Tax Figures
Corporate Income Tax
Corporate Income Tax: 27%, calculated on taxable profit
Norway made paying taxes less costly for companies by reducing the corporate income tax rate.
Income Tax Rate
In case you are an employee:
- Live in Norway (min. 183 consecutive days over 12 months): You must pay tax on your worldwide income there.
- Lived in Norway less than 183 consecutive days: You are not considered tax resident and only pay tax on income earned in Norway.
- Income from other EU countries: Check you never pay tax twice on the same income.
To calculate your total tax bill:
- Work out your taxable income by subtracting any applicable allowances or deductions for expenditure
- Work out the rate that applies to it by combining these 3:
- Combined national and municipal income tax – 28% (24.5% in Finnmark and Nord-Troms counties).
- Top tax – 0 – 12% (depending on your income)
- Social security contribution (NIS) – 7.8%.
Before or on starting work in Norway, you must:
- Apply to your local tax office for a tax deduction card
- Give it to your employer – they will deduct the percentage stated on the card from your salary.
You must also file a tax return (selvangivelse) by 30 April every year.
In case you are a self-employed:
- Live in Norway (min. 183 consecutive days over 12 months): You must pay tax on your worldwide income there.
- Lived in Norway less than 183 consecutive days: You are not considered tax resident and only pay tax on income earned in Norway.
- Income from other EU countries: Check you never pay tax twice on the same income.
To calculate your total tax bill:
- Work out your taxable income by subtracting any applicable allowances or deductions for expenditure
- Work out the rate that applies to it by combining these 3:
- Combined national and municipal income tax – 28% (24.5% in Finnmark and Nord-Troms counties).
- Top tax – 0 – 12% (depending on your income)
- Social security contribution (NIS) – 11%.
You must file a tax return for self-employed workers (form RF-1030) by 31 May every year.
Sales Tax
VAT: 25%
Withholding Tax
- Dividends: 0% – 25%
- Interest: 0%
- Royalties: 0%
Other Tax
Stamp Duty: 2.5%
Real Estate Tax: 0.2% – 0.7%
Double Taxation Relief based on credit method
Income Tax (Personal Allowance)
In Norway many employee tax deductions are taken directly from the employee’s salary, before it is paid to them. These taxes include income tax, social security contributions and church taxes. In order for the tax authorities to calculate all individuals’ taxes correctly, all workers must provide them with their tax information.
This must be done in the form of a tax return. The tax return must include information such as income, assets and income deductions; the return must then be checked and submitted before the 30th April, each year.
Employers in Norway must deduct all employees taxes before they are sent to the employees, and they must calculate the employee’s taxes based on their rate, stated on each of their employee’s personal tax deduction cards.
At the end of the year, employers must complete a form called the Certificate of Pay and Tax Deductions (End of year Certificate), for each of their employees. The End of Year Certificate must state the employees total salary earned, any remuneration paid to the employee and the total of any taxes deducted.
Time to prepare and Pay Taxes
83 hours
Employers Social Security and statutory contributions
14.1%, calculated on gross salary.
Employees Social Security and statutory contributions
7.8%, calculated on gross salary.
Payroll
There are specific rules that apply to payroll and taxation in Norway. The country eased the process of paying taxes for companies, by reducing the corporate income tax rate for 2016.
Payroll in Norway can, however, be complicated. If you have employees stationed in Norway, you must run a payroll through a Norwegian registered entity. Regardless of the method you choose, you must report your employees’ income, tax deductions and national insurance contributions every month.
Typically, payroll includes:
- “A-meldingen”: Regardless of the setup chosen, it is mandatory to report employees’ income, tax deductions and national insurance contributions every month;
- National insurance contributions, both from the employee and employer, alternatively assistance with registering National Insurance Confirmations (NIC) from your home country if applicable;
- Holiday pay deduction and annual holiday payment;
- Pension deduction, administration and payments, when required to have a Norwegian pension;
- Sick pay and parental pay, for employees covered by Norwegian National Insurance;
- Payments of wages, or payment advice;
- Insurances (including workers’ compensation) when required;
- The deposit of tax deductions into a dedicated bank account, for those with tax liability in Norway;
- Assistance with obtaining a liability waiver.
Remote Payroll
A remote payroll system is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Norway. Under Norwegian law, there are two options available:
- Register a subsidiary in Norway for employment purposes;
- Enlist the services of an employment provider.
Local Payroll Administration
In some cases, a company will register their business in Norway under one of the forms available: companies limited by shares (AS or ASA); fully liable partnerships (ANS); limited partnerships (KS, DA); sole traders and branches.
However, it may prefer to have another company administering its payroll. This can be accomplished through a payroll provider.
It is important to consider that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
Internal Payroll
Larger companies with a commitment to Norway may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff.
There will be a need for in country human resources personnel who have the background needed to manage a Norwegian payroll, and can fulfil all tax, withholding, and payroll requirements.
This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Norwegian employment laws.
Setting up payroll in Norway
Currency
The national currency is the Norwegian Krone (NOK), which is equal to USD 0.11.
Employee Information Required
When a new employee starts work with a new business, it is very important that the employer has all the correct information they require about the employee. The information required includes:
- Full Name
- Address
- Telephone number(s)
- Emergency Contact
- Personal ID number
- Tax Deduction Card
Tax Registration Requirements
For anyone coming to Norway and wishing to work and stay for more then 3 months, then they must visit their local tax office and apply for a tax deduction card. They must then pass the card onto their employer so that they can deduct the correct amount of tax from their salary each pay day.
Social Security Registration
When in Norway, as soon as an individual begins work and gives their employer their tax deduction card, then they will become a part of the social security system and be eligible for receiving benefits.
Documentation Required for New Employees
In Norway employers are legally required to provide their employees with an employment contract.
There are several items which must be included in the contents of the written contract.
These include the following-
- The duration of the employment
- Employee wage (including how often they will be paid and how payment is made)
- The probationary period (usually six months)
- Terms for giving notice (during and after probationary period)
- Working hours
- The job description (including the duties, job title and other information for the employee)
- Holiday leave
Payment Mode
There are a range of ways in which Norwegian employers can choose to pay their employees salaries. These include Electronic payments, cash or cheque. In most large businesses, employers will use the system of electronic payment to settle the employee’s wages. Electronic payments are a fast and simple way of transferring money from one account to another. They ensure that the employees receive their money on the day they expect, and any amendments that are required are easily complete.
Frequency of Salary Payment
In Norway, employers can choose from a range of times in which to pay their employees. These times include daily, weekly, bi-weekly, monthly, quarterly, and annually. In general, most employers choose to pay their employees once a month, usually on the last working day.
Invoice / Payslips required
In Norway all employees are entitled to receive a pay slip at the same time as receiving their regular wage. The Pay Slip is designed to show the employee their gross wage for that time, the total deductions they have had removed from their income, and their total salary paid to date for that current year.
Minimum Wage
In Norway there is no National Minimum Wage. In order to calculate workers wages, individuals pay normally falls into a national scale which is negotiated by Labor, their employers and local governments.
