How to Hire Remote Employees In 

Norway

The Basics

Currency
Employer Taxes
Payroll Frequency
Official Language

Employment in 

Norway

Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors
Reduced overhead: Lower cost in expenses, payroll, benefits, and more.
Greater flexibility: Contractors can be brought on as-needed. If not a good fit, you simply don’t have to move forward with the contract.
Reduced legal risk: Contractors aren’t usually protected by employment anti-discrimination and workplace safety laws.
Disadvantages of Hiring Independent Contractors
Risk of Misclassification: Not only does this deny workers their proper protections, it can also result in steep penalties and damage to your company. If the IRS determines that employee misclassification has occurred, you will be liable for a percentage of the employees wages, FICA contributions, penalty fines, unpaid taxes, up to a year in prison, and more.
Lack of Control: Contractors are drawn to being independent because it gives them greater control over the work they perform and who they work with. Because they’re not employees, you can’t tell them what to work on and how it should be done.
Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.
Increased Scrutiny: Using Independent Contractors typically leads to an increased risk of being audited.

Set up a subsidiary in 

Norway

A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Norway can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Norway, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Norway.

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Paying Remote Employees

Paying employees in Norway is not the same as paying workers in your own country. Employees have to be paid using Norway’s employment and payroll standards.

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.

Norway

 Specific Information

Working Hours

The standard workday is 9 hours per day, with one hour included for lunch.

The typical Norwegian employee work five day weeks scheduled between 0600 and 1800 and has arranged work between 37 and 38 hours per week.

Overtime

Any hours worked in excess of 9 hours per day and 40 hours per week are considered overtime and employees must be paid at a premium rate of at least 40% over the normal rate, or provided time off in lieu.

Work hours should not exceed more than 10 hours of overtime per week, 25 hours of overtime per every 4 weeks, and 200 hours of overtime per every 1 year.

Payroll Tax

Employer

Minimum Wage

Payroll

Pay Cycle

13th Salary

This is not mandatory by law.

Leave

Paid Time Off (PTO)

PTO is calculated by the:

Public Holidays

There are 10 public holidays.

Sick Days

The duration of sick leave entitlement provided to workers is dependent on how long they have been employed by their employer:

  • In general, employers pay for the first 16 calendar days of sick leave. The Norwegian Labor and Welfare Service (NAV) pays from the 17th day forward, unless different terms are stated in the employee’s contract or CBA.
  • Employees must notify their employer if they are absent due to illness.
  • Unless otherwise negotiated with the employer, sickness benefits are limited to six times the National Insurance basic amount per year.

Maternity Leave

Female employees are entitled to paid maternity leave for 3 weeks prior to giving birth and must take a leave of absence for the first 6 weeks after birth unless able to provide a medical certificate indicating it is better to resume work.

Parents are entitled to a leave of absence for a total of 47 weeks, or up to 57 weeks with reduced benefits, before the child’s third birthday.

Paternity Leave

Male employees are entitled to 2 weeks’ unpaid paternity leave.

Parents are entitled to a leave of absence for a total of 47 weeks, or up to 57 weeks with reduced benefits, before the child’s third birthday.

Parental Leave

There are no provisions in the law regarding paternity leave.

Other Leave

None.

Marriage Leave

None.

Bereavement Leave

None.

Termination

Termination Process

The main form of dismissal is with prior notice. Such dismissal must either be objectively justified on the basis of circumstances relating to the undertaking, the employer or the employee.

If termination is related to curtail or rationalization related to the undertaking, the termination is not objectively justified if the employer has other suitable work in the undertaking to offer the employee.

Furthermore, when deciding whether a dismissal is objectively justified by curtailed operations or rationalization measures, the needs of the undertaking must be weighed against the disadvantage caused by the dismissal for the individual employee.

Additionally, where employees are dismissed on the grounds of circumstances related to the business or organization, the criteria for selection of employees for dismissal must be objectively justified.

An employee who has been dismissed, owing to circumstances relating to the undertaking, has a preferential right to a new appointment at the same undertaking, unless the vacant post is one for which the employee is not qualified.

The statutory notice period for an employer when dismissing an employee varies between 1 and 6 months

There are no statutory provisions on severance or redundancy payment.

Notice Period

The notice period in Norway is:

The statutory notice period for an employer when dismissing an employee varies between 1 and 6 months, depending on the term of employment, age and length of service with the company. It is most common to agree to 3 months’ notice.

Employees giving notice normally have to observe notice periods as agreed to in the employment contract, but these cannot be longer than 3 months.

Severance Pay

There are no statutory provisions on severance or redundancy payment.

These can be included in collective agreements.

Probation Period

Probationary periods in Norway are typically between 3 and 6 months.