Summary

Norway has a comprehensive social security scheme with three branches. The main branch, the National Insurance Scheme, provides a full range of age related, sickness unemployment and maternity benefits, and two smaller schemes provide child benefits and family support. Employer costs are generally high, and consequently most inbound employees can, if possible, remain socially insured in their home country via an A1 or certificate of coverage.

Details

Contributions

Employer contributions are generally 14.1%, and employee contributions are 7.6%. Employer contribution rates can vary according to where in Norway the business is situated (higher rates apply in more urban areas). In addition, employers are required to pay a contribution of at least 2% of total income to a mandatory occupational pension scheme.

Treaties

As a member of EFTA, Norway has implemented the EU’s social security regulations and in addition has social security agreements with 12 non-EEA countries, including the US, Canada, Australia and India. These agreements determine which country must levy social security contributions, provide benefits, and they prevent social security being levied twice on the same income. Most inbound expatriates to Norway therefore continue to pay home country social security rather than Norwegian contributions. Most agreements allow for five years of continued home country coverage, although in the case of the UK the limit is two years. Special rules apply to individuals working in Norway and other EEA countries (plus the UK) on a regular basis.

There is also a separate Nordic convention on Social Security established between Denmark, Finland, Iceland, Norway and Sweden.

The Norwegian social security authority can be strict – for inbounds there is a requirement to submit A1s and certificates of coverage to prove exemption from social security, and claims for exemption from Norwegian charges may be denied if the correct documents are not submitted within 4 months of arrival.

Exemptions

A standard income deduction for residents of Norway has the effect of reducing the social security income base by just $10,250 per year.

Administration

Social Security contributions are calculated and deducted through payroll on a monthly basis, but only paid over to the Norwegian authorities on a bi-monthly basis.

.

Benefits

Pension benefits can generally be drawn at 67, with the possibility of an early claim if sufficient years (40) of contributions have been made. Most benefits – either from paying contributions locally or deriving from being insured in a social security agreement country – are generous; unemployment benefit in Norway can be as high as 62% of an individual’s average annual salary over the previous three years.

Other

 Employee social security contributions are not tax deductible.

Need more specific advice?Ask an expert