Your Guide to Hiring Employees and Contractors in Norway
Norwegian Kronar (NOK)
Ease of doing business
The employer and employee determine the payroll frequency stipulated in the employment contract.
However, salary payments are to be made at least once a month.
Minimum Wage Requirements
There’s no government-mandated minimum wage in Norway. Employers are free to bargain with unions and individuals, depending on the role and industry.
Despite the lack of a minimum wage, Norway has one of the highest average wages in the world, at around 640,000 NOK, equivalent to over $75,000.
Individual Income Tax
Social security contribution
Tax rate: 8.2%
Pension contribution (charged to employees aged 17 – 69 only)
Tax rate: 5.1%
Income up to 184,800 NOK
Tax rate: 22%
Between 184,800 – 260,100 NOK
Tax rate: 23.7%
Between 260,100 – 651,250 NOK
Tax rate: 26%
Between 651,250 – 1,021,550 NOK
Tax rate: 35.2%
Above 1,021,550 NOK
Tax rate: 38.2%
The employer cost is generally estimated at 18.1% of the employee salary.
Pension plan: 4.0%
Employer Social Security (ER SS): 14.1%
Vacation bonus: 12.0%
Vacation bonus Employer Social Security (ER SS): 1.7%
Monday to Friday.
Overtime Pay & Maximum Hours
All work over a standard working week is to be paid as overtime and is regulated by employment contract/collective agreements etc.
When an employee is requested to work overtime or work on holidays, there are maximums in relation to the number of hours allowed.
These maximums include 13 hours of work within 24 hours, 10 hours in 7 days, 25 hours in 4 consecutive weeks and 200 hours in 52 weeks.
All overtime hours in excess of 40 hours a week are paid at an overtime compensation rate; this rate is stipulated in the employment contract/collective agreements etc., but is commonly 140.00% of the employees’ regular rate of pay.
The termination process varies according to the Employment Agreement or Collective
Agreements that are in place and is based on the type of contract and reason for termination.
An employer is not required to issue a warning before an employee is dismissed, and there is no at-will employment in Norway. As such, an employer must have a solid cause for terminating an employee and must prove the ground for termination.
All employers must adhere to strict requirements outlined in the Working Environment Act. An employer must conduct a consultation with the employee to discuss the potential dismissal before the termination.
If an employee wishes to terminate their employment, they must provide one month’s notice and submit their resignation in writing.
If an employer wishes to terminate an employee, the notice period is dependent on the age and seniority of the employee, as follows:
If an employee has served over five years of employment, two months’ notice is required.
Over ten years of employment, three months’ notice is required.
Over the age of 50, 4 months’ notice is required.
Over the age of 55, 5 months’ notice is required.
Over the age of 60, 6 months’ notice is required.
If an employee is in their probation period, either the employee or employer can terminate the employment with a 14-day notice period.
The notice period begins on the first day of the month following when the notice was given.
Probation periods can last for up to six months under Norwegian regulations.