How can an Umbrella Company Help with Contracting in Norway?
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies who specialise in helping workers make the most out of their contracts.
They’re called Umbrella Companies (or, contractor management companies).
Basically, an Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.
Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts in Norway. Even better, most are experts in Norwegian and expat tax law, meaning they’ll also help you optimise your earnings in Norway.
Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.
Can I Organise My Taxes and Work Permit Myself?
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for Norway.
If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.
Also, are you familiar with the intricacies of the tax system in Norway, as well as your own country’s laws on overseas earnings? If so, good on you!
However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in Norway and your home country can seem like full-time work in itself.
A Contractor’s Guide to Taxes in Norway
One of the most consistently challenging aspects of contracting in Norway is complying with the country’s tax system. As well as paying tax in Norway, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
How do I calculate my taxable income in Norway
If you’re working in Norway under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Norway for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Norway, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in Norway through PAYE is left with the prospect doing everything themselves.
Do you know much about Norwegian Tax Law? Does Norway have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Norway can range from 1.4 to 15.4 percent on personal income, and a 23% general tax on gross income, and you need to be sure you are placed in the correct tax brackets.
Tax Filing as a Contractor in Norway
|When Do You Need to Lodge Your Tax Return?||30th April|
|Tax Filing Deadline||30th April|
|Can you file it online?||Yes|
How to File Taxes in Norway as a Contractor
Step 1: Receive a Tax Return Form
In March/April, you will receive a tax return from the Norwegian Tax Authority if you work in Norway or on the Norwegian continental shelf. This gives an overview of your income, deductions, assets and debts for the last income year.
If you have not received a tax return before the end of April, complete and submit the form RF1281 – Tax return for individuals who have not received a pre-completed tax return(link is external).
Step 2: Verify the Pre-Filled Information
Check that the information is correct and complete. If so, you do not need to submit a tax return. If you need to make any changes, the deadline for making them and submitting the tax return is 30 April.
Check the information against monthly and annual documentation of your salary payments and tax deductions provided by your employer;
Check whether you are entitled to a deduction for various expenses from your taxable income;
Check that your personal details such as your address are correct;
Fill in your bank account details for any tax refunds; and
Complete Item 1.5.5 if you are a foreign employee and have worked for a foreign company in Norway, or have worked for a Norwegian or foreign company on the Norwegian continental shelf.
Step 3: Submit Your Tax Return
You can submit your tax return by post or online here(link is external).
Tax Figures in Norway
|Currency||Norwegian Kroner (NOK)|
|Tax-free Threshold in Norway||None|
Norway has a dual tax base system: general income and personal income.
Personal Tax-Free Amount: Resident taxpayers are entitled to a personal tax-free amount. This amount varies depending on an individual’s tax class e.g. Class 1 applies to unmarried residents.
Minimum Deduction: Taxpayers may claim a minimum deduction, which covers expenses associated with employment. Alternatively, a taxpayer may claim a deduction for actual expenses if these are higher. The deduction is 45% of the basis, the maximum being NOK100,800 and the minimum NOK4,000.
Tax Residency in Norway
When do you become a tax resident in Norway
You become a tax resident in Norway when:
You become a tax resident in Norway when:
You stay in Norway for more than 183 days in one or more periods during any 12-month period; or
You stay in Norway for more than 270 days in one or more periods during any 36-month.
Residency takes place from the income year for which a requirement is fulfilment.
Does the 183 day rule apply in Norway
Am I taxed on my global income in Norway
Residents are taxed on their worldwide income. Non-residents are taxed on their Norway-sourced income only.
Can you set up your own Limited Company in Norway?
|How long does it take to set up||4 days|
|How much does it cost||NOK5,570 (electronically) – NOK6,797 (on paper)|
|Is it easy?||Starting a Business Rank: 19/190 (Source: World Bank)|
Tax Calculator in Norway
If you are a contractor and want a calculation on your tax and net retention in Norway, we can supply it to you free of charge.
Using an Umbrella Company for Income Tax in Norway
Contractors in Norway are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Norwegian umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).
The companies are experts in Norwegian taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Norwegian tax office or tax department directly including processing your tax refund if you are eligible.
How We Can Help You with Tax in Norway
We work with numerous umbrella companies in Norway, many of whom are experts in tax and immigration laws. If you have any questions about tax in Norway, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Norwegian work permit.
Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Norway but without the overhead of directly dealing with the Norwegian tax authorities. Get in touch with us today for some reliable advice on tax in Norway!
A Contractor’s Guide to Work Permits in Norway
Immigration is one of the primary concerns for any contractor hoping to start working in Norway. Permanent employees will find it easy to get their Norwegian work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer.
The Norwegian work permit, known more commonly as the Norwegian Work Visa, is dependent on this sponsorship because it confirms that you’ll be earning money during your stay in the country. Contracting in Norway is more difficult because the work permit is tied to one employer, so you have to change it to suit each new contract. Thankfully, umbrella companies provide a convenient and effective solution to this issue.
How Does an Umbrella Company Work?
Most people want to do their work, earn their money and enjoy their spare time without taking on loads of admin in a new country. That is why an umbrella company can help.
When you’re working through an Umbrella Company, you’ll essentially be outsourcing the admin and tax issues to specialists.
While the umbrella company will charge a fee, you’ll likely end up saving more money in the long run: you’ll be able to focus on your work, expertly reduce your tax liability, and comply with all laws and regulations in Norway (which means avoiding fees, fines, or even worse penalties).
How Can We Help You?
There’s a huge variety of Umbrella Companies with different specialities and advantages in Norway. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout Norway and match contractors with the right company for them. If you’ve already secured a contract in Norway, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).