Payroll is one of the most important services of Ecovis in Norway, and we ensure to perform this as a service with a high focus on compliance and doing it correct. We work consistently with this through going to courses, updating ourselves on the newest regulations and use payroll systems which leave less room for error. Whenever an employer has an employee which receives salary for work performed in Norway, this needs to be payrolled and reported to the Norwegian tax authorities. We have extensive experience in assisting both foreign and local companies with payroll services.
We are especially focused on the foreign cases where we also may combine our payroll service together with legal services – which may assist in tax matters, and mobility services – which may assist in obtaining work permits, ID-controls and tax cards. As a combined service, this enables foreign and local companies to operate fully compliant when having employees in Norway, either directly through a branch company, as a limited liability company (LLC/AS) or through our employment services which acts as the employer of the employees
and handles all the hurdles of having employees in Norway.
How does it work?
There are numerous elements that must be considered upon running a payroll in Norway. Mainly,
these consists of:
1 Having an entity (or using an employment solution)
2 Registering information/onboarding employees and company policies
3 Running the payroll monthly
4 Reporting the payroll monthly
5 Taxes and social security levels
1 Whenever the necessity of running payroll in Norway occurs, there is also the need of an entity in
which the salary of the employees and taxes are reported through. This may be either a LLC or a
branch of a foreign company.
2 After having an entity, the set-up of payroll may begin. This involves gathering all the relevant
information about the employees and the entity settings. We normally advise to utilize a payroll
system which organizes all the information and to send/receive payroll information with the
authorities, but it’s also possible to run the payroll directly in the government portal altinn.no.
In short, these are the requirements:
For employees
- Full name
- Address
- D-number og Social Security Number
- Tax card (must be applied by each employee)
- Bank account number
- Work contracts
For the entity - Name, address, organizational number, sub-entity
- Company policies such as holiday pay rate, payroll dates and miscellaneous settings applicable for
the company
3 Running and reporting the payroll must be done as a minimum monthly (even if there are no
figures to report).
4 The payment of taxes and social security must be done by the fifth of the following month.
Everything is reported through a government portal called altinn.no, which communicates directly
with the government.
5 Taxes on salary in Norway is progressive and varies depending on the salary an employee receives.
These are subject to change yearly and as of 2022 they are*:
Income tax – 22 %
Bracket tax (in addition to income tax)
Bracket 1 – Income between 190 350-267 899 – 1,7 %
Bracket 2 – Income between 267 900-643 799 – 4,0 %
Bracket 3 – Income between 643 800-969 199 – 13,4 %
Bracket 4 – Income between 969 200-1 999 999 – 16,4 %
Bracket 5 – Income over 2 000 000 – 17,4 %.
Social Insurance contributions – 8,0 %
*There are exemptions and variations based on geographical place of work, age, as well as other
elements.
Employers also needs to pay social security, which is 14,1 % of gross salary with variations based on
other elements as well.
Holiday pay in Norway is often a confusing element which requires some explaining. The normal
rates are either 10,2 % or 12 % of gross wage which is accrued monthly. 10,2 % holiday pay
equivalates to 21 days holiday, and 12 % is equivalent to 26 days holiday. This is accrued on top of
salary each month, and paid to the employee the year after it is accrued, normally when the holiday
is taken (June/July).
In any company with more than one employee there is a mandatory pension saving scheme with a
minimum rate of 2 % of gross salary. In this relation the company will have to appoint a pension
provider which will invoice the pension amount in addition to a handling fee.
A great tip is to use this calculator from the tax authorities to estimate the actual taxes on a given
salary: https://skattekalkulator.app.skatteetaten.no/#/skattesubjekt
ECOVIS is a leading global consulting firm with its origins in Continental Europe with over 9000
employees in 80 countries. In Norway, ECOVIS assists international companies with compliance and
global mobility, from company registration through work permit application, legal advice, house
finding, VAT returns, tax advisory, accounting to annual tax declerations.