What is included in the basis for calculation of employer's national insurance contributions?

You must pay employer's national insurance contributions on salaries, pensions, benefits and other remuneration for work and assignments inside and outside contractual employment relationships which you are required to report.

Basis for calculating the contributions

Salary and other remuneration

In addition to ordinary salary, including holiday pay, you have to pay employer’s national insurance contributions on:

  • Fees
  • Bonus
  • Commission
  • Redundancy pay in connection with workforce reductions etc.
  • Unemployment benefits prepaid by the employer
  • Sickness benefit
  • Parental benefits

You also have to pay employer’s national insurance contributions on the following benefits, that are not connected to the reporting duty: 

  • Payments to occupational pension schemes
  • Pension from former employers
  • Expense allowances subject to withholding tax
  • Reimbursements subject to withholding tax
  • Payments in kind subject to withholding tax
  • Tips/gratuities subject to withholding tax

Pensions 

The basis for calculation of employer's national insurance contributions includes the employer’s and the government’s contributions to annuity and pension schemes.

This concerns contributions to collective occupational pensions schemes in insurance companies, contributions to pensions schemes that are arranged technically in the same way as insurance, contributions to public service pension schemes, such asthe Norwegian Public Service Pension Fund (Statens Pensjonskasse), and contributions an employer pays to an annuity scheme where the employees are beneficiaries.

You're required to pay employer’s national insurance contributions on payment of pensions that commenced in 1988 or later and where the pension payment is made by or through you as an employer and is charged as an expense in the operational accounts. Taxable pay after termination of employment does not count as a pension in this regard.

Payments in kind

Payment in kind means any financial benefit earned other than in cash, cheques or any other similar means of payment, see the Norwegian Tax Act section 5-12, subsection 1. You should pay employer’s national insurance contributions on payments in kind, when the benefits in kind are subject to withholding tax. The duty to pay employer’s national insurance contributions, therefore depends on the duty to make withholding tax deductions.

Expense allowances

Expense allowances means benefits that are supposed to cover expenses incurred during performance of work duties, assignments or tasks as mentioned in section 5-10, letters a and b, in the Norwegian Tax Act, see also section 23-2, subsection 3, of the National Insurance Act. You should pay employer’s national insurance contributions on expense allowances, when the expense allowances are subject to withholding tax. The duty to pay employer’s national insurance contributions, therefore depends on the duty to make withholding tax deductions.

Allowances covering other expenses than those incurred during performance of work duties, assignments or tasks, should always be included in the basis for calculation of withholding tax and employer’s national insurance contributions. Examples of such other allowances are those meant to cover daily commute between home and work place, group life insurance premiums paid, employees’ share of pension premium and other private expenses.

Tips/gratuities

You should pay employer’s national insurance contributions on tips/gratuities, when the tips/gratuities are subject to withholding tax. Currently this is relevant for tips to waiting staff paid on a percentage of turnover basis.

Director's fees and similar remuneration

You should always pay employer’s national insurance contributions on remuneration as a board member, member of a committee of representatives, other committee, council, etc.

The remuneration must be reported even if holding office is part of the recipient’s enterprise.

Exceptions

From this principle, however, there are several clarifications and exceptions.

Among other things, you should not make deductions in the basis for employer’s national insurance contributions for deductions in the basis for withholding tax. You have to pay employer’s national insurance contributions even if the amount is too low to require reporting, and you're liable to pay employer’s national insurance contributions without regard to the age of the recipient.

For further clarifications, exceptions from and limitations of the liability to pay employer’s national insurance contributions, see the guide Skatte-ABC in the chapter "Arbeidsgiveravgift – avgiftsplikt og grunnlag" (in Norwegian only).