Norway

Social security -  14.1% (can be lower for some sparsely populated areas)

Supplementary pension - 2% - 25.1%

Social security: 8%

Income tax: 22% + the following progressive supplements

While there are generally four ways of employing people across borders, not all are legal or sensible. Here is an overview of each way to employ a worker in Norway, outlining the potential cons.

HQ country employment & payroll

While the person is in Norway, they are employed and paid directly by the company’s HQ entity.

Cons: This may appear attractive, but it generally isn't legal in the long term. HQ payroll won't be possible if the person is not a tax resident in the HQ country.

Independent contractor agreements

People are locally registered as sole traders or limited liability company owners in Norway and invoice for their work. There is no direct employment relationship.

Cons: In Norway, this is not a compliant or legal way to engage full-time workers who work solely for your company. There will be challenges in attracting and retaining talent.

Direct local employer setup

The company sets up as a fully-compliant local employer. This often involves setting up a local entity and local tax registration.

Cons: Expensive, time-consuming, high-level of complexity. Unknowns around how obligations and costs will evolve over time. There will be a need to stay on top of changes in regulations.

Employment through a local entity established for the purposes of employment/professional employer organization

Employment is handled by a company that specialises in employing people on behalf of customer companies. That company signs the employment agreement directly with the employee, stating that the employee will provide services for the client company.

Cons: The ongoing costs may be higher than direct employment. Some education is needed to inform employees about how the employment relationship will work. The setup comes with certain limitations.

Setting up a local company in Norway is relatively straightforward. However, the difficult part comes after the initial setup when payroll needs to be calculated and run every month, taxes filed, benefits extended, change of rules and regulations followed. Here is an overview of everything you will find yourself needing to do.

While many employers practice employing remote workers as independent contractors, it's a bad practice. If an individual is giving their full and undivided attention to your company in Norway, treating them as an independent contractor is a likely breach of Norwegian employment laws and of those in your country.

Your company could be liable for fines on owed holiday pay, sick pay, social welfare payments, paternity benefit, maternity benefit, or other legal measures. Since the individuals you are working with do not receive the benefit of local employment laws and protections that are often afforded to people working full-time hours.

Read more on why hiring remote people as independent contractors is a bad idea.

When you hire employees in Norway, you have certain obligations as an employer. HR compliance is about ensuring your policies and procedures respect all applicable laws and regulations regarding employment and work practices. Complying with Norwegian labour law is fundamental for the correct running of your business - not only because these laws are in place to protect employees and guarantee their rights are safeguarded, but to minimise your risk of liabilities as an employer. Being compliant means respecting and following all local labour laws, sick leave and illness benefits, annual leave, minimum wage, tax credits,and working hours regulations.

As with every other country, certain costs are associated with employing a worker in Norway that come on top of the gross salary you are offering. A Norwegian employer must make social security and supplementary pension contributions based on each employee’s total taxable remuneration monthly. To view the exact percentages and amounts given the salary you are planning to offer, you can use our handy calculator tool.

While an Employer of Record is the most typical way for legally employing a worker in a different country where the company doesn't have an entity, in Norway, the model doesn't exist. Instead, the employing organisation employs a worker through a company established explicitly for that purpose. The employee then provides their services to the client company. We are responsible for:

• informing you about any pre-employment requirements
• ensuring their employment is compliant with Norwegian labor law
• informing you about the length of the maternity leave, paternity leave, public holidays, illness benefits, medical benefits
• providing a locally compliant employment contract
• processing local payroll
• filing employment-related tax returns
• issuing payslips to the employee
• distributing salary payments
• payments to the local tax authorities

Customers that work with Boundless in Norway are responsible for the following:

• sourcing and recruiting their own workers
• managing the employee’s day-to-day work load
• contributing to the personal / professional development of the employee through their work
• following any guidance we give on employment and HR best practices or legal obligations in Norway, such as the employment contract, public holidays, annual leave, sick leave, maternity and paternity benefits, probationary periods, overtime pay, statutory redundancy payments, liability insurance and many others
• ensuring that payroll bills relating to their team are paid to Boundless before the cut-off point in each pay cycle

Boundless as the Employer of Record Norway that has established an entity specifically for the purposes of employing on behalf of customers, files all pertinent taxes and contributions as they relate to the compliant employment of an individual in Norway.

We carefully choose employment lawyers or advisories to partner with in each country we operate in, including Norway. They ensure the Norwegian employment contracts, and any other relevant documents required for new employees comply with the local jurisdiction. We have thorough discussions on specific norms such as payroll services, social protection, data protection, notice period or work-from-home regulations. Whenever a potentially sensitive issue arises in Norway, our internal team contacts the relevant firm to ensure all steps are taken to resolve it promptly.

The company remains responsible and informs employees of the day-to-day management of the people and teams that are employed through Boundless, including any disciplinary or performance issues.

Boundless ensures compliance with Norwegian-specific procedures, practices and labour laws while employing people and teams on behalf of the company.

Any new employee locally employed through an Employer of Record that has set up a company specifically to employ on behalf of customers gets full employment rights and benefits as specified in Norwegian employment law. They get a locally compliant employment contract, statutory maternity leave, holiday pay, parental benefits, relevant tax credit, etc.

In Norway, both employers and employees have to pay taxes. Norway employers make social security contributions and pension contributions. Employees contribute to social security and pay income tax. To get a clear overview of both employee and employer taxes, use our salary breakdown calculator, submit any additional data needed, and get a downloadable pdf like this one.