When foreign companies post their employees to Norway for short term assignments, they often face a series of questions on how to properly handle the various registration and reporting obligations for their employees.
1) Registration and work permit
For EU/EEA employees, they must visit a local tax authority to perform ID-check and apply for D-number and tax card. A registration at the police is also compulsory if their stay is longer than 3 months.
Non-EU employees posted to Norway must apply a work permit before they can legally work in Norway. A d-number and a tax card will be automatically assigned after the person has effectuated the work permit.
2) The A-melding
Foreign companies must report A-melding when having employees in Norway. The A-melding is a monthly report for the employer to report salaries, benefits in kind, withholding tax and employer’s contribution on national insurance to several Norwegian authorities. There is no exception for the reporting obligation even if the assignment in Norway will only last a couple of months.
The employer must report salaries and deduct tax every month. Foreign companies might be granted an exemption for paying employer’s contribution on national insurance if they have A1 form from home country. Withholding tax can sometimes also be exempted if the project is not deemed tax-liable in Norway.
3) Insurance and Pension
The employer is required to subscribe Occupational Injury Insurance for all its employees. The insurance is widely provided by most insurance companies and the price varies depending on types of work. This insurance can be replaced if the foreign company already cover a similar insurance in home country, via commercial insurance company or statutory scheme.
It is also required for most companies with at least 2 fulltime employees, the employer must subscribe mandatory occupational pension scheme for employees. The minimum requirement is 2% of yearly gross salary. The pension can be exempted if the foreign company has already a pension scheme in home country and can provide A1 form.
4) Tax-liability for employees
Whether the foreign employee is tax liable in Norway depends on many factors. We will only discuss here on a very general basis.
If the employer provide employees only as manpower to its client in Norway without taking any result responsibility, the employee will be tax liable for the income earned in this assignment from day 1.
If the employer is performing an enterprise project with result responsibility and it is not deemed to have a permanent establishment in Norway, the employees are not tax-liable as long as they stay less than 183 days in Norway during a 12-month period, and less than 270 days in Norway during a 36-month period.
5) PAYE-scheme
Norwegian Tax Administration has introduced a PAYE (Pay As You Earn) tax scheme for foreigner working in Norway on a temporary basis. This tax scheme gives you a reduced flat tax rate on all your earnings in Norway. The current rate is 25%. By choosing this tax scheme, the employee will also avoid filing regular tax return, as the tax is already calculated and paid every month when 25% tax is deducted by employer. The tax scheme can only be used for people who’s yearly income is under NOK 642 950 (threshold in 2023).