How to Report Salary

Previously, salary reporting for foreign employees working on projects in Norway had to be done manually via Altinn. Today, this process can be handled more efficiently through a payroll system such as Tripletex.

All employees must first be registered with essential information such as D-number, position, and contact details. Once that is done, the reporting becomes more efficient, as the information is stored and automatically reused. The A-melding – the monthly report to the Norwegian Tax Administration – can also be submitted directly through the payroll system.

The most time-consuming part of the process is the setup of employees in the system. All data must be correctly entered to ensure complete and accurate reporting.

In addition, the payroll manager must have an overview of which project the employee is working on (client, project duration) and whether the individual will be staying in Norway for more than 183 days over 12 months, as this affects tax liability.

D-number

All employees without a Norwegian national identity number must obtain a D-number before they can start working in Norway. The D-number is a temporary identification number, which is also required when applying for a tax deduction card.

Usually, the employee must attend an ID check at one of 48 designated tax offices to receive a D-number and tax card. Leinonen can assist throughout this process. The D-number is also used to register in the National Population Register.

NUF Number

To report employees in Norway, the company must have a Norwegian organization number. If you only have a foreign company, a Norwegian-registered foreign enterprise (NUF) must be established. We can assist with this registration.

If the company is already registered in Norway, the company responsible for the payroll must be registered as the accountant through a Coordinated Register Notification in Altinn. The notification is sent to the general manager for signing. Once approved, the accountant gains the necessary rights to report salaries.

HSE Card

In some industries – particularly construction and cleaning – it is mandatory for all employees to have an HSE (Health, Safety, and Environment) card. This functions as an ID and shows who the employer is. On construction sites, the card is required to access the premises.

The employer is responsible for ordering HSE cards, but we are happy to assist with the entire ordering process.

Payslips

If your employees are liable to pay tax in Norway, you as the employer are required to send payslips to each employee. If you are using a payroll system such as Tripletex, the payslips are sent securely via encrypted email to each employee, protecting personal data. Payroll runs must always be approved by the employer before the payslips are distributed.

Permanent Establishment and Tax Liability

If your business operates in Norway for more than 12 months, the Norwegian authorities may consider it a permanent establishment. This means the company becomes liable for tax in Norway for income generated locally.

At the same time, employees become taxable in Norway for income earned there – regardless of where they live. If they also have taxable income in another EU country, double taxation is avoided through tax treaties. Tax is paid in the country where the income is earned.

Get in Touch

Reporting salaries for foreign employees in Norway requires a good understanding of both regulations and practical solutions. D-numbers, tax cards, the A-melding, and any HSE card requirements must be handled properly to avoid errors and delays. Using an efficient payroll system simplifies the process, and professional support can save you both time and resources. Leinonen Norway has solid experience and will guide you safely through the entire process – from registration to reporting and advisory services.

Get in touch – and we’ll take care of the rest!

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What is an annual report?

An annual report is an overview of the company’s financial situation during the year. It also shows the company’s operating profit at the end of the year, as well as it’s income and expenses. For many business owners, the operating profit is the most important thing, but remember that the balance sheet (assets, liabilities and equity) and the notes must also be included. The notes explain the various items in the accounting in more detail. The deadline for submission is 31^st of July each year. It is important to remember that the general meeting must approve the annual report no later than 6 months after the end of the financial year.

Which companies need to submit an annual report?

All companies that are under the accounting obligation must submit their annual report. This applies to: AS (private limited company), ASA (public limited companies), NUF (Norwegian registered foreign businesses) that are subject to Norwegian taxation, BRL (housing cooperatives) and BBL (house building cooperatives), foundations, public corporations, unit trusts and jointly owned shipping companies. ENK (sole proprietorships) that have assets with a value of more than 20 000 000 NOK or an average number of employees of more than 20 man-years must submit an annual report, while those that do not meet these criteria are exempt from the requirement to submit it.

Is there anything new in 2025?

It is still possible to submit an annual report manually via Altinn, but the submission must be made via a standardized form that is retrieved from the accounting program. It is strongly recommended that the submission is made via a system with support for an annual report. Many modern accounting systems have a solution for delivering the annual report directly to Altinn. We deliver annual reports via Tripletex for most of our clients.

Why do company owners need to submit an annual report?

Annual reports are submitted every year, because the Norwegian authorities would like to have an open business sector. The financial figures will be available on websites such as Proof and Purehelp. That means that your customers, suppliers, investors or anyone considering applying for a job at your company can see the financial results of your company.

Contact us

If you would like to send an annual report for your company, just contact us here.

The post The annual report in 2025 appeared first on Leinonen Norway.

What is a tax return?

A tax return is a report to the Norwegian Tax Administration that contains information about the company’s income, expenses, assets and liabilities. Other relevant financial matters are also included in the tax return and form the basis for the tax calculation for the previous year. The deadline for submission is usually 31^st of May, but in 2025 it is 2^nd of June. The reason for this is because 31^st of May falls on Saturday in 2025, that’s why the deadline is postponed.

What’s new in the tax return in 2025?

The most important change for business owners of a private limited company (AS) or a Norwegian branch of a foreign company (NUF) is that submission must be done through an accounting program. For sole proprietorships (ENK) it will still be possible to submit it manually on Altinn, but it is recommended to submit it from a system. The reason for this is that the submission process is more efficient, and many unnecessary errors are avoided compared to the old method. We use Tripletex, which is ready for the new solution.

Tax assessment in 2025

You will receive a preliminary tax assessment immediately after submission. However, business owners must wait until autumn for the final tax assessment, usually it comes in October. At that time you will be notified whether you will receive a tax refund or have to pay tax back.

Benefits for business owners

The new solution offers many benefits. The main benefit is the increased quality of submitted tax return. This means that the tax calculation will be correct, and you will not have to spend a lot of time on corrections. It will also be a simpler process for accountants, because more information will be filled in automatically and you will receive feedback on possible discrepancies before submission.

Both the Norwegian Tax Administration and the system providers have put a lot of work into the new solution, and it has already been gradually implemented since 2021. In 2025 the new solution should work much better than in previous years, since many errors have been corrected.

Contact us

If you would like to send a tax return for your company, just contact us here.  

The post Tax Return in 2025 appeared first on Leinonen Norway.

Before undertaking business activity in Norway, it is necessary to choose which type of legal entity to form. Depending on how many employees will be in the company, how much risk you are willing to take and what future plans are, certain legal entities will suit you better than other. Therefore, an investor should pay special attention when determining the appropriate corporate form since this will help to achieve goals that are set while meeting all legal requirements.

The most common legal entities in Norway are:

• sole proprietorship (ENK),
• Norwegian branch of a foreign company (NUF)
• private limited company (AS).

The easiest way to start a company in Norway would be a sole proprietorship (ENK). This is because this legal entity doesn’t require a minimum share capital, and the process of registration is quick. The founder makes all decisions by him/herself and may use the profit after tax return is submitted. Note that the owner has a full financial risk.

Setting up business in Norway is easily done through the Brønnøysund Register Centre. Altinn is the official website that provides all the information for establishing and running a business in Norway. There you can find relevant information and guides about registering your business and operating in Norway.

It is interesting to notice that 68% of all companies in Norway have no registered employees. 16 % of all companies have 1 to 4 employees. So, 84% of all Norwegian companies are small, micro companies. Only 1% are the companies which have between 50 and 99 employees and 0,5% of the market are the companies with 100 to 249 employees. That means that the Norwegian market mostly consists of very small companies.

TAX AND VAT

As a standard, both local and foreign companies established as permanent entities and earning profits from Norway are liable to pay 22% Norwegian corporate tax on earnings. All companies are subject to the same Norwegian corporate tax rate. The tax is called “advance tax” and is usually paid in February and April the year after the profit was earned. Based on the last tax return, the final settlement is usually done in October the year after the accounting year. You can read more about it here.

Most Norwegian companies that sell goods and services must register for VAT, unless they sell something exempt (for instance health and cultural services, teaching) from VAT. Registration needs to be done after sales exceed NOK 50,000 during last 12 months. Other services can be exceptions from VAT (for instance export) the company still needs to do VAT registration and submit VAT reports. The standard VAT rate is 25%. The reduced rate for food and beverages is 15%. For passenger transport and tickets to cinemas, museums, etc. it is 12 % and for raw fish it is 11,11%.  Foreign businesses that have VAT-liable turnover in Norway must register in the VAT Register using the same rules as Norwegian enterprises.

ACCOUNTING

When do you have to register your company in Norway?
To start the business activity you need to get the organization number at the Norwegian Register of Business Enterprises. Let’s take a look on 2 most common legal entity types in Norway.

A PRIVATE LIMITED COMPANY (AS)

• minimum share capital 30 000 NOK is required
• accounting from A to Z needs to be done
• VAT report every 2 months needs to be submitted
• full accounting needed
• salaries must be reported in Norway
• risk limited in share capital in Norway
• employees pay tax in Norway
• highly trusted in Norway   

A Norwegian branch of a foreign company (NUF)

• VAT report every 2 months
• full accounting needed
• salaries have to be reported in Norway
• risk could reach the mother company in the home country
• in some limited cases it is possible to make an under 6 months installation project, where the company and employees pay tax to the home country
• poorly trusted in Norway, difficult to find clients or partners for cooperation

Private limited company and joint-stock company (AS)

A private limited company is the most common business form in Norway and is usually registered by small and medium businesses.  There are approximately 400,000 private limited companies in Norway out of a total 656 000 companies. With this type of legal entity, the minimum share capital is NOK 30,000 (approx. EUR 4,200).

Opening this kind of company is possible with one founder. General meetings and the shareholders make all the major decisions. It is also possible to have several board members and a managing director. The capital of such a company is divided into shares and the decision to transfer these shares can be taken only by the majority of the votes of the board members. It should be noted that when establishing a private limited company, you don’t need to have a board but at least a managing director needs to be appointed.

A joint stock company is a business form mainly for bigger companies. The required capital that is divided into shares cannot be less than NOK 1,000,000 (approx. EUR 83,000). The capital is divided into stocks and can be listed in the stock market. General decisions are made by the general meeting of the shareholders, whereas the daily decisions by the members of the management board.

A Norwegian Branch of a foreign company (NUF)

NUF is a Norwegian branch of a foreign company that is subordinate to a foreign company. The foreign company is responsible for the Norwegian branch, and they must follow Norwegian rules. The branch must assign a contact person or a managing director who has a Norwegian national ID or D-number, there is no requirement that the person must be a resident of Norway.

If you are planning to start a short-term project in Norway NUF might be a suitable choice. Whether NUF is liable to pay taxes to Norway must be assessed case by case. It is possible to pay taxes to the home country only in certain conditions. If an employee has been working in Norway for more than 183 days during the last 12 months, he or she is liable to pay taxes in Norway from the first working day.

Sole proprietorship (ENK)

A sole proprietorship is a company where a private person can register as an entrepreneur. The single-person business is the easiest and cheapest way to start a business in Norway. The main benefits of this form of business are that the registration process is quite quick, the registration price is low (NOK 2, 499 for electronic registration), no share capital is needed and it is easier to take the profit out of the company since there is no need to report any salary as long as there is only one owner without any other employees. However, the entrepreneur does not have the same social benefits as the employee as he/she is not classed as an employee. Sickness benefits are lower, and there are no unemployment benefits. Tax liability must be paid in advance, 4 times a year. This could cause cash-flow problems in the starting phase. The owner has full personal liability, including all debts. This form fits best for very small businesses, where the risks are low.

For more information, please take a look here.

What we advise

In general, we recommend a private limited company (AS) in most cases for someone who wants to start a company in Norway. This is because such companies have a better reputation and are more trusted in Norway among clients and suppliers. We have a lot of experience working with private limited companies and can offer you valuable advice.

Audit
For small companies, the auditor is usually not necessary. The audit is only needed when yearly turnover exceeds NOK 7,000,000 NOK, balance sheet assets amount is more than NOK 27,000,000 and the average number of employees reaches 10. It is called “opting out of audit”.

Employees
In Norway, there is no general minimum wage except for certain sectors. You can find more information regarding these sectors here.

Starting from 1st July 2024 new requirements to the employee contracts have entered into force. These contain more detailed information regarding employees’ rights and obligations. An employment contract must always be written. Employees must apply for a tax deduction card, which shows how much their employer must deduct before the salary is paid. The tax deduction will be 50% of the salary if the employee does not have a tax card.

Prices for registration of a company
For AS registration, the Norwegian government agency charges NOK 7,653 (NOK 6,500 for electronic registration). Electronic registration is possible if board members have a Norwegian identification number. For NUF registration, the Norwegian government agency charges NOK 3,925. The Leinonen office charges a fixed price of 25,000 NOK (+25% VAT) for the establishment process, including the application for a D-number.

EMPLOYMENT

The Working Environment Act regulates working life in Norway. It contains information about the working environment, working hours, and everything else that is a part of the relationship between employers and employees. The purpose of the Working Environment Act is to ensure safe employment conditions and equal treatment in working life.

Foreign workers are liable to pay Norwegian taxes and social charges always if they stay in the country for more than 183 days for 12 months. Your employer will typically arrange the registration with the Norwegian tax office and secure the social security number. Self-employed workers will need to arrange their tax registration and Norwegian social security number by themselves. Norwegian tax will be deducted from the gross salary of the employer.

Termination of the employment agreement at the probation period by the employee or employer may be carried out by providing two weeks’ written notice. After the probation period, it is much harder for an employer to cut the agreement.

PAYROLL

When is salary paid
Unless otherwise agreed, the salary usually is paid once a month. The time of payment of salary shall be in the employment contract. When paying salary, the employer must provide you with a paycheck that describes salary, tax deductions and any other deductions and additional benefits (mobile, Internet, etc.) If you do not get this, you need to ask your employer.

Vacation
All employees are entitled to at least 25 business days of holiday each year. Business days includes Saturdays. Sundays are not considered working days. Normally, six business days will correspond to one week. The employee thus has a requirement of four weeks and one day of holiday each calendar year. The holiday pay rate in this case will be 10,2 % of last year’s income.

The tariff settlement 2000/2001 gave many workers a fifth holiday week. This extra holiday also increases the holiday pay rate from 10,2% to 12 %.

Employees who reach the age of 60 during the holiday year are entitled to 1 week extra holiday and a 12,5% or 14,3% holiday pay base. You decide for yourself when you take this extra holiday, but you must notify the employer at least two weeks in advance.

Holiday Pay
As we just mentioned, holiday pay is earned the year before you take out your holiday, and this is called the earning year. If you haven’t worked the year before, you have the right to take a holiday anyway. But then you are not entitled to holiday pay.

Not all payments are included in the calculation. For example, holiday pay shall not be calculated on payments relating to travel expenses, lodging, holiday pay paid during the earning year, or share of net dividends. Holiday pay from bonus and commission-based salary shall be calculated when this remuneration is a result of personal work effort.

Payroll Taxation
Every employee in Norway has an individual tax percentage or a tax card which the tax is calculated from. The percentage or the tax card depends on salary level. The tax is progressive. With low income, you get a lower tax, and thus with higher income, you get a higher tax.

Employers are demanded to deduct a deposit tax from Gross salary and pay only net salary to the employee. The deposit tax must each payroll be transferred to a special tax account and paid further to the tax authorities bi-monthly.

On salary, there are also employer’s national insurance contributions of 14,1% in general (some lower percentage in rural areas). Every employer is required to pay this tax bi-monthly to the tax authorities if there is payroll in the company.

A mandatory occupational pension scheme must also be added to each employee’s salary. The minimum is 2% of the employee’s salary.

A-REPORT
The A-report is a monthly report from the employer to NAV, Statistics Norway and the Tax Administration on employees’ salaries, working conditions and withholding tax, as well as the employer’s national insurance contributions and financial tax for the company.

Anyone who has employees, or pays salary or other benefits, must submit a notification. It is important to remember that even though the employee doesn’t receive any salary for some period of time, the A-report still needs to be submitted by the employer. It is called “0-message”.

The A-message contains information on salaries and benefits, in addition to the status of all working conditions

The due date for A-report is the 5th of the month after the payroll.

FOREIGN WORKERS

The citizens of the member states of the European Union and the European Economic Area have the right to work in Norway. Registration is not necessary for those who come from Sweden, Denmark, Island and Finland. Workers from other EU/EEA need to register themselves with the police during the first 3 months in Norway. You can find more information here.

As a general rule foreign workers living or working in Norway are obliged to pay taxes and contributions to the Norwegian social security system. It entitles to certain Norwegian social welfare benefits, such as unemployment benefits, basic healthcare in Norway, maternity and child benefits, and a Norwegian pension.

Note that if a foreigner works in Norway over 183 days during 365 days or 270 days during 3 years, he/she will have a tax obligation to Norway from the first day in Norway.

The post BUSINESS IN NORWAY appeared first on Leinonen Norway.

Do you need an accountant?

Many company owners buy a license from one of the accounting programs (Tripletex, Conta, Fiken, and many others) and think that since they now have a program, it will be fine to do their accounts by themselves. In a way, you could say that because Norwegian law does not require them to use an accountant. However, many of them often find that the need for an accountant shows up, often after they have tried to do the accounting by themselves for a while, discovered that they have made mistakes and need to submit a tax return and annual accounts.

What many company owners don’t think about when they start doing their accounting by themselves is that it takes much longer time to correct an error than just to do it right from the beginning. Even relatively small errors, for instance regarding VAT codes can lead to many hours of correcting them. The reason for this is that new bank reconciliations must be made, and new VAT reports need to be corrected and reconciled.

Another thing that many company owners who do their accounts by themselves don’t realize is that you don’t necessarily get notified every time you make a mistake if you use one of those programs. You can submit a tax return and annual accounts by yourself, but will it be correct? You can’t know that unless you are an accountant yourself and very few business owners are. In the worst case, you risk paying either too much or too little tax. You don’t need to think about it when a good accountant has submitted the tax return and annual accounts for you.

When an accounting firm submits a tax return for you it means that entries have been carefully checked and possible errors and discrepancies have been eliminated, because the whole year has been reconciled. There are often many hours of work behind such an annual reconciliation, but it is necessary for the result to be good.

Contact us

Contact us today and we will check your accounting and make it right again!

The post Can you do your accounting without an accountant? appeared first on Leinonen Norway.

When did this scheme come and what does the a-melding do?

The a-melding came into force on the 1^st of January 2015. It was introduced to simplify and coordinate employer reporting and meant that companies no longer needed to send 5 forms, as they were replaced with the a-melding which contained all the necessary information.

This is a digital report that sends information about employees from the employer to the Norwegian Labour and Welfare Administration (NAV), Statistics Norway (SSB) and the Norwegian Tax Administration. The a-melding contains information about the employee’s income, employments and withholding tax. In addition, it reports on employer’s national insurance contributions and financial activity tax.

Do all companies need to submit the a-melding?

All companies with employees must submit an a-melding every month, which applies to both those who have been paid a salary and those who have not received anything but are still registered as employees of the company. Companies without registered employees don’t need to submit the a-melding. If no salary has been paid, you only must report employments and the amount on the a-melding will be 0. The deadline for submission is the 5^th of each month.

The submission is usually done through a payroll system, but it is also possible to send it manually from Skatteetaten.no. We recommend sending it from our accounting and payroll program Tripletex.

Why is it necessary to submit an a-melding?

There are several reasons why an a-melding must be submitted every month:

• To report salaries for each employee, so that The Norwegian tax administration can calculate taxes for them.
• Statistics Norway (SSB) uses that information to prepare statistics on salaries, employment and sick leave.
• NAV uses the information to calculate parental and sick leave and unemployment benefits.

What happens if you don’t submit an a-melding?

If a company doesn’t submit a-melding by the deadline or submits it incorrectly, it may come a letter from the Norwegian Tax Administration regarding penalties. The penalty is NOK 131 per employee per day (2025). The penalty runs until the a-melding is submitted or the error is corrected and can be a maximum of NOK 1 314 000 (2025).

Contact us

It is very important to submit an a-melding every month to ensure that all information about employees is reported correctly and to avoid penalties. Leinonen Norway can help you with your payroll run and reporting of an a-melding so that you avoid unnecessary penalties. Contact us here.

The post The a-melding appeared first on Leinonen Norway.

Public holidays in 2025

• The year starts as usual with New Year’s Day. The 1st of January is a Wednesday.
• The next days off will be around Easter. 17th of April is Maundy Thursday and 18th of April is Good Friday. Some employees get the whole Wednesday or half a day off before Maundy Thursday.
• Easter Sunday is on the 20th of April and Easter Monday is on the 21st of April. Many shops have shorter opening hours on the Saturday before Easter Sunday.
• In May we have 3 public holidays, but for most employees only 2 of them will give extra days off. Labor Day is on the 1st of May, and it is a Thursday. Constitution Day is on Saturday 17th of May and for many employees that means there will be no extra day off. Restaurants are usually open on Constitution Day, but many other businesses are closed on Saturday anyway. Ascension Day is on Thursday 29th of May.
• In June there are 2 public holidays. Pentecost is on Sunday 8th of June and the 9th of June Pentecost Monday. Whit Saturday is on Saturday 7th of June and many shops have shorter opening hours on that day.
• In December there are 2 public holidays. Christmas Day is on Thursday 25th of December and Boxing Day is on Friday 26th of December. Christmas Eve is on Wednesday 24th of December, but even though it is not a public holiday, many employees still get either the whole day or half the day off. Wednesday 31st of December is New Year’s Eve, but it is a normal working day. Many companies give their employees half or the whole day off.

Legal entitlements for employees

Generally, employees have time off on all public holidays and Sundays (which are also considered as public holidays). However, there are still several exceptions for situations when an employee can and need to work on public holidays. The first exception allows work in those cases when the nature of the work makes it necessary. It can for instance be health institutions, security guards, newspapers, hotels and factories which operate 24 hours shift schedules.

The second exception applies to points of sale. For instance, cafes, restaurants, petrol stations, museums, kiosks and shops under 100 square meters. Finally, the exception applies to those companies which have a collective agreement (“tariffavtale”). It is possible to have an agreement to work on Sundays or other public holidays if there is a time-limited and special need for this.

Holiday pay and salary on public holidays

Many people wonder if holiday pay is affected by public holidays, so let’s take a look at this topic now. Holiday pay in Norway is earned the year before payment. The minimum rate is 10,2 % of the salary earned in the previous year, but many companies which have a collective agreement use a higher rate of 12 %. If you are employed in a company where the holiday pay rate is 10,2 %, that means you are entitled to 4 weeks’ holiday + one day each year. If the rate is 12%, it means you have a 5 week holiday. It is quite common in Norway that all accrued holiday pay is paid out in June instead of regular salary.  However, we must clarify that the calculation of holiday pay is based on so-called working days (Monday to Saturday) and this gives an average of 26 working days per month. 5 weeks’ holiday gives therefore 30 working days (5 weeks*6 working days= 30). When paying holiday pay, the employee must therefore be deducted 4 working days’ salary. If you have 4 weeks’ + 1 day holiday, that gives 25 working days. Therefore, with the 10,2 % rate on holiday pay, employees receive an addition corresponding to 1/26 of their salary.

Since the holiday pay is usually paid in June when we have no other days off, the calculation will be as we described above for these employees who have a fixed monthly salary. For hourly workers holiday pay is simply added to the salary for hours from the previous month and no deduction or addition is needed. It can also be useful to know the rules regarding salary on public holidays. If the employee has a fixed monthly salary, the payment will be the same regardless of how many public holidays there are in the month. The salary will therefore be the same if an employee works every single working day in a month when there are no days off and for instance in March when we have days off due to Easter or in May when there are often many days off each year. For an employee with an hourly salary, the situation is different. In this case employees only gets paid for the days they work. If an employee has a day off on a public holiday, there will not be any compensation.

Generally for companies which operate on public holidays, employees get a regular salary. However, many of these have a collective agreement and that means a compensation for a public holiday needs to be paid in addition to regular salary which is at least 50 % of the normal salary.

International Worker’s Day and Constitution Day

There are own rules which apply for International Worker’s Day and Constitution Day when they are on another day other than Sunday or another public holiday. In these cases, an employee receives full salary even if he or she doesn’t work that day, and this applies also to those who work on hourly basis. For example, if hourly employee works every Thursday and 1^st May falls on a Thursday, the employee has that day off, but still gets paid. The condition for receiving salary on this day when having a day off for hourly employees is that employee has been employed for 30 consecutive days before this public holiday. If employee works on a such day, the same compensation as on Sundays will be given, at least 50 % in addition to the normal salary. If 1^st May or 17^th May falls on Sunday, hourly employes who have time off will not be paid anything, while those who work will be paid the same as if they worked on a normal Sunday, both normal salary and Sunday compensation. Other compensations can also be agreed in the employment contract.

Employer’s obligations

Finally, we can mention some obligations that an employer needs to comply with when it comes to working on public holidays. If an employee work on a Sunday or another public holiday, the employee must usually have the following Sunday off. Exceptions to the rule can be made by written agreement with the employee. In these cases, it will be made an agreement based on the average calculation of Sunday and public holidays. In this case employee must have at least every 4^th Sunday off. In addition, employees who work on Sundays are entitled to get Sunday off either immediately before or after vacation.

Do you want to know more about public holidays and payroll in Norway? Please contact us here.

The post Public Holidays and Compensations in Norway appeared first on Leinonen Norway.

What are the employer’s national insurance contributions?

Employer’s national insurance contributions are the taxes paid by employers on wages in Norway to finance the national insurance system. Welfare benefits such as sickness benefits, pension and other social security benefits are financed through this tax. Rates vary from 0% to 14,1% depending on the type of industry and where in the country the company is located.

What are additional employer’s national contributions?

In 2023 a temporary law change was introduced with 5 % additional employer’s national insurance contributions on salaries over NOK 750 000. This law change was introduced to increase the contribution to the extraordinary expenses in the state budget. In 2024 limit for additional employer’s contributions was adjusted by NOK 100 000, so that it applied from the first NOK over NOK 850 000.

Discontinuation of additional employer’s national insurance contributions

From the very beginning, this law change was defined as “adapted to the situation and a temporary measure”. There is a good reason why this fee will be discontinued from the 1^st of January 2025. The law change was criticized because it has led to increased costs for employers when hiring highly qualified employees. Now that it is being discontinued, it will have several positive effects on Norwegian companies.

Benefits for business

It will certainly be easier for employers to recruit qualified workers, because of labor costs which will be significantly reduced. It will also reduce the likelihood of downsizing. Since labor costs will be lower, it increases the possibility of new hires and higher salaries or other benefits for current employees.

Employers should also evaluate if the 2025 budgets should be adjusted. Many companies use to pay out bonuses to their employees in December in Norway. Because of the discontinuation of additional employer’s national insurance contributions, it may in some cases be reasonable to wait with the payment until January 2025.

Contact us

If you want to make sure that reporting of employer’s national insurance will be done correctly during your payroll, just contact us here.

The post Discontinuation of additional employer’s national insurance contributions in 2025 appeared first on Leinonen Norway.

A brief introduction to VAT in Norway

VAT stands for value added tax and is called MVA in Norwegian. It is a tax on the purchase, sale, withdrawal and import of goods and services. All rules that apply for this tax are regulated in the value added tax law. It applies to the rules for when companies need to register in the Value Added Tax Register, how VAT needs to be calculated, what can give you a deduction and what VAT rates we have in Norway.

To be registered in the Value Added Tax Register a company needs to exceed NOK 50 000 in turnover within a year. When a company is registered there, you can add the abbreviation “VAT” (MVA) after your organization number, start invoicing with VAT and report VAT return. The reporting usually needs to be done every second month, but some companies do it once a year.

Value added tax was introduced in Norway in 1970, but the current value added tax law came into force on 1st of January 2010.

VAT rates

The standard VAT rate is 25% and applies for most goods and services. In addition, there is a 15 % rate for foodstuffs and beverages and 12 % on passenger transport, accommodation, cinema tickets, sport events, museums, etc.

In some cases we do not calculate VAT, but we differentiate between exemptions and exceptions. It sounds almost similar, but there are actually important differences between these 2 terms.

When we say that certain services are exemptions from VAT, we mean that a company doesn’t need to do registration in the Value Added Tax Register. This applies to health services such as doctors, dentists, psychologists and cultural services such as theatre and ballet performances.

For exceptions from VAT, we mean that we do not calculate VAT on the turnover and the rate is 0%. So you don’t need to add VAT on the sales invoices, but you still need to register in the VAT register and can claim VAT deductions on your expenses. Examples of exemptions are sale of used cars and books.

Frequent mistakes regarding VAT calculation

It is easy to make mistakes when you do VAT calculation and reporting. We have a lot of experience in correcting various errors and here are some examples.

Many companies (especially recently established ones) create a sales invoice with VAT before they have exceeded NOK 50 000 in turnover. In this case we recommend crediting this invoice and sending a new invoice without VAT.

Another mistake that comes up is that a company invoice without VAT, when it should have included VAT. In this case, you can also credit the entire invoice and send a new one with VAT. Alternatively, you can send a new invoice with only VAT without crediting the old one.

Many mistakes happens also when companies claim VAT deductions for things, they are not able to require deductions for. For instance, when hosting customers, VAT can not be deducted from the food expenses.

Using of wrong rate for expenses also happens, for example 25% instead of 12 % for passenger transport.

Another source of error is the reporting of remotely deliverable services purchased from abroad. VAT needs to be calculated and reported according to the so-called reverse charge. Our employees have a lot of experience with this type of reporting and will be happy to assist in such cases.

There are also many companies which make mistakes when they invoice international clients. The basic rule is that sales to foreign customers must be without VAT, but this requires that service or product is used outside of Norway’s borders. This means that if the customer’s delivery address is in Norway, the invoice must include VAT even though it’s a foreign customer!

Misunderstandings regarding exemptions and exceptions from VAT

Earlier in the article we presented the difference between exemptions and exceptions from VAT. So for instance healthcare or teaching services don’t need a VAT registration. However, the challenge comes when a company also work additionally with another type of activity which is not exempt from VAT. This activity provides a basis for calculating, reporting and paying VAT for the part of the turnover which is not exempt from VAT.

When it comes to exceptions from VAT, the rule is that the turnover gets a 0%-rate (for instance when selling books), and the company must be registered in the VAT register. Many people misunderstand these 2 terms and think that exemption is the same as exception, but that is not true. A company has the right to claim deductions on purchases, even if all turnover is excepted from VAT.

In addition, it is important to say that a company may have some turnover with VAT, some is exempted and some is excepted from VAT. It can seem confusing to most people, so it’s good to ask for professional advice before doing anything wrong.

Consequences of late VAT submitting and payments

It costs dearly to be late with the submission of the VAT return. If you do not report in time, a daily fine of NOK 638,50 will start running and the maximum amount can be up to NOK 63 850 (for 2024). Based on our experience, it usually takes some time before Norwegian Tax Administration will react. In this letter it usually says that enforcement fines will start one week after receiving the notice.

Interest on overdue payments will also apply and is 12,5 %.

Changes in the correction of errors in VAT return

A new VAT return was introduced in 2022. This made the way errors were fixed different than before. For VAT terms until the end of 2021, you should send an additional VAT return or a new correction for that term. This was done manually on skatteetaten.no. The new VAT return can be sent directly from an accounting program. If you have made a mistake and want to correct it, from 2022 you can reopen the period, make the change and send the new VAT return for the same term. But it is still possible to register a transaction in a new period as well.

Our experience with incorrect VAT reporting

After many years of experience we have seen lots of different cases of incorrect VAT reporting. It is often an employee in the company who has tried to do the reporting and without having enough expertise in the VAT regulations, things often go wrong. For instance we have seen a case where turnover which was reported was significantly lower than previously. It has been noticed by the Norwegian Tax Administration and the company had to go through a VAT check. Documentation was needed to be sent to control whether the report was correct. When it was discovered that submission was wrong, the company had to pay quite a big fine.

Conclusion

To summarize we would like to say that the regulations regarding VAT are quite complicated. To avoid mistakes, it is best to contact a professional accountant. We are ready to submit your VAT return!

The post Common VAT Mistakes in Norway and How to Avoid Them appeared first on Leinonen Norway.

Differences between Norwegian and foreign workers

Let’s start with the basics. All employees in Norway need to have a tax deduction card. Norwegian employees usually receive this card automatically each year based on last year’s income. This tax deduction card shows how much an employee need to deduct from the salary. We call it a withholding tax deduction. For Norwegian employees the rule is simple: the more you earn in Norway, the more tax you pay.

Foreign employees also need a tax deduction card, but they need to apply for it. Another important difference is that foreign employees can choose whether they want to be on a regular tax scheme or the simplified one which is called PAYE (Pay As You Earn). This tax scheme was introduced for foreign workers in Norway on 1th January 2019. In most cases this tax scheme will be relevant for foreign workers in Norway. This applies to those who plan a short employment relationship in Norway, if it is the first year they live in Norway and if they will have an annual income of less than NOK 670 000 (for 2024). Here are some other key points regarding PAYE:

• You pay 25% in tax and the tax rate will not vary if you have a variable income from month to month.
• If you have an A1 form from your home country and don’t need to pay national insurance contributions in Norway, you pay 17,2% in tax.
• You will not receive a tax return next year and your tax will be fully paid after the tax deduction has been done. This is different compared to the ordinary tax scheme where you receive and deliver a tax return the following year.
• It is not possible to claim any deductions, for example interest expenses or expenses for commuters.

It is important to be aware of that you can choose to be in the regular tax scheme instead of PAYE, for example if you know that you will earn more than NOK 670 000 in 2024. But based on our experience, PAYE is the right choice for most of foreign employees.

Key considerations to be aware of

There are some key considerations to be aware of when running a payroll for foreign employees:

• If you have an A1 and do not have to pay national insurance contributions in Norway, you need to send this form to NAV (Norwegian Labour and Welfare Administration). The Norwegian Tax Administration (Skatteetaten) will receive a decision regarding that from NAV.
• If there is a tax agreement between Norway and your home country which indicates that your income is not taxable in Norway, you can send an application to Skatteetaten (the Tax Administration) and get an ordinary tax deduction card and not be a part of PAYE scheme.
• If you have submitted an NT1 form (Nordic Tax Withholding Agreement) and you are deducted in another Nordic country according to the agreement, you can not be on PAYE scheme.

Last but not least, there are certain criteria that need to be met to have taxable income in Norway. You need to stay in Norway for more than 183 days during a 12-month period or your employer has a permanent establishment in Norway. In such cases your income is usually taxable.

Employing a foreign worker

Before hiring a foreign worker, it is important to check that this person has the right to work in Norway. The fact that someone has a tax deduction card is not a proof that this person is allowed to work in Norway! The easiest way is to contact UDI’s (Norwegian Directorate of Immigration) Employer Service (Arbeidsgiverservice) and check whether the person has the right to work in Norway. There are different requirements for employees depending on where you come from:

• If the employee is from Sweden, Denmark, Iceland or Finland, the person can work without registering with the police.
• If the employee is from EU/EEA, the person is allowed to work in Norway, but the registration with the police is required no later than 3 months after arrival in Norway.
• If you come from a country outside the EU/EEA, you would need to apply for a residence permit to work in Norway.

Foreign employees who do not have a Norwegian national identity number, would need to apply for a D-number. The D-number will also be used to apply for a tax deduction card.

Challenges related to the employment of foreign workers

There are some challenges related to the employment of foreign workers:

• The employer is obliged to check that the employee has legal residence in Norway and the right to work.
• The employer is obliged to obtain a tax deduction card, check whether the person has PAYE scheme, an A1 form and make correct tax deductions.
• Foreign employees need to carry out ID check at one of the Tax offices which provide such service.
• There is a minimum salary requirement for businesses covered by collective agreements.

Software

There are many programs that can be uses to run payroll in Norway. We have chosen Tripletex for our payroll processing and can guarantee that the entire process from employee registration to payment is handled by our experts in an orderly manner. We do all required tax reporting and send encrypted pay slips to the salary earner.

If you have used your own program for running payroll earlier, we can use it as well, but we recommend you to switch to Tripletex.

Our employees have a lot of experience with running payroll for foreign workers and can guarantee that both payroll run and tax reporting will be done correctly, as long as we receive all requested information.

More information

For more information regarding payroll for foreign employees, please contact The Norwegian Tax Administration (Skatteetaten) and The Norwegian Labour Inspection Authority (Arbeidstilsynet).

The post Managing Cross-Border Payroll and Taxation in Norway appeared first on Leinonen Norway.