No matter which country you decide to expand to, developing a strong compensation and benefits plan will be crucial for attracting and retaining top talent. Before establishing your company in Norway, make sure you fully understand the country’s compensation laws and benefits requirements to remain compliant.
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 Bargaining Agreements (CBAs). It’s important to check if your industry or employees are covered by a CBA, as this agreement may stipulate more favorable terms than the minimum entitlements.
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.
In terms of overtime, employees are entitled to an additional compensation of at least 40% of their agreed hourly pay. If both employer and employee agree, then overtime may be partly or entirely taken as time off in lieu.
The Norwegian Holidays Act mandates a 21-day annual holiday entitlement, but some companies offer 25 days 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 5 weeks and 12.5% for employees over 60 years old.
Guaranteed benefits in Norway
The country celebrates 8 public holidays during which employees receive the day off. Companies are required to offer 16 calendar days of sick leave, and the Norwegian Labor and Welfare Service (NAV) is responsible for covering expenses from the 17th day onward. However, more favorable terms may be included in the employment contract or CBA.
Another guaranteed benefit in Norway is public health insurance. All Norway residents receive free treatment at public hospitals. Nonetheless, private health insurance is also growing and becoming more popular in Norway.
Norway benefits management
Your Norway benefits management plan should also include supplemental benefits. A strong benefits plan can set you apart from other employers and help attract top talent.
Restrictions for benefits and compensation
Most benefits and compensation restrictions come from CBAs. Review both the CBA and the employment contract to make sure you are providing the correct minimum wage and benefits.
Norway competitive benefits planning
Pursuing business growth in a new country requires a robust compensation strategy to meet employee needs and recruit top talent. As you establish your company in Norway, designing a competitive benefits plan that meets market standards, legal regulations, and employee expectations is critical to cultivate a successful and engaged workforce.
Norway employee benefits plans
Beyond keeping your company compliant, the benefits you provide should showcase your dedication and appreciation toward your team. Here are a few fringe benefits that are common but not required:
- Professional learning resources
- Housing and accommodation assistance
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. This national coverage includes the following benefits:
- Holiday leave
- Sick leave
- Disability leave
- Parental leave
- 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 international growth. 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 statutory requirements for every employee.
2. Assess employee expectations.
Understanding employees’ needs is paramount to developing a competitive benefits program that offers value. Consider sending out questionnaires to local employees or conducting 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 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 company 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.
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. At G-P, we recommend budgeting around 20% on top of the employee’s gross salary for benefits.
How to calculate employee benefits
Companies can calculate the monetary value for the supplemental benefits they offer based on market standards in their industry and target region.
To obtain exact percentages for these contributions, employers can consult with the Norwegian Tax Administration.
How are employee benefits taxed in Norway?
Employers are responsible for reporting all deductible and taxable benefits provided to employees. A general tax exemption is available for employer gifts and benefits up to a value of NOK 5,000. This tax exemption can apply to interest benefits, housing assistance, and other similar items. Most other types of benefits will be taxable, so employers need to take this into account to determine appropriate tax rates.
Employee health benefits plans
The National Health Insurance scheme covers health benefits for employees. Employers are responsible for providing mandatory leave for health reasons, including sickness, parental, and disability leave.
Partner with G-P to build your everywhere workforce.
As your partner in global expansion, G-P will handle payroll and compliance, so you can focus on growing your team and scaling your business. Our market-leading Global Growth Platform™ is powered by the first fully customizable suite of global employment products and backed by the industry’s largest team of in-country HR and legal experts to streamline payroll management and help you offer competitive, compliant local benefits.
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