Obligation to pay National Insurance contributions
Members of the National Insurance Scheme must pay National Insurance contributions. National Insurance contributions are stipulated as a percentage of personal income pursuant to the Taxation Act sections 12-2 and 12-10, cf. the National Insurance Act section 23-3. The rate for National Insurance contributions are decided by the Storting (the Norwegian parliament) every year. For 2008 it is:
- 7.8% of pay and other personal income
- 11% of income from self-employment/business activities and other personal income
For employees, National Insurance contributions are normally included in the employer’s deduction of withholding tax and they are included in the deduction tables. National Insurance contributions for self-employed persons with an obligation to pay such contributions are included in the advance tax. If an employee is not taxed in Norway, the National Insurance contributions must be paid to the local Norwegian Labour and Welfare Service (NAV) office.
Obligation to pay employer’s National Insurance contributions – foreign employers
Employers are obliged to pay contributions to the National Insurance scheme on wages and other remuneration for work and assignments carried out in or outside employment in Norway or on the Norwegian Continental Shelf. The obligation to pay employer’s National Insurance contributions is related to the obligation to report pay and other remuneration for work, cf. the National Insurance Act section 23-2 and the Tax Assessment Act section 6-2. The obligation to pay employer’s National Insurance contributions applies even if the employer is not engaged in activity in Norway that is liable for tax and irrespective of whether the employee is liable for tax in Norway.
Employer’s National Insurance contributions are calculated as a percentage of the pay and other remuneration paid for work carried out in Norway or on the Norwegian Continental Shelf. Employer’s National Insurance contributions are differentiated, with rates that vary between different geographical zones. The highest rate applies to Zone 1, which includes the Norwegian Continental Shelf and large areas of southern Norway. The rate for Zone 1 is currently 14.1%. The zone to which an employer belongs is decided on the basis of where he or she is registered. Foreign employers who are only registered with an address abroad in the Central Coordinating Register for Legal Entities must calculate and pay contributions at the rate for Zone 1.
If, however, an employee carries out more than half of his or her work in another zone than the zone in which the employer is registered, the rate in the work zone may apply to this work.
The employer is obliged, at his/her own initiative, to calculate the contributions and pay them six times a year, see 4.2.4.
If the employees are exempt from the Norwegian National Insurance Scheme persuant to a national insurance agreement or pursuant to the EEA Agreement, cf. Regulation (EEC) No 1408/71, the employer is exempt from the obligation to pay employer’s National Insurance contributions. Employees can also be exempted from the Norwegian National Insurance Scheme on the basis of the National Insurance Act. In such cases, the employer can apply for remission or a reduction of Norwegian National Insurance contributions if it can be documented that corresponding contributions are paid to the employee’s home country on the same wage payments. Applications should be sent to the International Tax Collection Authority.
Exemption from compulsory membership in the National Insurance Scheme for foreign nationals staying temporarily in Norway
Some employees may be exempted from compulsory membership of the Norwegian National Insurance Scheme. This applies, among other things, to so-called posted workers covered by the EEA Agreement or who are covered by a national insurance agreement entered into by Norway.
Pursuant to the EEA Agreement, cf. Regulation (EEC) No 1408/71, the principle is that a person shall be insured in the country in which he or she works. A posted worker, on the other hand, will in principle be covered by the national insurance legislation in his or her home country if the work in Norway does not last for more than 12 months. The national insurance authorities in the home country must issue confirmation or a certificate as documentation that the person in question is insured in his or her home country (form E-101). The form should be sent to:
NAV Madla trygd, P. O. Box 484, NO-4090 Hafrsfjord, Norway
Phone: 815 81 000 (from within Norway only)
Correspondingly, it is possible to apply for exemption or partial exemption from the Norwegian National Insurance Scheme under national insurance agreements entered into with countries outside the EEA area: Canada (separate agreement with the province of Quebec), the USA, Turkey and Switzerland.
Foreign employees from countries outside the EEA area, who are not covered by a national insurance agreement, can apply for exemption from the Norwegian National Insurance Scheme pursuant to the National Insurance Act section 2-13. It is a condition for exemption that the employee is insured in his or her home country and that such coverage can be documented.