Mandatory Benefits in Norway
Medical coverage
The health care system is largely financed by the government national health insurance and overall is considered to be one of the best in the world. Hospitals are mainly public, and health treatment is provided mainly free of charge for the patient.
Some employers have in place private health insurance schemes, but this is not mandatory and not standard.
Pension
Apart from the government old age insurance paid by both employers and employees during payroll, companies must also provide employees with a supplementary pension. All employers in Norway must save for pensions for their employees. In the private sector, the employer is normally subject to a defined contribution pension agreement entered into with a pension company. The mandatory minimum contribution to be paid by the employer is 2 percent of salary up to 12 G (as of July 2022, that is of all the salary amounts up to NOK 1,337,724). The maximum contribution that the employer may pay is 7 percent of all the salary amounts up to 7.1 G and 25.1 percent of all the salary amounts between 7.1 G and 12 G. As of July 2022, 1 G amounts to NOK 111,477.
Work injury insurance
Employers need to make contributions on the basis of the total assessed cost of employee insurance, which is based on the evaluated degree of risk.
Medical examination
The employer can demand medical examinations in only the following situations:
- when it’s required by law or another regulation
- when a position involves particular risk
- when the employer deems it necessary to protect life or health
Non-Mandatory Benefits in Norway
Working from home (WFH)
More and more employers offer working-from-home flexibility. Some implement a hybrid model involving a couple of days in the office with those sometimes being a requirement and sometimes being optional. There are cases where working fully remote would be an option but the company requires the employees to spend some time during the first few months of their employment. However, still the most predominant case is for employees is to work in the employer’s office.
If WFH is implemented, it must be defined in a written agreement describing the following:
- the extent of WFH
- the WFH working hours
- (if any) provisions on when the employee must be available
- (if the WFH situation is only temporary) the date WFH expires
- (if applicable) the parties’ rights to alter/terminate WFH
- (if applicable) whether WFH is subject to a trial period (so that if the WFH arrangement doesn’t work well, the employer can demand that the employee work in the office instead)
- ownership and maintenance of any equipment
- (if applicable) regulation on how the employee must handle documents, when working from home
The same regulations on working hours apply regardless of whether the work is performed from home or in the office. And the employer must keep records of the working hours. However, there is no regulation on how the working hours are registered. Hence, if the employer has no automatic system in place registering the working hours, the working hours may be registered by the employee and submitted to the employer.
There is no obligation to pay the employee any fee for WFH. However, if the employee has a separate room used as a home office only, then the employer may pay NOK 1,850 per month as a standard compensation that is not taxable for the employee.
Life insurance
Life and health insurance covers employees against risks caused by accidents that result in total or partial incapacity or death (private accident and invalidity insurance). Many employers have such insurance in place, but having it isn’t mandatory.
Supplementary health insurance
Some companies offer employees private health insurance. Additional perks, such as dental and vision coverage, are less common.
Stock options
Many tech startups (and other employers) offer incentives in the form of stock options to employees. Taxation of such benefits normally takes place at the time of exercising the option (the employee’s becoming the owner of the shares), and the salary tax rate applies. However, the government has recently implemented a more fortunate tax regulation on share option schemes in small startups, implying that taxation of the employee’s benefits takes place only once the employee sells the shares (and not when the option is exercised and the employee becomes the owner of the shares). In addition, the benefits are taxed as capital income, not as salary; hence, the tax rate is (usually) much lower.
Free meals
Providing subsidized or free lunch to employees is a very common benefit in the tech industry. The employee must pay tax for such benefit, based on standardized tax rates.
Lunch vouchers for usage in restaurants aren’t common.
Paid relocation
Some tech companies pay for employees’ relocation costs when they take a job offer, although this isn’t standard.
Flexible working hours
More and more tech companies implement flexible working hours for better work-life balance of employees.
Gym membership
Some tech companies subsidize or reimburse employees for their gym memberships.
Public transportation reimbursement
Some companies reimburse employees’ public transportation costs to commute to work daily.
Cash bonus
Although not mandatory, some employment agreements may include “bonus plans”, such as year-end or performance-based bonuses.
Additional days off
Norway has a generous statutory holiday and mandatory vacation allowance, but some companies still go above and beyond by offering up to five days off more.
Additional payment during parental leave
By law, parents are entitled to a year off (combined) with pay from the National Insurance (NAV). However, NAV compensates only an amount equal to the employee’s annual salary up to 6 G (as of July 2022, NOK 668,862). Many employers pay to the employee the difference between the payment from NAV and the employee’s ordinary salary (if it exceeds 6 G per year). Normally, the employer pays directly to the employee during parental leave and is reimbursed by NAV (however, NAV reimburses only an amount based on annual salary of up to 6 G).
