Employer of Record in Norway

Hiring in Norway for the first time can be overwhelming, especially when navigating unfamiliar employment laws. Whether you hire independent contractors, set up a legal entity, or use an EOR service, understanding the local employment landscape is crucial for success. Playroll’s comprehensive guide can help you get started if you're hiring locally or relocating a team member.

Companies can hire employees in Norway in the following three ways:

• Setting up a local entity. Entity establishment reduces risk exposure and enables direct hiring, but can be costly and time-consuming – making it less practical for companies seeking quick and flexible solutions for hiring in Norway.
• Partnering with an Employer Of Record. An EOR, like Playroll, is a third-party entity that serves as the legal employer of your international workforce which hires, pays, and manages compliance with Norway’s labor laws and tax regulations.
• Hiring independent contractors. Hiring contractors gives companies a flexible, affordable alternative to hiring local employees, though it involves unique misclassification risks.

Businesses can only operate smoothly in Norway if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Norway below, to avoid any compliance issues.

Employment Contract Requirements

Employers in Norway must furnish new employees with a written employment contract, irrespective of employment type. The contract, which can be in a language other than Norwegian, should encompass essential terms such as:

Onboarding Process

We can help you get a new employee started in Norway quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Norway

In Norway, normal working hours cannot exceed nine hours per 24 hours, or 40 hours per seven days.

Overtime in Norway

In Norway, any work beyond standard working hours is considered overtime. Employees are entitled to receive an additional 40% of their normal wages for overtime, with the rate doubling for overtime on weekends. Overtime is capped at 10 hours per week and 25 hours over a four-week period.

Probation Period in Norway

In Norway, the probation period typically ranges from 1 to 6 months, but it can extend up to 12 months under special circumstances.

Fiscal Year in Norway

1 January- 31 December is the 12-month accounting period that businesses in Norway use for financial and tax reporting purposes.

Payroll Cycle in Norway

The payroll cycle in Norway is usually monthly, with employees being paid at least once a month..

Minimum Wage in Norway

There is no official national minimum wage in Norway; minimum wages are often outlined by individual sector collective bargaining agreements and employment contracts.

Bonus Payments in Norway

There is no mandatory provision for a 13th-month salary in Norway. Performance-based bonuses are granted at the discretion of the employer.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 18% on top of the employee salary in Norway.

Employee Payroll Tax Contributions

In Norway , the typical estimation for employee payroll contributions cost is around 8.1%.

Individual Income Tax Contributions

In Norway, employee income tax depends on factors like income type and residency. Non-Norwegian tax-resident workers can opt for Norwegian withholding tax. Non-residents on ships with limited tax liability face a flat 25% tax rate, including social security contributions The progressive individual tax rates are as follows:

Pension in Norway

In Norway, the pension system comprises three components: retirement pension from the National Insurance Scheme (folketrygden), occupational pension or contractual early retirement pension (AFP) from employers, and private pension savings.

Mandatory Leave Entitlement in Norway

The annual leave entitlement in Norway is 25 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Norway

Norway celebrates the following national holidays:

Paid Time Off in Norway

The Annual Holidays Act of 1988 in Norway mandates that employees receive 25 days of paid leave each year after the qualifying year.

Maternity Leave In Norway

In Norway, mothers are entitled to up to 12 weeks of maternity leave before birth and 6 weeks after birth, with coverage provided by Social Security.

Paternity Leave In Norway

In Norway, fathers are entitled to two weeks of unpaid leave to assist the mother after childbirth, with no statutory requirement for paid leave. This leave is also available to adoptive parents of children up to 15 years old.

Sick Leave In Norway

In Norway, sickness benefits are covered by the employer for the initial 16 calendar days, after which they are provided by the National Insurance Scheme.

Parental Leave In Norway

In Norway, each parent is entitled to up to one year of parental leave per childbirth, to be taken immediately after the child's first year. They can choose between 49 weeks at 100% pay or 59 weeks at 80% pay.

Termination Process in Norway

Terminations in Norway can be complex. There is no at-will termination in Norway for employers outside the probation period, and termination must be done for just cause. Compliant terminations include:

• Voluntary resignation by the employee
• Termination without notice for gross breaches
• Justified termination with notice based on objective circumstances
• Mutual agreement
• Termination during probation due to lack of suitability or proficiency
• Termination by contract expiration

Notice Period in Norway

The minimum notice period is one month but the notice period increases based on length of employment as follows:

• Minimum notice period: 1 month
• Up to 5 years: 1 month
• Up to 10 years: 2 months
• Beyond 10 years under 50: minimum 3 months
• Beyond 10 years aged 50 - 54: minimum 4 months
• Beyond 10 years aged 55 - 59: minimum 5 months
• Beyond 10 years aged 60 and above: minimum 6 months

Severance in Norway

In Norway, there are no statutory requirements for severance payments. During the notice period, the employee is still entitled to salary payments and additional contractual benefits in accordance with terms of employment.