Secondment to Norway and payroll - Consulting
Regulations and Norway specific requirements are to be carefully considered when posting employees to Norway. Topics such as value added tax, permanent establishment and hired labour may be of concern and require further attention when choosing to do business in Norway.
Generally, deploying an employee to Norway results in the taxation of the reported income (withholding tax) and the requirement to pay social security contributions to Norway (employee and employer). Under certain circumstances, exemptions from such duties can be made. Amongst other things, the tax office makes use of the information within the Assignment & Employee- Register (OAR) to evaluate the taxability of an employee.
Registration of workers in Norway
All workers sent to Norway need to be registered in the so-called “Assignment & Employee- Register” (in Norwegian: oppdrags- og arbeidsforholdsregister, form RF1198/1199). Upon arrival, the employees need to present themselves at a tax office to undergo an ID-check.
Company perspective
- Evaluation of the project: Service agreement or hired labour
- Assessing the possibility of a permanent establishment coming into existence
Employee perspective
- Receiving a personal number (D-number) and the tax card
- Tracking the length of stay in regards to the 183 days rule.
Service agreement or hired labour?
The Norwegian tax authority wants to know, whether the foreign company is either offering a specific result-based service (enterprise/service agreement) or whether the foreign company offers a supply of work force (hiring out of personnel) to be able to apply the relevant tax rules to the company and its employees.
Option 1: Hired labour
From a company perspective, generally no permanent establishment is coming into existence if work force is being supplied to Norway, as the hiring out of personnel is not being seen as a distinct project or activity.
Employees are deemed taxable to Norway from their first day of work as the 183 day exemption does not apply if they have been hired out.
Option 2: Enterprise/service agreement
From a company perspective, a permanent establishment may come into existence, depending on the duration of the project. Depending on the tax treaty, the threshold for the project duration usually lies between 6 and 12 month.
If an employee is working in Norway within the framework of an enterprise contract, the 183 day exemption rule can generally be applied.
To be able to distinguish between hired labour and a service agreement, the following criteria are to be assessed:
- Is the employee incorporated into the receiving company or not?
- Who is responsible for the results that the employee is achieving?
- Who is responsible for the workplace where the work is carried out?
- Is a result-based service or an hourly rate for the workforce being invoiced?
- Who do the tools and materials in use belong to?
- Which company has a say over the qualifications and the number of the work force?
Hiring of labour from staffing enterprises: Restrictions and Bans
After some issues, Norway has introduced regulations aimed at reducing hiring of labour from staffing enterprises.
In this context, for example, hiring of labour should generally not be allowed on construction sites in Oslo and the surrounding areas. The Norwegian supervisory authority, Arbeidstilsynet, provides information about this on the following website.
However, hiring of labour will still be possible in certain cases. An overview is provided on the Altinn website.
A requirement for hiring of labour is, among other things, that the staffing enterprise must be approved by the Norwegian supervisory authority, Arbeidstilsynet. The authority provides information about this on the following website.
Hiring of labour in Norway: Special Regulations
A less strict regulation may apply if employees are being hired out not by staffing enterprise but by another company (so-called production company). In such cases, a production company (borrower) is permitted, under certain conditions, to temporarily hire out its own employees to other companies. The key requirements are as follows:
- The employee is permanently employed by the borrower;
- The employee's assignment is in the same professional fields in which the borrower is primarily active;
- No more than 50% of the permanent employees are leased by the borrower to other companies.
Additionally, it must be checked to what extent the case needs to be discussed with the employee representatives in the companies.
The Norwegian authority, Arbeidstilsynet, provides more detailed information about the requirements for occasional hired labour.
The 183 days rule
According to Article 15 of most tax conventions that Norway has signed with other countries, salary is generally taxable to the country in which the work is being performed. Hence, work performed in Norway is taxable to Norway at first glance.
Should the 183 day exemption be applicable, then the salary earned by the employee is taxable to the country in which he is a tax resident. One has to keep in mind that this exemption is only applicable, if the other requirements stated in Article 15 are met. This means that if one condition is not satisfied, the person becomes taxable where the employment is being exercised, even if the stay was shorter than 183 days.
Travel Costs Related to Work Assignments in Norway
Employer expenses for accommodation, return trips, and meals can be reimbursed tax-free, provided this is allowed under Norwegian travel expense law. A condition for tax-free reimbursement of these costs is typically the classification of the trip/stay as a business trip (tjenestereise / yrkesreise) or commuter stay (pendleropphold): the Norwegian tax authorities explain classification issues in the Skatte ABC.
Business trips are treated more favorably for tax purposes than commuter trips: for example, flat rates for meals are higher for business trips - an overview is available on the Altinn website.
As stated in the official Skatte ABC manual, the exact distinction between business trips and commuter trips is often difficult. If the stay lasts longer than 6 months, it is generally assumed that the stay is no longer a business trip—rather, it may be considered a commuter stay. The Norwegian tax authorities have provided a guide to determine whether a commuter stay exists in the tax sense. More information about eligible commuter costs is available on the following website.
A- messages
Irrespective of the length of stay, gross salaries (including allowances) earned in Norway need to be reported in monthly payroll returns, called A-messages (in Norwegian: A-melding). Generally the tax office will claim income tax and social security contributions on the reported salary, even if one can assume that the salary should not be taxable to Norway according to a relevant tax convention. Only once proof over social security coverage and once an application for an exemption from the duty to deduct withholding tax has been handed in and approved, can the claims be reduced to zero.
Should an employee be taxable, his reported income will be taxed after the PAYE scheme or based on the assigned tax card. If an employee has not undergone an ID-Check, they will not be given a tax card and preliminarily be taxed with 50 % instead.
Taxation
If a worker is deemed not to be taxable to Norway, an “application for exemption from the obligation to deduct taxes” needs to be filed. Normally, such an exemption is granted.
Tax treaties defer from country to country, but at a glance, we can summarize:
If a worker is working for a Norwegian limited company, he/she will be taxable! If the worker is working for a company from another country with a permanent establishment in Norway, he/she will be taxable as well. If the worker is working for a company from another country without a permanent establishment in Norway, he/she will only be taxable if he/she is in Norway more than 183 days** within any 12 months period.
Employees working on a hire of labor agreement are always taxable!
** applicable for most countries, e.g., Germany
"PAYE" Procedure: Final Taxation for Wage Income
In Norway, foreign employees often have the option to tax their wages not in the "normal" way, but through the "PAYE" scheme ("Pay As You Earn"). The Norwegian Tax Administration provides information about the PAYE scheme on their website.
The PAYE scheme has fixed tax rates (flat rate):
- If no social insurance contributions are collected in Norway: 17.3% (2025)
- If Norwegian social insurance contributions are to be paid: 25%
Social Security in Norway
When people enter Norway to work, they will usually become members of the mandatory Norwegian National Insurance Scheme from their first day of work. They and their employer are obliged to pay National Insurance contributions. However, the obligation to pay social security on top of the contributions to the social security scheme in the home country can be avoided if you apply for a so called A1 form (or similar forms for non-EU countries). It is important that the A1 certificate is issued electronically, as the Norwegian social security institute “NAV” requires personal social security information to be sent digitally by most EU member states.
Generally, the Norwegian social security contribution rate for employees is 7,7 % and 14,1 % for employers on the reported gross salary (2025).
However, it should be noted that making contribution payments does not automatically result in coverage. The Norwegian social insurance authority, NAV, provides information on membership in the Norwegian social insurance system on the following page.
Minimum Wage in Norway
Even if there is no general minimum wage in Norway, minimum wages have been introduced in certain sectors in general application of collective agreements. Among others, the following sectors have agreed minimum wages:
- Building and construction
- Electricians
- Cleaning
- Hotel and restaurants
- Drivers (tour buses, freight transport)
Minimum hourly wage within construction example:
- For skilled workers: NOK 250,30
- For unskilled workers without any experience of construction work: NOK 226,90
- For unskilled workers with at least one year’s experience of construction work: NOK 235,80
The rates apply from November 2024.
Overtime supplement
Pursuant to section 10-6 (11) of the Working Environment Act, an overtime supplement equal to 40% of the hourly rate shall be paid.
For work on construction sites, the employer shall cover necessary expenses for travelling and housing.
For detailed information, we strongly recommend to look at this link:
https://www.arbeidstilsynet.no/en/working-conditions/pay-and-minimum-rates-of-pay/minimum-wage/