Expanding your business into Norway presents exciting opportunities, thanks to its robust economy and highly skilled workforce. However, navigating Norway’s complex labor laws, tax systems, and employment regulations can be challenging, especially if you lack a local presence. Typically, establishing a local entity in Norway involves setting up an office, registering as a subsidiary, and adhering to numerous legal and administrative requirements. This process can be both time-consuming and costly.

Using an Employer of Record (EOR) like Stipenda allows your business to hire employees in Norway quickly, easily, and compliantly—without the need to establish a local entity. An EOR manages all aspects of employment, including payroll, benefits, and compliance, so you can focus on growing your business.

5 Steps to Hiring in Norway with an Employer of Record

Here’s how you can simplify the hiring process in Norway by partnering with an EOR:

Step 1: Choose the Right EOR Partner
Start by researching EOR providers to find one that aligns with your business needs. Consider factors such as compliance expertise, cost efficiency, and customer support.

Step 2: Ensure Compliance with Norwegian Regulations
Your chosen EOR should have a deep understanding of Norwegian labor laws, tax obligations, and employment regulations. This ensures that your business remains compliant and avoids any potential legal issues.

Step 3: Offer Competitive Employee Benefits
In Norway, employee benefits are a crucial part of compensation. An EOR can help you provide a comprehensive benefits package, including mandatory social security contributions, pension plans, and optional private healthcare.

Step 4: Prioritize Employee Experience
A good EOR will offer a seamless onboarding process and efficient payroll management, ensuring your employees in Norway have a positive experience from day one.

Step 5: Monitor and Adapt to Changes
Labor laws and tax regulations in Norway can change. Your EOR partner should keep you informed and help you adapt to these changes to ensure ongoing compliance.

Key Benefits of Using an Employer of Record in Norway

Partnering with an EOR in Norway offers several advantages, especially for businesses looking to expand internationally without setting up a local entity:

• Compliance with Local Laws: An EOR ensures that your business complies with Norway’s labor laws, including employment contracts, payroll, and employee benefits.
• Cost-Effective Expansion: Avoid the overhead costs and complexities of establishing a local subsidiary by leveraging an EOR’s existing infrastructure.
• Streamlined HR and Payroll Management: EORs handle all HR tasks, from onboarding to payroll processing, allowing you to focus on your core business activities.
• Quick Onboarding: An EOR can onboard your employees in Norway in as little as two days, helping you get your team up and running quickly.

Payroll and Taxation in Norway

Understanding the payroll and tax landscape in Norway is crucial for any business looking to hire there. An EOR can manage the following:

Payroll Cycle:
In Norway, employees are typically paid on a monthly basis.

Income Tax:
Norway employs a flat individual income tax rate of 22%. This tax rate is applied uniformly, although other factors such as social security contributions can influence the overall tax burden.

Employer Contributions:
Employers in Norway are required to contribute 18% of an employee’s salary toward various social security and pension funds. This includes:

• Public Pension Fund: 4%
• Employer Social Security (ER SS): 14.1%

Vacation Pay:
In addition to regular payroll, employers in Norway must also provide a vacation bonus. This is 12% of the annual total compensation for employees under 60 years old and 14.3% for those aged 60 or older.

Overtime Pay:
Overtime pay is mandatory in Norway. Employees working outside standard hours (7.5 hours per day, 37.5 hours per week) are entitled to overtime compensation:

• Weekdays: 140% of the regular hourly rate.
• Night Shifts and Weekends: 200% of the regular hourly rate.

Employee Benefits and Compensation in Norway

Using an EOR, you can offer your employees in Norway a competitive benefits package that complies with local regulations. Typical benefits include:

• Occupational Injury Insurance: Mandatory coverage for work-related injuries.
• Pension Contributions: Employer contributions to the public pension fund.
• Public Health Insurance: Coverage provided through Norway’s social security system.
• Optional Private Healthcare: Additional health coverage options, such as those provided by Unisure or Allianz.

Termination and Severance in Norway

Notice Period:
The notice period in Norway varies depending on the employee’s contract and length of service but typically ranges from one to three months.

Severance Pay:
Norway does not have a statutory requirement for severance pay. However, it is often negotiated as part of the employment contract.

Risks of Employee Misclassification in Norway

Misclassifying employees as contractors can lead to significant legal and financial penalties in Norway. Employees are entitled to a range of protections and benefits that contractors are not, such as minimum wage, paid leave, and social security. An EOR can help you navigate these complexities, ensuring that all workers are classified correctly and compliant with Norwegian law.

Get Started with an Employer of Record in Norway

Expanding into Norway offers a wealth of opportunities, but it also comes with its challenges. By partnering with an Employer of Record like Stipenda, you can simplify the hiring process, ensure compliance with local laws, and provide your employees with the best possible experience.

Ready to hire in Norway? Contact us today to learn how Stipenda can support your global expansion efforts.

For any sales inquiries, feel free to reach out to us:

Europe: +44 (0) 330 380 0161
US: +1 800 910 7847
Email: sales@stipenda.com