Employment or assignment?
An important distinction is made between salary which is paid for individual assignments and salary payments for work performed under an employment relationship. If the work is regular and permanent in nature, e.g. cleaning a house on set days, the work will be deemed to constitute employment. Occasional and isolated assignments does not constitute employment. The obligation to pay holiday pay and sickness benefit coincides with the boundary between employment and assignment, but is of no significance as regards tax and employer's national insurance contributions. For more information about the boundary between employee and non-employed worker (freelancer), see the brochure entitled "Employee or self-employed?".
Holiday pay is not accrued on salaries for individual assignments. If the work is carried out in a contractual employment relationship, then employees are entitled to holiday pay. Holiday pay normally amounts to 10.2 per cent of the salary earned in the year of accrual. The year of accrual is the year before the holiday year. The holiday pay must be paid to the employee on the last pay day before the holiday. Tax is not to be deducted from holiday pay payments made in the holiday year. If the employment contract is ended in the year of accrual, then holiday pay is to be paid immediately. Tax must then be deducted in accordance with the tax deduction card. In both cases, you must declare the holiday pay and submit the simplified submission. The Norwegian Labour Inspection Authority can provide more information on holiday and holiday pay regulations. The tax collector can provide more information on the deduction rules.
Salary that is paid for individual assignments does not trigger an obligation to pay sickness benefit. When the work is carried out as employment, you must pay sickness benefit to the employee for the first 16 calendar days of a period of absence due to illness. However, this does not apply if the employee did not have work before the employment relationship began and fell ill before four weeks had passed in the new job. NAV will be able to provide more information on the sickness benefit rules. From the 17th day, the employee will receive sickness benefit from NAV.
Free board and lodging
If the worker receives free board and lodging in addition to their salary, the value of this must be included in the salary in the simplified notification when you calculate the tax deduction. The Director of Taxes determines the applicable rates in December each year.