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Minimum wage in Norway
Payroll in Norway
Norway Social Security
Employee benefits in Norway
Compliant, seamless payroll and benefits in Norway and beyond
Payroll and benefits in Norway
Every country in the world has its own rules and regulations concerning payroll and benefits. Employers that want to hire in those countries need to be aware of the laws that apply so they can ensure their operations are compliant.
If you want to employ workers in Norway, you’ll need a thorough understanding of the pay-as-you-earn (PAYE) system that employers have to use to withhold and pay employee income tax, as well as various other aspects of payroll in Norway.
Basics of payroll in Norway
Payroll in Norway must be run at least once a month, and employers must provide employees with a digital or paper payslip detailing their gross pay and any deductions that have been made. Employers must withhold income taxes, National Insurance contributions and various other charges from their employees’ pay and remit them to the correct authorities.
Payroll outsourcing in Norway
Employers that want to avoid the hassle of running payroll in Norway can outsource their payroll to an independent provider, such as an employer of record (EoR). Employer of record providers run payroll and make the necessary deductions and payments on behalf of their clients. They’re also responsible for ensuring each employee receives the statutory benefits they’re entitled to under Norwegian employment law.
Minimum wage in Norway
There is no national minimum wage in Norway. Instead, the minimum wage is set by collective bargaining agreements between employers, trade unions, and local authorities. This allows each sector to easily adapt to economic changes that impact that industry in particular.
Sector-specific minimum wages in Norway
In Norway, some sectors have collective bargaining agreements that apply to all employees working in that sector, regardless of their employer or whether they are trade union members. These agreements provide the minimum wage that employers must pay to employees in that sector.
Specific minimum wages are applicable in the following sectors in Norway:
- Construction
- Cleaning workers
- Hotel, restaurant, and catering
- Maritime construction
- Agriculture and horticulture
- Fish processing enterprises
- Electricians
- Freight transport by road
- Passenger transport by tour bus
The collective pay agreement for each of these sectors provides the minimum wage, which sometimes depends on the worker’s experience or skill level. For example, in the construction industry, the minimum wage for skilled workers is NOK 238.30 (EUR 19.90), while the minimum wage for unskilled workers without experience in construction is NOK 214.90 (EUR 17.95 ). Most collective pay agreements also stipulate minimum wages for workers aged under 18, and many have special provisions for things like overtime and shift work.
Minimum wage in Norway for international students
There is no specific minimum wage in Norway for international students. If a student works in a sector covered by a collective bargaining agreement, they must be paid at least the minimum wage for that sector.
Average wage in Norway
Like its Scandinavian neighbours, wages in Norway are typically quite high compared to other European countries. According to Statistics Norway, the average monthly earnings across all employees in 2023 was NOK 53,150 (around EUR 4,400).
Payroll in Norway
Payroll in Norway is subject to certain rules and regulations that employers should be aware of before hiring local employees. Read on for everything you need to know.
Payroll frequency in Norway
Employers in Norway have to run payroll at least once a month, but they can choose to run it more frequently. For example, you could pay your Norwegian employees every week or every two weeks.
Norway payroll tax
Employees in Norway must pay income tax on their income from work. This is collected through a pay-as-you-earn (PAYE) system, in which employers deduct the correct amount from their employees’ wages and remit it to the Tax Administration on their behalf. Employers have to make a payment to the Tax Administration six times per year. The deadline for paying tax is the 15th of the month following the two-month period. For example, tax collected in January and February is due by 15 March.
Payroll tax rates in Norway
There are two components to income tax in Norway:
- A general rate of 22%, which includes municipal, county, and national taxes
- Progressive surtaxes on income above certain thresholds
The progressive surtax is paid at the following rates:
- Income between NOK 208,051 and NOK 292,850: 1.7%
- Income between NOK 292,851 and NOK 670,000: 4.0%
- Income between NOK 670,001 and NOK 937,900: 13%
- Income between NOK 937,901 and NOK 1,350,000: 16.6%
- Income exceeding NOK 1,350,000: 17.6%
Social security contributions in Norway
Both employers and employees in Norway have to make contributions to the National Insurance Scheme. This is a social security system that pays for things like sick pay, maternity and parental allowances, and the state pension.
Employers’ contributions are usually paid at 14.1% of the employee’s annual salary but may be lower if the employer operates in a sparsely populated area. This rate increases to 19.1% for employees who earn more than NOK 850,000 per year.
Employer contributions range from 5.1% to 8.2%, depending on the employee’s circumstances. However, employees are exempt from paying National Insurance contributions if they earn less than NOK 69,650 per year. An employee’s contributions can’t add up to more than 25% of the income they earn above this threshold. Employees aged under 17 or over 69 pay at the lower rate of 5.1%.
13th-month salary in Norway
Unlike in some other European countries, there is no specific requirement for employers to pay a 13th salary payment to their employees in Norway. However, some companies choose to offer performance-based bonuses as an employee benefit.
Other requirements for running payroll in Norway
Payments to employees in Norway must be made by bank transfer, though there is no obligation to pay from a Norwegian bank account. Employers must provide employees with a payslip every month, which details their salary, withholding information, holiday pay, and any other deductions. This can be provided in either paper or digital format. Employers must keep payroll records for at least five years.
Employers in Norway have to prepare and submit a monthly tax report called the A-melding by the 5th day of each month. They must also prepare an annual wage report at the end of each tax year and send it to employees by 1 Feb in the following year.
Norway Social Security
Norway is a country with a strong social security system, which pays for many of the employee benefits that might otherwise be provided by employees directly. This system is paid for through National Insurance contributions from both employers and employees.
Norway’s social security system
Among other things, social security in Norway pays for:
- Retirement and disability benefits: These provide employees with income (the state pension) after they retire, as well as an income if they become disabled and unable to work.
- Unemployment benefits: Employees in Norway can get a state benefit while they are out of work.
- Parental leave: Employees are also entitled to parental leave after they or their partner gives birth, or when they adopt a child. This is paid for through the social security system.
- Benefits to single parents: Single parents in Norway can access a benefit to help them with the costs of raising a child, paid for by social security.
- Medical benefits: Norway’s medical system is largely financed through the National Insurance Scheme, and healthcare is mostly free of charge for patients.
Employer-provided statutory benefits in Norway
Here are some of the statutory benefits that employers in Norway are expected to provide outside of social security contributions:
- Annual leave: Employees in Norway are entitled to at least 21 days of paid leave each year. Many employers choose to grant their employees up to five weeks (25 days) of paid leave.
- Sick leave: Employers in Norway must pay employees’ salary for the first 16 days of sick leave. After this point, they can be paid through the social security system.
- Occupational pension scheme: All employers in Norway must set up an occupational pension scheme for their employees. The employer must pay a minimum contribution of 2% of the employee’s salary (up to a set maximum) into this pension scheme, and employees can pay up to 7% of their salary, up to a maximum.
- Occupational insurance: Employers are obligated to take out an occupational injury insurance policy that pays out to employees in the case of an injury at work.
Employee benefits in Norway
It’s common for employers to provide additional employee benefits in Norway, even when they’re not required by law. This can be a valuable way of building your employer value proposition (EVP) and attracting talented employees. The scope of the benefits provided often depends on the employee’s seniority. Below, we’ll discuss some of the most common additional employee benefits in Norway.
Remote working and flexible work arrangements
In today’s world of work, offering employees the opportunity to work when, where, and how they want to can be a valuable employee benefit. Many employers in Norway choose to operate a hybrid work policy, where employees are only required to work on-site part of the time. Employees working remotely in Norway must sign a written agreement defining the terms and conditions of their remote work arrangement with their employer.
Additional paid leave
Employees in Norway are entitled to a minimum of 21 days (four weeks plus one day) of paid annual leave per year. Providing additional paid leave can be a valuable additional benefit to offer your employees in Norway. For example, many employers choose to grant their employees a total of five weeks (25 days) of paid leave each year.
Additional pension contributions
Paying pension contributions above the mandatory minimum of 2% can be a valuable employee benefit in Norway. Many employers choose to do this as a way of encouraging employees to remain at their company for a long time.
Life insurance
Life insurance covers employees who are impacted by accidents at work resulting in death or incapacity. Although they are not obligatory, most employers in Norway choose to take out a life insurance policy for their employees.
Additional payment during parental leave
Parents in Norway are entitled to a combined year off work when they or their partner has a baby. However, this is paid by the social security system, which only pays employees 80% of their salary, up to a set maximum. Some employers choose to top up their employees’ parental benefits so they receive their normal salary, which can be a valuable employee benefit in Norway.
Compliant, seamless payroll and benefits in Norway and beyond
Getting payroll and benefits right is not just a legal issue. Every country also has its own customs, norms and expectations about employee compensation. And if your operations aren’t in line with your workers’ expectations, they may not stick around for long.
Thankfully, we know what we’re doing. When you work with CXC to engage workers in Norway, we’ll handle everything from tax withholding to employee bonuses on your behalf.
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