Our guide to Payroll in Norway

Doing Business in Norway

Investing in Norway

The Government welcomes inward investment in Norway that will contribute to the economy. Various financial incentives exist to encourage investment within key industries, particularly those supported by Government Research and Development grants.

Basic Facts about Norway

General Information

Full Name: Norway

Population: 5.52 million (Statistics Norway, 2023)

Capital: Oslo

Primary Language: Norwegian

Monetary Unit: 1 Norwegian krone = 100 øre

Internet Domain: .no

International Dialing Code: +47

How to say

Hello: Hallo

Good morning: God morgen

Good evening: God kveld

Do you speak English? Snakker du engelsk?

Good bye: Farvel

Thank you: Takk

See you later: Ser deg senere

Dates & Numbers

Dates are expressed numerically as follows: 26.06.1985 with the day first, month second and year third, separated by decimals.

Norway does not use commas to separate thousands, millions etc. Instead, they use spaces, for example 5 033 952

Money is expressed with commas, i.e. 77, 00 NOK would be 77 Norwegian kroner. 87,10 NOK would be 87 Norwegian kroner and 10 øre

Registrations and Establishing an Entity

Every foreign company needs to have a Norwegian Organization Number with The Central Coordinating Register for Legal Entities (Brønnøysund) in order to operate and process a payroll in Norway. The application process can take around three to eight weeks for a NUF and less time for an AS.

In order to obtain an organization number for a NUF in Norway, the following is required:

• Application form
• Information about the Director or contact person, power of attorney if necessary
• Registration certificate from the home country

All employees working on a construction site or building site are required to have a Building ID Card.

The employer is obligated to report the contract as well as the employees working on a contract to the authorities by completing RF 1199/98 forms. Some exemption can apply on a case-by-case basis.

Banking

It is not mandatory to make salary payments from an in-country bank account in Norway. It is mandatory to pay the withholding tax from an in-country bank account and this account should be separate. Employers can provide a bank guarantee (if within the EU) instead of making payments from an in-country account.

Salary payments and third-party payments can be made on the client’s behalf. Bank transfers within the same bank in Norway will usually take place within the same day and for any other bank also in Norway will usually be within one day. International transfers can take between three to four working days.

Working Week

The working week in Norway is Monday to Friday. The legal duration of work is 40 hours per week. The duration can be annualized to 1607 hours or 218 days. In that case, the time at work can be modulated depending on high or low seasons.

Along with the annual rules, employees are granted RTT (working time reduction days) and extra hours are paid or “Recovery Days” are granted. It depends on the collective agreement or a corporate agreement.

Employment Law

Holiday Accrual / Calculations

Holiday entitlement in Norway is calculated based on the gross salary earned in the previous calendar year, excluding any holiday pay paid during that year.

Holiday Pay Rates

Holiday pay is accrued at the following statutory rates:

10.2% of gross salary

Entitles the employee to four weeks plus one day of holiday

12.0% of gross salary

Entitles the employee to five weeks of holiday (statutory + contractual)

Holiday pay is typically paid out in connection with the employee’s holiday period or as otherwise agreed.

Parental Leave

Norway provides a comprehensive parental leave scheme, funded through the National Insurance scheme (NAV), subject to eligibility.

Total Parental Leave Entitlement

Parents may choose between:

49 weeks at 100% salary, or

59 weeks at 80% salary

Distribution of Leave

• 15 weeks are reserved for each parent (mother’s quota and father’s quota)
• The remaining weeks may be shared freely between the parents at their discretion
• Three weeks before the due date are reserved exclusively for the mother

Maternity Leave

• The mother’s reserved maternity leave is 15 weeks
• The first six weeks after delivery are mandatory and reserved for the mother
• Maternity benefits are payable through NAV, provided the employee is eligible and a member of the Norwegian National Insurance scheme

Paternity Leave

• The father has a non-transferable paternity leave quota of 15 weeks
• If the father does not take this leave, the entitlement is forfeited
• Any remaining parental leave weeks (outside the reserved quotas) may be divided freely between the parents

Sickness

The Norwegian sickness absence system consists of several stages and eligibility conditions.

Short-Term Absence (Self-Certification)

• Employees are entitled to up to four periods of three calendar days per rolling 12-month period
• These absences may be taken without a medical certificate

Employer-Paid Sick Leave

• With a valid medical certificate, the employer must pay sick leave for up to 16 calendar days

NAV-Paid Sick Leave

• Sick leave exceeding 16 days is paid by NAV
• NAV pays 100% of salary up to a maximum of 6G during the first year
• After one year, the benefit level may be reduced
• NAV compensation is only payable if the employee is a member of the Norwegian National Insurance scheme

National Service

Norway has mandatory national service for both men and women.

Eligibility

• Applicable to individuals aged 19 to 44
• Service may begin at 17 years of age with parental consent
• In the event of war, liability may extend up to 55 years of age

Duration of Service

• Home Guard: 6 months
• Army, Navy, or Air Force: 12 months
• Total service obligation may extend up to 19 months

Tax & Social Security

The tax year runs from 1^st January to 31^st December.

The year-end process in Norway is required to be completed by 31^st January. At the end of each tax year, a mandatory annual wage report must be completed and sent to each of the employees. The report is a summary of all figures reported in the a-message during the year. The report is the end of year certificate and confirmation to the subcontractor of earnings in Norway.

When an individual starts working in Norway, they receive a tax table or tax percentage card based on their annual salary, housing and family situation. The tax card can be downloaded here. If the employee is working onshore, the employee must perform an ID check at the tax office prior to receiving a tax card. Employees working on vessels do not need to have an ID check.

If an individual receives a tax table card, they can calculate their tax using an online tax calculator.

Income Tax

All employees are taxed based on a tax card issued by the Norwegian Tax Administration. The tax rate applied depends on several factors, including:

• Income level
• Personal wealth and debt
• Number and age of children
• Whether the employee’s spouse is working

Base Income Tax

Income tax is 22% of net wages. In addition, employees with income above a certain threshold must pay progressive bracket tax (trinnskatt).

Bracket (Step) Tax Rates

Bracket tax applies progressively as income increases:

Income NOK 0 – 180,800

No bracket tax

Step 1: NOK 180,800 – 254,500

1.9% bracket tax

Step 2: NOK 254,500 – 639,750

4.2% bracket tax

Step 3: NOK 639,750 – 999,550

13.2% bracket tax

Step 4: Income above NOK 999,550

16.2% bracket tax

Bracket tax is calculated only on the portion of income within each step, not on the entire salary.

Missing Tax Card

If no valid tax card is available, 50% tax will be withheld from the employee’s wages until a tax card is provided.

PAYE Scheme for Foreign Workers

Since 2019, a simplified tax scheme for foreign workers has been available:

PAYE (Pay As You Earn).

Employees who meet the requirements will be taxed under the PAYE scheme

Tax is final, and no annual tax return is required

Employees may opt out of PAYE and be taxed under the general tax rules at any time by changing their tax card during the tax year

Tax Withholding and Payment

Tax is withheld and reported monthly

Tax payments are remitted to the authorities by the 15th of every second month (known as a termin)

Penalties for Late Reporting or Payment

Late submission or payment of tax contributions may result in penalties:

Late payment:

A penalty calculated as a percentage of the outstanding amount, depending on the number of days overdue

Late or incorrect A-melding (monthly tax report):

Fee of NOK 115 per income recipient per day

Applies until the report is submitted or errors are corrected

Maximum penalty: 1,000 × NOK 1,150 (one court fee)

→ Maximum total fine: NOK 1,150,000

Social Security

Employee Contributions

Employees are required to pay social security contributions of 8.2% of gross salary, unless an exemption applies under a relevant social security agreement (e.g. applicable international agreements or certificates such as A1).

The 8.2% employee contribution is included in the total tax withheld from the employee’s salary

No separate deduction is made beyond the standard tax withholding

Employer Contributions

Employers are required to pay employer’s social security contributions of 14.1% (Zone 1) on employees’ gross salary.

Withholding and Payment Schedule

• Social security contributions are withheld and reported monthly
• Payments to the authorities are made every second month
• Payment due dates are the same as for income tax, as described above

Penalties for Late Payment or Submission

Late submission or payment of social security contributions may result in penalties:

• A penalty fee is calculated as a percentage of the outstanding amount
• The penalty increases based on the number of days the payment is delayed
• Penalties apply until the outstanding amount has been paid in full

Reporting

Monthly

A-melding Reporting (A01):

• Every month
• This represents the gross salary inclusive benefits in kind
• It needs to be submitted by the 5^th of the following month
• This is filed electronically on Altinn

Bi-Monthly

A-melding Payment (A03)

• Every second month
• This represents the amount of NI and tax payable
• It needs to be submitted by the 15^th of the Month following the end of the Term in (Jan/Feb due 15^th March)

Pensions

Norwegian legislation requires employers to operate a mandatory occupational pension scheme (OTP) for eligible employees.

Mandatory Employer Contributions

Employers must contribute a minimum of 2% of pensionable salary

Contributions apply to salary up to 12 G

(G = National Insurance basic amount, as defined annually by the Norwegian authorities)

Exemptions

Certain employees may be exempt from mandatory pension coverage, depending on their employment and social security status. Exemptions may apply, for example, to:

• Employees who are not members of the Norwegian National Insurance scheme
• Employees covered by applicable international social security agreements

Eligibility for exemptions must be assessed individually and documented in accordance with applicable regulations.

Maximum Contribution Limits

The Norwegian government sets maximum allowable pension contribution levels, which vary depending on:

• Salary level
• Pension structure and benefit design
• Applicable contribution thresholds

Employers may choose to contribute above the minimum 2%, provided contributions remain within the statutory limits established for the relevant pension arrangement.

Payroll

It is legally acceptable in Norway to provide employees with online pay slips. A company is required to have a legal entity established in order to process a payroll, however only a registered number is required.

The implementation of a payroll is dependent on several factors, for example, the number of employees, the pay structure, complexity of the payroll etc. It is advisable to upload files to transfer data as this accelerates the implementation process.

Reports

Payroll reports must be kept for at least 10 years.

Payslip Example

New Starts

The employees need to register with the Population Register if moving to Norway and intend to stay for more than six months.

Each employee must apply for a tax card. In order to apply for a tax card, the employee has to go to the tax office in person with the required documents (a valid passport and employment contract or a written confirmation of work assignment(s) in Norway) and perform an ID check. At the ID check, the employee needs to submit an application for a tax deduction card (form RF-1209).

All employees working offshore are exempted from the ID check and will be issued a tax card when they are reported by completing the RF1198 form.

To set up a new starter for payroll,l the employer will need to complete a new hire form and provide this along with a copy of their tax card and an A1 form (if necessary).

Leavers

The timescale regarding an employee’s final payment is dependent on the employee’s contract.

When an employee leaves the company, the RF 1199 Contract Form and the RF 1198 Employee Activity Form needs to be completed and the employee should be removed from the AA register at NAV. The leaver forms should be submitted via the new online portal for reporting information about assignments, contractors and employees.

Employee Benefits

All statutory social benefits in Norway are administered and paid by NAV (the Norwegian Labour and Welfare Administration), subject to eligibility and membership in the Norwegian National Insurance scheme.

Expense Reimbursements

Certain work-related expenses are generally reimbursed by the employer in accordance with company policy and Norwegian regulations. These typically include:

• Per diem allowances
• Business travel expenses
• Mobile phone expenses
• Internet costs

Reimbursements are normally handled on a cost-incurred basis and must comply with applicable documentation requirements.

Mileage Reimbursement

Employees using their private vehicle for business travel may receive mileage reimbursement:

• 0–10,000 km per year: NOK 3.90 per km
• Above 10,000 km per year: NOK 3.90 per km

Mileage claims must be supported by accurate travel logs and submitted in line with company procedures.

Company Cars

Company cars are treated as a taxable benefit and are taxed based on:

• The vehicle’s list value
• Applicable percentage rates set by the authorities

Tax treatment may vary depending on factors such as:

• Private versus business mileage
• Employer-paid phone and running costs
• Specific usage arrangements

Company car taxation is therefore assessed on a case-by-case basis.

Family-Related Benefits

Child Benefit

• Paid for each child under 18 years of age
• The child must reside in Norway
• The recipient must have been paying taxes in Norway

Parental Lump-Sum Benefit

• Paid as an alternative to maternity benefits
• Applicable when the mother has not been employed for at least 6 of the last 10 months prior to birth
• The father must have been working and paying taxes in Norway
• Paid as a one-time lump sum by NAV

Childcare (Cash-for-Care) Benefit

• Paid if one parent stays at home to care for the child
• Applicable when the child does not attend a daycare centre
• Available up to the child reaching two years of age

Visas & Work Permits

The EEA agreement secures nationals of the EU and EFTA countries freedom of movement and establishment throughout the area and a work permit is no longer required.

EEA nationals may stay in Norway for a period of three months (90 days) provided they are financially self-sufficient (EEA nationals who are registered at their local job center in Norway (http://www.nav.no/) as actively seeking employment can stay in Norway for up to six months without a residence permit, provided they are financially self-sufficient).

Citizens from the EU, as well as citizens from Liechtenstein and Iceland can work during this period. Citizens from outside EU/EEA countries must apply for and obtain a residence permit before they can commence any employment.

EEA nationals, who wish to stay longer than 90 days, need a residence permit that also covers the right to work. Employees of multinational companies will normally be regarded as “skilled workers”. Applications must be accepted before commencing employment in Norway.

In order to work in Norway, non-EEA citizens need a work permit. The permit must be granted before entry, and as a rule, does not allow you to travel to Norway and wait for a decision. Further information about residence and work permits can be found here.

• Every foreign company needs a Norwegian Organization Number with The Central Coordinating Register for Legal Entities (Brønnøysund) to operate and process payroll in Norway.
• The application process for a NUF can take three to eight weeks.
• Registration forms such as RF 1199/98 must be completed for construction site workers and contracts.
• Workweeks are Monday to Friday. Legal duration is 40 hours per week. This can be annualized to 1,607 hours.
• Dates are expressed as day.month.year (e.g. 26.06.1985).
• Norway does not use commas for large numbers—uses spaces (e.g. 5 033 952).
• Currency is formatted with commas (e.g. 87,10 NOK = 87 kroner and 10 øre).
• It is legally acceptable to issue online pay slips.
• Submissions such as A-melding must be filed electronically on Altinn.
• Payroll reports must be retained for at least 10 years.
• If a tax card is unavailable, employers must withhold 50% of gross salary.
• The National Insurance scheme (NAV) handles most social security payouts and benefits.
  
  

Further Information

For more information, or assistance with Norway Tax enquiries please contact: gi@activpayroll.com

About This Payroll and Tax Overview

Please note that this document gives general guidance only and should not be regarded as an authoritative or complete statement of the law, regulations or tax position in any country. You should always seek specific advice for each specific situation. This document should not be relied upon as professional advice and activpayroll accepts no liability for reliance on its contents.