Hiring Talent And Managing Payroll In Norway

Hiring in norway? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Norway

Employment Norms in Norway

Norway has one of the highest employment rates in Europe, with a highly skilled workforce and a thriving economy. This guide provides an overview of employment norms in Norway, including working hours, leave entitlements, and employment contracts. Understanding Norway's employment standards is important for comprehending its labor market and laws. Employers can collaborate with EOR services to ensure legal compliance and manage their workforce effectively.

General Information:

The Norway currency is Norwegian Krone (NOK).
Oslo is the capital of Norway.
Norwegian is the official language of Norway, along with Sami and Kven. Legal documents can be drafted in Norwegian to be considered legally valid.
As of 2021, the GDP of Norway was reported to be USD 482.17 billion.

Norway's labor laws ensure employee rights and protections, including fair wages, maximum working hours, and mandatory paid leave.

Table of Contents

Select Section

Agreements
Onboarding Process
Visa
Minimum Wage
Payroll Cycle
Annual Bonus
Health Benefits
Working Hours and Overtime
Leaves
Social Security
Taxes for Employers
Taxes for Employees
Probation
Termination
Severance Pay
Employees or Contractors
Final Words

Agreements Onboarding Process Visa Minimum Wage Payroll Cycle Annual Bonus Health Benefits Working Hours and Overtime Leaves Social Security Taxes for Employers Taxes for Employees Probation Termination Severance Pay Employees or Contractors Final Words

Agreements

Here are some key points to keep in mind regarding agreements in Norway:

Collective bargaining agreements (CBAs) are negotiated between employers and labor unions and cover areas such as wages, working hours, and benefits.
CBAs are legally binding and enforceable, and they apply to all workers within the scope of the agreement, regardless of whether they are union members or not.
Employment contracts should be in writing and written in Norwegian.
Fixed-term contracts are allowed, but they must have a specific end date or a specific project completion date.
Termination of an employment contract must be based on valid grounds, and the employee must be given notice of termination or compensation instead of notice.
Discrimination in the workplace is prohibited, and employees have the right to file a complaint with the Equality and Anti-Discrimination Ombud.
Contracts are made in the Norwegian language.

Onboarding Process

In Norway, the employee onboarding process typically involves the following steps:

Provide the new employee with an employment contract written in Norwegian.
Register the new employee with the Norwegian Labour and Welfare Administration (NAV) to report their employment and obtain a tax deduction card.
Provide the new employee with information about their rights and obligations, including working hours, overtime, leave entitlements, and health and safety regulations.
Provide necessary training and orientation on company policies, procedures, and expectations.

Mandatory documents to be submitted during onboarding include:

A completed tax deduction card application form
A copy of the employee's identification documents, such as a passport or ID card

Visa

Norway has several types of work permits and visas available for foreign workers, including:

Skilled Worker Visa: for workers with specialized skills and qualifications.
Seasonal Work Visa: for individuals working in agriculture, forestry, and tourism industries for a limited period.
Working Holiday Visa: for individuals aged 18-30 who wish to work and travel in Norway for up to one year.
Student Visa: for international students studying in Norway who wish to work part-time during their studies.

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Minimum Wage

There are no statutory requirements for minimum wage in Norway.

Payroll Cycle

The payroll cycle is typically monthly

Annual Bonus

There is no statutory requirement for employers to provide an annual bonus in Norway, but it is a common practice in many industries.

Health Benefits

In Norway, employers are not required by law to provide health benefits to their employees, but it is common for many employers to offer some form of health-related benefits. Some common health benefits offered by employers in Norway may include:

Health insurance coverage
Dental care coverage
Paid sick leave
Access to company wellness programs, including gym memberships or fitness classes
Occupational health services

Working Hours and Overtime

Work hours: The standard workweek in Norway is 37.5 hours, with normal working hours of 7.5 hours per day.
Break:Employees are entitled to a minimum of 30 minutes of break time for every 5.5 hours worked.
Overtime: The maximum amount of overtime allowed is 200 hours per year. Overtime is compensated at a higher rate than regular work hours, typically 50% above the regular hourly wage.

Leaves

Sick Leaves

In Norway, employees are entitled to sick leave benefits, which typically cover up to 100% of the employee's salary for up to 52 weeks.
Employers are required by law to provide sick pay for up to 16 days per year, after which employees may be eligible for sick pay from the National Insurance Scheme.
A doctor's certificate is mandatory from 4th consecutive sick leave.

Parental leaves

Maternity leave is paid by the social security scheme and can be taken in 2 ways
- 44 weeks with 100% pay
- 54 weeks with 80% pay.
Paternity leave/parental leaves can be transferred from birth mothers for up to 22 weeks.

Annual leaves

In Norway, employees are entitled to a minimum of 25 days of paid vacation per year, in addition to public holidays.

Non-unionized workers: 25 days
unionized workers: 35 days.

Other Leaves

Education leaves - an employee is entitled to 3 years of unpaid education leave given they have at least worked 3 years with their employer.

Public Holidays (for the Calendar year 2024)

Some dates may vary based on official notifications and traditional calendars.

1st January: New Year's Day
28th March: Maundy Thursday
29th March: Good Friday
31st March: Easter Sunday
1st April: Easter Monday
1st May: Labor Day, Flag Day
17th May: Constitution Day (1814), Flag Day
9th May: Ascension Day
19th May: Whit Sunday
20th May: Whit Monday
25th December: Christmas Day
26th December: Boxing Day

Public Holidays (for the Calendar year 2025)

Some dates may vary based on official notifications and traditional calendars.

1st January: New Year's Day
18th April: Maundy Thursday
19th April: Good Friday
20th April: Easter Sunday
21st April: Easter Monday
1st May: Labor Day, Flag Day
17th May: Constitution Day (1814), Flag Day
29th May: Ascension Day
8th June: Whit Sunday
9th June: Whit Monday
25th December: Christmas Day
26th December: Boxing Day

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Taxes for Employers

In Norway, employers are required to pay a variety of taxes, including:

National insurance: 14.1%
Mandatory holiday pay: 12%
Pension Contributions: Employers are required to contribute to an occupational pension scheme for their employees. The contribution rate is 2%.
Value Added Tax (VAT): The standard VAT rate is 25%.
Accident insurance: NOK 1500.

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Taxes for Employees

In Norway, employees are required to pay various taxes, including:

Income Tax: The income tax rates range from 0% to 22% for the lowest income bracket, and up to 38.2% for the highest income bracket.
- 22%: Up to 184,800 NOK
- 23.7%: 184,800 - 260,100 NOK
- 26%: 260,100 - 651,250 NOK
- 35.2%: 651,250 - 1,021,550 NOK
- 38.2%: 1,021,550 NOK and above
Social Security Contributions:8.2%
Pension Contributions: 5.1%

Probation

The probation period is generally agreed upon in the employment contract and can range from one to six months.

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Termination

The following points outline the key aspects of the termination of an employment contract in Norway.

An employment contract in Norway can be terminated by either party.
Termination can be with or without notice based on the situation.
An employer can terminate the contract for reasons like redundancy, poor performance, or disciplinary reasons.
Employees can also terminate contracts with or without notice, but it must not violate any employment laws or regulations.
A valid reason must be provided by both parties for the termination.
Termination cannot be discriminatory or against the terms of the employment contract.
In certain situations, the employer may need to provide severance pay or notice pay to the employee.

Severance Pay

In Norway, there is no statutory requirement for employers to provide severance pay to employees upon termination.

Employees or Contractors

In Norway, there are specific regulations that determine whether an individual is classified as an employee or contractor.
The consequences of misclassifying an individual can be significant and include financial penalties, interest, and back pay.
Employers who misclassify an employee as a contractor may be liable for unpaid taxes, social security contributions, and other benefits owed to the employee.
Misclassifying a contractor as an employee may result in the employer being required to pay benefits such as holiday pay, sick pay, and pension contributions.

Final Words

In conclusion, Norway has a well-established system of employment norms and regulations that aim to protect the rights and benefits of employees. Despite the relatively high cost of living in Norway, the country offers numerous employment opportunities across a range of industries, with a strong emphasis on work-life balance and employee well-being. With its stable economy, high standards of living, and supportive social welfare system, Norway remains an attractive destination for job seekers from around the world.