There are numerous reasons why recruiting a Norwegian employee is attractive for international companies. Norwegians are not only the happiest people in the world – according to the 2017 World Happiness Report – but the country’s workforce is also said to be one of the best-educated in the world.
This goes for both professional and language skills: There are many countries in the world where a fair share of the population speaks reasonable English but English proficiency levels in Norway are so high it is actually hard to find someone not able to communicate in English. Integrating your new recruit from Norway into your remote team should thus not be a problem.
Employers are obligated to provide their new employees with a written employment contract, regardless of the type of employment. The agreement can be drafted in a different language than Norwegian and should outline at least the following basic terms of employment:
- Identification of both parties
- Date of commencement (and employment duration as well as legal basis for temporary contracts)
- Job description, duties and responsibilities
- Basic salary as well as other compensation or benefits and details on payment
- Working hours and breaks
- Total number of holidays as well as holiday pay
- Notice periods for employment termination
- Probation period, if any
- Reference to collective agreements
Employment agreements in Norway may be either temporary or permanent. However, fixed-term agreements are subject to certain preliminary conditions and cannot exceed twelve months.
It is possible for employee and employer to agree on a probationary period which should, however, not exceed six months.
Working Hours and Breaks
According to the Working Hours Act, standard working hours should not exceed nine hours within one day or 40 hours within one week. However, many collective agreements stipulate reduced weekly working hours – often 37.5 hours.
Employees must have a continuous rest period of no less than eleven hours between two consecutive working days and no less than 35 hours of uninterrupted rest per week. Where possible, weekly rest should fall on a Sunday.
Any work exceeding standard working hours counts as overtime. Employees should be paid an additional 40% of their normal wages for overtime work – up to double the usual rate for overtime work falling on a weekend. Overtime work is limited to ten hours per week and 25 hours over a four-week period.
It is common to pay employees once a month.
There is no national minimum wage in Norway. However, there are certain sectors where minimum remuneration rates are determined by collective agreements.
Employers are obligated to provide sick pay for their employees during the first 16 days of sick leave. For every additional day, employees receive sick leave benefits from the Norwegian National Insurance.
There are no legal provisions for a 13th salary.
Taxes and Social Security Contribution
Employees and employers in Norway are subject to the following tax and social security contribution rates (as of 2021):
22% corporate tax rate
25% VAT (standard rate)
22% flat tax rate on individual income including state, county and municipal tax
Additional tax on income over NOK 184,000: 1.7%; over NOK 260,100: 4%; over NOK 651,250: 13.2%; over NOK 1,021,550: 16.2%
14.1% of employee’s gross salary to National Insurance Scheme – might be lower depending on the region
8.2% of employee’s gross salary to National Insurance Scheme
Employees in Norway are entitled to 25 days of annual leave – including Saturdays. For employees over 60, annual leave is extended by an additional week, i.e. six working days.
An employee on leave receives holiday pay which is earned during the previous year and set aside by the employer for this purpose. For employees under the age of 60, holiday pay usually equals 10.2% of their annual salary.
Up to three weeks of annual leave must be granted during the main holiday period which stretches from 1 June to 30 September. In addition, Norway observes twelve public holidays – including Easter Sunday and Whit Sunday.
Maternity Leave and Paternity Leave
Female employees are allowed to take up to 18 weeks of maternity leave, twelve weeks before and six weeks after birth. During this time, they receive maternity benefits from the Norwegian National Insurance. Employers may make an additional contribution to fill the gap between the benefit level and the employee’s normal wages.
Two weeks of special paternity leave must be granted on the child’s birth. Depending on collective agreements, the employer may have to provide pay during this time.
Mothers and fathers are entitled to twelve months of joint parental leave for each child, i.e. the total of leave taken by both parents cannot exceed twelve months, including maternity leave. Ten weeks are exclusively reserved for each parent, the rest can be split between them as they wish.
Payments are issued by the National Insurance at rates of either 100% – for a maximum duration of 49 weeks – or 80% of the parents’ normal wages – for a maximum duration of 59 weeks. In cases where benefits do not equal the employee’s usual wages, the employer may have to cover the difference – depending on the individual employment contract.
Additional Leave and Benefits
Upon completion of the first twelve months of parental leave, parents can take another twelve months of leave to care for their child. However, this leave will be unpaid.
In addition to employment termination by default – i.e. in case of a fixed-term contract – resignation and mutual agreement, Norwegian law recognises the following grounds for employment termination (non-exhaustive list):
- breach of employment contract and gross misconduct
- redundancy, downsizing or any other business-related reason
- long-term illness – under certain circumstances
- continuous underperformance or incapability
The length of the notice period depends on the employee’s length of service and age:
- during probation period: 14 days
- less than five years of service: one month regardless of employee’s age
- between five and ten years of service: two months regardless of employee’s age
- more than ten years of service: between three months for employees under 50 and six months for employees over 60
The maximum notice period for employees wishing to resign from their post is three months. No notice is required in case of a summary dismissal due to gross misconduct or breach of contract. There are no statutory regulations regarding severance pay in Norway.
Hiring in Norway?
Not sure if you should start with a contractor or go ahead and hire a full-time teammate in Norway? The Lano platform makes it easy to go from freelance to full-time employee. Get expert guidance from the Lano team to compare your options and keep growing.