collaborative work, promoting efficiency and accessibility across teams.

Our adherence to ISO 27001 and ISAE3402 certifications underscores our commitment to maintaining the highest standards of information security and operational integrity.

Key Features of Electronic Payroll Support in Norway:

• Full Traceability: Enabling a traceable process from generation to transmission and validation, with meticulous validation by our expert team ensuring consistency between stored information and that accepted by regulatory bodies.
• Efficiency in Human Resources: Enhancing the efficiency of the human resources area by streamlining the payroll settlement process, resulting in significant time savings through optimized use of our electronic payroll support.
• Certified Suppliers: Partnering with certified suppliers who uphold the highest standards of information security with ISO 27001 certification, ensuring secure data transmission processes that bolster the integrity of our services.

In Norway, Mercans ensures that our clients not only benefit from a state-of-the-art payroll tool but also enjoy the peace of mind that comes with top-tier information security standards upheld by ISO 27001 and ISAE3402 certifications.

Payroll Solutions in Norway

Unlock the potential of seamless payroll processing in Norway with Mercans’ Global Payroll Solutions. Our adaptable models guarantee local compliance, facilitate multi-currency transactions, and integrate seamlessly with global Human Capital Management (HCM) and Enterprise Resource Planning (ERP) systems. Ensuring accurate payments has never been easier.

Discover Our Flexible Models:

• SaaS (Software as a Service): Customized for enterprise businesses managing multi-country payroll with diverse data points, locations, currencies, and languages. Our SaaS model streamlines operations for maximum efficiency.
• Managed Services: Tailored for mid-sized and large enterprise businesses, our Managed Services model supports multi-country payroll operations. It provides access to on-demand HR expertise, ensuring security, reliability, and compliance.
• HRMS (Human Resource Management System): Ideal for mid to large businesses expanding their operations, our HRMS model offers a comprehensive suite of functionalities, including payroll and benefits management. Clients can choose the specific features they require, ensuring a tailored and effective solution.

Streamline Payroll with Mercans’ Technology and Integrations

Mercans leads the way in providing outstanding payroll services in Norway, offering a diverse range of tailored solutions to meet our clients’ unique needs. Choose Mercans as your reliable partner, ensuring a smooth and effective payroll process in Norway’s dynamic business environment.

• Innovative Technology: Experience the forefront of innovation with Mercans’ state-of-the-art technology driving our global payroll solutions. Learn more about our technological advancements here.
• Seamless Integrations: Effortlessly integrate your Human Capital Management (HCM) systems with Mercans’ solutions, enhancing efficiency and connectivity. Discover the benefits of integration here.
• Recognized Excellence: Partner with a recognized leader in the field. Mercans has been honored for its dedication to delivering exceptional payroll services. Explore our awards and recognitions here.

Outsource to Payroll Company in Norway

In the dynamic and evolving landscape of business in Norway, Mercans offers a suite of tailored solutions to navigate the unique requirements of our clients. With its stable economy, innovative culture, and skilled workforce, Norway presents abundant opportunities for growth and expansion. Mercans stands ready as your trusted partner, ensuring a seamless and efficient journey through Norway’s business terrain.

Our commitment to 100% local compliance, deep understanding of Norwegian labor laws, and comprehensive service offerings make us the ideal ally for businesses looking to thrive in Norway. By choosing Mercans, businesses can leverage our expertise to streamline operations, adhere to regulatory requirements, and establish a solid foundation for success in this dynamic market. With Mercans by your side, embark on a path of prosperity and achievement in Norway.