Hiring in Norway: The Complete Guide for US Companies

Norway stands out in the global talent market for its progressive work culture, high standards of employee rights, and a robust legal framework. 

The country’s workforce is highly educated, proficient in English, and known for professionalism and efficiency. Norway’s strong focus on innovation, especially in technology, energy, and sustainability, makes it a prime destination for international companies seeking top-tier talent.

For US-based companies, hiring in Norway offers several strategic advantages:

• Access to a large pool of skilled professionals, especially in technology, engineering, and marketing.
• A stable and transparent business environment with clear legal protections.
• Seamless communication due to high English proficiency.
• A culture that values diversity, inclusion, and work-life balance, leading to high employee satisfaction and retention.

Learn more about the benefits of using an Employer of Record (EOR) for global expansion.

How to Hire Employees in Norway

Assess Your Hiring Needs

Before you start hiring in Norway, clarify your business objectives and workforce requirements:

• Full-time vs. project-based support: Determine if you need permanent employees for ongoing operations or contractors for short-term projects.
• Local compliance requirements: Norwegian law mandates written employment contracts, strict working hour limits, and statutory benefits. Ensure your hiring model aligns with these regulations.
• Onboarding speed vs. long-term control: Consider whether you need to hire quickly (favoring EOR solutions) or want full control over local operations (requiring a legal entity).

Hiring Options in Norway

You have two main options for hiring in Norway:

• Set Up a Legal Entity: Establish a Norwegian subsidiary or branch. This gives you full control but involves significant time, cost, and ongoing compliance obligations.
• Partner with an Employer of Record (EOR): An EOR acts as the legal employer on your behalf, handling payroll, compliance, and HR, while you manage day-to-day work.

For a deeper dive into EOR vs. entity setup, read our complete guide to Employer of Record services.

EOR vs. Legal Entity: Side-by-Side Comparison

Feature	Employer of Record (EOR)	Setting Up a Legal Entity
Setup Time	Days to weeks	Several months
Upfront Cost	Low (service fees only)	High (legal, admin, registration)
Compliance	Managed by EOR	Your responsibility
Payroll & Tax Filing	EOR handles all filings	You must run payroll and file taxes
Local HR Support	Included in service	Must build in-house or outsource
Onboarding Speed	Fast	Slow
Long-term Control	Limited (EOR is legal employer)	Full control over staff and operations
Exit Complexity	Simple (end EOR contract)	Complex (liquidation, legal closure)

EOR vs. Legal Entity for Hiring in Norway

Understanding Worker Classification

Employees vs. Contractors in Norway

Correctly classifying your hires is essential for compliance. Here’s how Norway distinguishes between employees and contractors:

Aspect	Employee	Contractor
Legal Status	Hired under an employment contract	Hired under a service agreement
Control	Employer directs work, sets hours/tasks	Contractor decides how/when to work
Benefits	Entitled to statutory benefits (leave, etc.)	Not entitled to employee benefits
Tax/Payroll	Employer withholds taxes, pays social security	Contractor responsible for own taxes
Termination	Protected by notice and dismissal rules	Termination per contract terms

Legal Implications and Risks of Misclassification

Norwegian law strictly regulates employment status. Misclassifying an employee as a contractor can result in:

• Back payment of social security contributions and taxes.
• Fines and penalties, with recent increases in enforcement powers and fine caps.
• Liability for unpaid statutory benefits (leave, notice, severance).
• Legal disputes and reputational risk.

Always review roles carefully and seek local legal advice or use an EOR to ensure correct classification. 

For more information on global worker classification, read our guide on freelancers, independent contractors, and consultants.

Hiring Costs and Payroll

Hiring Costs Overview

Hiring in Norway involves several cost components:

• Gross salary: No national minimum wage, but sector-specific minimums apply (e.g., construction, hospitality).
• Employer social security contributions: Mandatory and substantial, covering pensions, sick leave, and more.
• Statutory benefits: Paid leave, parental leave, and public holidays.
• Recruitment and onboarding costs: Advertising, background checks, and onboarding administration.

Payroll Setup Steps

To run payroll in Norway, you must:

1. Register as an employer (or work through an EOR).
2. Collect employee tax information and bank details.
3. Calculate gross-to-net pay, including all mandatory deductions.
4. File monthly “a-melding” reports to Norwegian authorities.
5. Remit taxes, social security, and other contributions on time.

Income Tax Rates

Norwegian income tax is progressive, with rates increasing with income. Employers must withhold taxes at source and remit to the authorities. Employees also pay social security contributions.

Payment Methods

• Direct deposit: Most common, paid into the employee’s Norwegian bank account.
• Wire transfers: Used for international or contractor payments.
• EOR payroll: If using an EOR, all payments and filings are handled for you.

Check out the tips for paying international employees.

Using Global Payroll Services

A global payroll provider or EOR can:

• Ensure compliance with Norwegian payroll laws.
• Handle all filings, payments, and reporting.
• Simplify multi-country payroll management.

Discover how Tarmack streamlines global payroll and compliance.

How to Properly Hire and Pay Contractors

• Draft a clear service agreement specifying deliverables, payment terms, and IP ownership.
• Do not exert employer-like control over work hours or methods.
• Pay via invoice, not payroll.
• Ensure contractors handle their own tax and social security filings.

For more details, read our guide on paying international contractors.

Compliance Risks

Incorrect Payroll Contributions

Failure to withhold the correct taxes or pay social security can result in:

• Back payments and interest.
• Substantial fines (recently increased to up to 4% of annual revenue).
• Audits and reputational damage.

Permanent Establishment Risk

Hiring directly or mismanaging contractors can trigger “permanent establishment,” exposing your company to Norwegian corporate taxes and compliance obligations. Using an EOR helps avoid this risk.

Learn more about compliance challenges and how EORs help.

Statutory Benefits

Norway mandates:

• 25 days of annual leave.
• Paid sick leave.
• Parental leave (12 months, with additional flexibility).
• Public holidays.

Employers must comply, regardless of contract type.

Misclassification Risks

Misclassifying employees as contractors can result in:

• Back payment of benefits and taxes.
• Legal claims and fines.
• Loss of business reputation.

Provincial/Regional Law Variances

Norwegian labor law is national, but collective bargaining agreements (CBAs) may add sector-specific requirements. Always check for applicable CBAs in your industry.

Overview of Intellectual Property Rights for Employers

• Employers can claim rights to inventions made by employees in connection with their work.
• Employees must notify employers of inventions; employers have four months to claim ownership.
• Copyright for software typically belongs to the employer unless otherwise agreed.

For more information on managing IP in global teams, read our guide to IP management through EOR.

Onboarding Process

Before Their First Day

• Draft and issue a written employment contract (required by law).
• Collect personal data, tax details, and bank information.
• Register the employee with Norwegian authorities.
• Provide information about workplace policies and benefits.

On Day 1

• Welcome the employee and introduce them to the team.
• Review the employment contract and job expectations.
• Provide access to necessary systems, equipment, and tools.
• Outline health, safety, and remote work policies.

During Their First 90 Days

• Monitor performance and provide feedback.
• Conduct regular check-ins, especially during the probation period (up to 6 months).
• Address any training needs or compliance questions.
• Confirm understanding of company policies and Norwegian labor law rights.

Offer Letter Essentials

• Clear job title and description.
• Salary, benefits, and working hours.
• Start date and probation period.
• Notice period and termination terms.
• Reference to any applicable collective agreements.

Take a look at  our onboarding checklist for international employees.

NDAs and Confidentiality

• Include confidentiality clauses in employment contracts.
• Use separate NDAs for sensitive roles or projects.
• Clearly define ownership of inventions and IP.

Running Background Checks

• Obtain consent before conducting background checks.
• Comply with GDPR and Norwegian data privacy laws.
• Limit checks to relevant job requirements.

Remote Employee Management

Managing remote employees in Norway requires clear processes and robust security:

• Computer and app access: Provide secure, company-managed devices and access to necessary software.
• IP protection: Use employment contracts and NDAs to clarify IP ownership. Regularly review access rights.
• Types of IP rights: Understand the difference between inventions (patents), copyright (software, documents), and trade secrets. Ensure all are addressed in contracts.
• Best practices: Schedule regular check-ins, set clear goals, and foster a positive remote culture.

Explore more on managing remote and global teams.

Labor Law Compliance

Key Working Condition Requirements

• Working hours: Standard is 9 hours/day, 40 hours/week. Overtime is limited and must be compensated.
• Rest and breaks: At least 11 hours of rest per 24-hour period and 36 hours per week.
• Leave: 25 days annual leave, generous sick and parental leave.
• Probation: Up to 6 months, with shorter notice for termination.

Working Conditions by Employment Type

• Permanent contracts: Most common, with strong job security.
• Temporary contracts: Allowed only in specific cases and limited to 12 months.
• Part-time: Employees have priority for new hours and roles.

No At-Will Employment

Norway does not allow at-will termination. All dismissals require just cause and written notice.

Trade Unions and Collective Bargaining

• 60-70% of workers are covered by CBAs.
• CBAs may set additional requirements for pay, leave, and termination.
• Employers should check for relevant agreements in their sector.

Learn more about labor compliance in complex markets.

Termination Guidelines

Acceptable Termination Reasons

Norwegian law requires “just cause” for dismissal, such as:

• Company restructuring or downsizing.
• Serious breach of contract by the employee.
• Inability to perform essential job duties.

Dismissal must be documented and communicated in writing. Special protections apply for illness, pregnancy, and parental leave.

Notice Periods and Legal Protections

• Less than 5 years’ service: 1 month notice.
• 5-10 years: 2 months.
• 10+ years: 3-6 months, depending on age.
• Employees can challenge dismissals they believe are unfair.
• Severance pay is not mandatory but may be negotiated.

Check out the  guide to severance regulations across countries.

Benefits of Hiring in Norway

Foreign companies hiring in Norway enjoy several key advantages:

• Highly skilled talent pool: Strong education system, technical expertise, and English proficiency.
• Cost efficiency: No need for a local entity when using an EOR, reducing overhead.
• Time zone benefits: Overlaps with both US and European business hours.
• Robust infrastructure: Advanced digital, transport, and business services.
• Employee retention: Strong work-life balance and employee protections foster loyalty.
• Innovation focus: Norway excels in tech, energy, and sustainability.

Unlock Growth with Norway’s Skilled Professionals

Hiring in Norway offers US companies access to a highly skilled, professional, and innovative workforce. The country’s clear legal framework, strong employee protections, and advanced infrastructure make it an attractive destination for international expansion. 

By understanding local compliance requirements, leveraging EOR solutions, and following best practices for onboarding and remote management, you can build a successful Norwegian team and unlock new growth opportunities.

Ready to hire in Norway? Book a demo with Tarmack to see how we simplify global hiring, payroll, and compliance.