Employer’s National insurance contributions – foreign employers

Duty to pay employer’s National Insurance contributions

An employer is obliged to pay National Insurance contributions on pay and other remuneration for work and assignments performed for the employer by employees and others in a similar role. The duty to pay employer’s National Insurance contributions is linked to the duty to report pay and other remuneration for work.
A foreign employers` obligation to pay employer’s National Insurance contributions on salary and remuneration for work performed in Norway and on the Norwegian continental shelf,  applies regardless of whether the employer or the employees are tax liable to Norway.

Calculation of employer’s National Insurance contributions

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 is currently 14.1%. It is the business’s registered address in the Central Coordinating Register for Legal Entities that decides which zone it belongs to. Foreign employers who are registered with tax municipality number 2312 shall pay contributions for zone 1 at a rate of 14.1%. 

There are two exemptions from the rule that the Employers National Insurance contribution shall be calculated by the rate of the zone in which the employer is registered.

Exemption for registered sub-entities:
Exceptions will apply if the enterprise has registered sub-entities in the Central Coordinating Register for Legal Entities. In such cases, each sub-entity is deemed to be a separate calculation entity in relation to employer’s National Insurance contributions.

Exemption for mobile activities:
If the main part of the employees` work is performed in a different zone than where the employer is registered, and the Central Coordinating Register for Legal Entities does not require registration of sub-entities in the zone the work is performed, the rate for the zone in which the work is performed shall be used when calculating the Employers National Insurance contribution on the remuneration paid to the employees who work in that zone. This also applies where the employees are hired-out to work for another principal, if the hired-out employees perform the main part of the work (more than half of the working days within a bimonthly reporting period) in a different zone than where the employer is registered.

Place and time of payment

The employer shall calculate the contributions on its own initiative and pay the tax collection office in instalments, six times a year.  For each period, a statement must also be submitted showing the calculation basis. After the end of the year, the employer must submit an annual statement setting out the basis for the calculation of employer’s National Insurance contributions for the preceding calendar year.

Foreign employers who are not engaged in permanent business activity in any municipality in Norway or who are engaged in permanent business activity in several municipalities and employers who are only engaged in business activity on the Norwegian continental shelf must submit statements and make payment to:

The Tax Collector – Foreign Tax Affairs
P.O. Box 8103
NO-4068 Stavanger
Phone: +47 51 86 89 00

Foreign employers who are engaged in permanent business activity in Norway must pay employer’s National Insurance contributions to the municipal treasurer in the municipality in which the head office for the business activity in Norway is located. If the employer is engaged in business activity in a municipality in Norway without having a head office, the employer’s National Insurance contributions shall be paid to the municipality in which the permanent business activity is carried out.

Employers not engaged in any business activity in Norway must pay employer’s National Insurance contributions to the Tax Collector—Foreign Tax Affairs.

Exemption from the duty to pay employer’s National Insurance contributions

If the employees are exempted from membership of the Norwegian National Insurance scheme on the basis of a social security convention or pursuant to the EEA Agreement, cf. Regulation (EEC) No 1408/71, this means that the employer is exempt from the obligation to pay employer’s National Insurance contributions.
If an employer can document that corresponding contributions are paid to the home country on the same wage payments that are subject to contributions in Norway, the employer can apply for remission of or a reduction in the employer’s National Insurance contributions due to Norway. Applications should be sent to:

The Central Office - Foreign Tax Affairs.
P.O Box 8031
N-4068 STAVANGER
NORWAY
Telephone: +47 51 96 96 00

Membership of the Norwegian National Insurance scheme

Who is a member?

Persons who are resident in Norway are as a rule obliged to be members of the Norwegian National Insurance scheme. A person is deemed to be resident if his or her stay in Norway is intended to last for more than 12 months. It is a condition that the person in question has lawful residence in Norway.

A person who is not resident is nonetheless obliged to be a member of the National Insurance scheme if he or she is an employee in Norway or on the Norwegian sector of the continental shelf in connection with exploration for, or recovery of, oil, gas or other natural resources.

Obligation to pay National Insurance contributions

Members of the Norwegian National Insurance scheme are obliged to pay contributions to the National Insurance scheme. The contributions are calculated as a percentage of personal income, see the National Insurance Act section 23-3 and the Tax Act sections 12-2 and 12-10.

The rates for National Insurance contributions are decided by the Norwegian parliament; Stortinget,  every year. For 2010, they are:

• 7.8% of pay and other personal income mentioned in the National Insurance Act section 23-3 second paragraph sub-paragraph 2.
• 11.0 % of income from self-employment and other personal income mentioned in the National Insurance Act section 23-3 second paragraph sub-paragraph 3.

Normally, National Insurance contributions are included in tax withholdings and paid to the tax collection office together with payroll withholding tax. Employees’ National Insurance contributions are included in the deduction tables sent by the Central Office – Foreign Tax Affairs.

If a person is not liable to tax in Norway (exemption pursuant to a tax treaty), he or she must nonetheless pay National Insurance contributions. In such case, the National Insurance contributions are paid to the Norwegian Labour and Welfare Service (NAV) office in the municipality in which the employee/self-employed person is staying in Norway.

Exceptions or exemptions from the Norwegian National Insurance scheme

Pursuant to the EEA Agreement, cf. Regulation (EEC) No 1408/71, the principle is that a person should be insured in the country in which he or she works. Employees stationed abroad can, however, apply for exemption from the national insurance scheme in the country in which they work. It is a precondition that the national insurance authorities in the home country issue confirmation or a certificate as documentation that the person in question is insured in his or her home country (form E 101).

Applications with enclosed confirmation of membership of the national insurance scheme in the home country must be sent to NAV National Office for Social Insurance Abroad (NAV Utland), P.O. Box 8138 Dep, NO-0033 OSLO. Phone: +47 21 07 37 00, fax: +47 21 07 37 01.

It is also 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, the USA, Turkey, Switzerland and the province of Quebec. A foreign employee from a country without an agreement can also apply for exemption pursuant to the provisions of the National Insurance Act section 2-13 second paragraph and the pertaining Regulations No 314 of 15 April 1997. It is a condition for exemption that the employee is insured in his or her home country and that such coverage can be documented.

For further information, see:  www.nav.no, www.skatteetaten.no and www.taxnorway.no .

Postal address:
P.O. Box  8031, NO-4068 Stavanger

Office address:
Lagårdsveien 46, NO-4010 Stavanger

Phone: 47 51 96 96 00
Fax: + 47 51 96 96 96

E-mail: sfu@skatteetaten.no
Website: www.skatteetaten.no