No matter what country you decide to expand to, your employees will be primarily concerned with their compensation and benefits. When developing a company in Norway, employers must fully understand the country’s compensation laws and benefit requirements to make sure they stay compliant. You should also offer additional benefits employees may expect as part of your Norway benefit management plan.
Working with G-P is the key to expanding faster and staying compliant. We’ll hire employees to work for you and dole out the correct compensation and benefits to every single worker. As the Employer of Record, we’ll be held compliant instead of you.
Norway Compensation Laws
Norway’s compensation laws do not dictate a general minimum wage, however, minimum rates have been introduced for a number of sectors via collective agreements. It’s crucial to check if your industry or employees are covered by a collective bargaining agreement (CBA), as this agreement may stipulate a minimum wage. The country does have standard overtime pay, which is at least 40% more than the employee’s typical rate. You can also give time off instead of payment.
As of November 2022, jobs requiring a bachelor’s or master’s degree have a minimum salary requirement. Positions requiring a bachelor’s degree must pay a gross annual salary of NOK 417,900 while positions requiring a master’s degree must pay a gross salary of NOK 449,900.
The Norwegian Holidays Act mandates employers to give a four-week and one-day annual holiday entitlement, but most offer five weeks of vacation depending on the CBA or employment contract. Employees must also receive a minimum holiday pay of 10.2% of the annual remuneration. Holiday pay is 12% if the employee is entitled to five weeks and 12.5% for employees more than 60 years old.
Guaranteed Benefits in Norway
Norway benefit management includes offering certain guaranteed benefits to your employees. For example, the country celebrates 10 public holidays during which employees receive the day off. You’ll also need to provide 16 calendar days of sick leave, with the Norwegian Labor and Welfare Service (NAV) paying for the 17th day forward. However, these requirements can change based on your employment contract or CBA.
Another guaranteed benefit in Norway is public health insurance. All Norway residents receive free treatment at public hospitals or can opt for treatment at a private clinic if they pay the full cost. Private health insurance is growing in Norway, which employers should keep in mind in case it becomes a guaranteed benefit in the future.
Norway Benefits Management
Your Norway benefit management plan must also include any supplemental benefits that employees may expect. A strong benefits plan can set you apart from other employers and attract a top level of talent. For example, many employers in Norway offer stock options to consultants, managers, and other employees in high positions. G-P recommends budgeting around 20% on top of your employee’s gross salary for benefits.
Restrictions for Benefits and Compensation
Most benefits and compensation restrictions come from a CBA. Go over both the CBA and the employment contract to make sure you give employees the correct minimum wage and benefits.
Norway Competitive Benefits Planning
Pursuing business growth in a new country requires an intelligent strategy for meeting employee needs and recruiting top talent. As you establish your company in Norway, designing a competitive benefits plan is key.
Norway Employee Benefits Plans
Offering benefits that meet market standards, legal regulations, and employee expectations is critical to establishing your business in Norway and building an engaged team.
Beyond keeping your company compliant, the benefits you provide should show your employees that you appreciate them and want to set them up for success. You can offer perks such as travel reimbursements or company mobile phones to help your employees work more effectively. Other fringe benefits that are common but not required include:
- Professional learning resources
- Housing and accommodation assistance
- Child care
Requirements for Employee Benefits in Norway
The National Insurance Scheme covers a wide range of services for employees. All residents of the country must be members, and employers are required to contribute. Working with this nationally provided coverage, employers are responsible for offering the following benefits:
- Holiday leave
- Sickness leave
- Disability leave
- Maternity and paternity leave
- An additional six days of leave for employees over 60
- Mandatory occupational pensions in addition to state-funded pension
How to Design Your Employee Benefits Program
Every country has different laws and expectations surrounding benefits. Still, the fundamentals of designing benefits plans remain the same. As you develop a custom benefits package for your employees in Norway, you can follow these basic steps.
1. Set Your Goals and Budget
Analyze your budget and current business objectives to set a starting point. Discuss key goals with stakeholders and define the resources you have available for employee benefits.
Knowing your budget and top business goals will help you allocate resources more effectively and leave room for continued growth internationally. For example, your initial goal might be to hire a large team to support your company’s growth. If that’s the case, you may need to keep supplemental benefits to a minimum to ensure your budget will cover the requirements for every employee.
2. Assess Employee Expectations
Understanding your employees’ needs is paramount to developing a competitive benefits program that offers value for your workers. You might send out questionnaires to local employees or conduct interviews to see which benefits they expect and which are most important to them.
During this stage, you might also research other local companies in your industry to see if you can match their benefits offerings.
3. Develop Your Benefits Program
After you finish your needs assessment, complete a gap analysis to identify your current capabilities and where your business can grow. Integrate the data you’ve gathered into a comprehensive strategy that prioritizes vital benefits for your employees. Be sure to include employee contributions, cost containment features, and administration expenses in your calculations as you plan for program costs.
Average Cost of Benefits Per Employee
The amount your company will spend on benefits is highly individualized and depends on how you build your program. During the development stage of planning, ensure you’re evaluating your available resources and creating a benefits plan that is sustainable in the long term. You might choose to set aside a percentage of total revenue to contribute to benefits each year.
How to Calculate Employee Benefits
As an employer, you are responsible for providing national insurance contributions for your workers. The rate you use to calculate contributions will be based on your zone, or the municipality where you have your head office. You’ll also need a calculation code based on the type of business you do.
To obtain exact percentages for your company’s contributions, you can consult with the Norwegian Tax Administration.
You can calculate the monetary value for the supplemental benefits you offer based on market standards in your industry and region.
How Are Employee Benefits Taxed in Norway?
You are responsible for reporting all deductible and taxable benefits you provide to employees. A general tax exemption is available for employer gifts and benefits up to a value of 5000 Norwegian Kroner (NOK). This tax exemption can apply to interest benefits, housing assistance, and other similar items. Most other types of benefits will be taxable, so you’ll need to complete your due diligence to determine appropriate tax rates.
Employee Health Benefits Plans
The National Health Insurance scheme covers health benefits for your employees. Your responsibility is to provide mandatory leave for health reasons, including sickness, maternity and paternity, and disability leave.
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