Skip to content
employee vs independent contractor
Vlora Haxhimehmedi - Lawyer30. December 2021 2 min read

Employee versus independent contractor when working in Norway

If you are engaged to work in Norway, you may be faced with the query on how to organise your job situation. In this case we are looking closer at employee vs. independent contractor. What are the differences when working in Norway?

Employee or independent contractor?

We are frequently asked to advice if the individual should be an employee or work as an independent contractor. The choice may have impact on several questions related to the rights and obligations towards your principal and the authorities, in particular:

  • Does your choice have impact on the way of registering in Norway?
  • Are the reporting consequences different?
  • Will the choice have impact on your rights versus your principal?
  • Will your principal’s obligation and costs be different?
  • Is the VAT treatment different?
  • Is the income tax liability different?
  • Is the income tax reporting different?
  • Will the choice have impact on other obligations such as bookkeeping and audit obligations?
  • Are there any differences in your rights under the working environment act?
  • Will the choice have any impact on your benefits in case of dismissal or if you get sick?
  • Will the choice have impact on your pension rights?

The obvious answer to all of these questions is “YES”.

En example

in an employment situation the principal, i.e. the employer, will be obliged to pay contribution to the Norwegian social security system, whereas this is not the case if you are hired as an independent contractor. Further, in certain circumstance a foreigner working on short term engagement as an independent contractor may be exempted from paying Norwegian income tax. This will never be the case if you are working as an employee for a Norwegian employer.

Also read: PAYE tax scheme in Norway

For these reasons, the tax office will commonly evaluate the facts and the contract in order to determine which of the two categories should be applied in your particular situation. Note however, that according to general anti avoidance rules the facts prevail over the form, and thus the tax office my disregards the provision of the contract.

Whether the relationship should be characterized as an employment contract or an independent contractor, depends on several factors. The main difference is that a contractor operates at his/her own expense and risk.

In order to determine on this issue the contract is essential – provided it reflects the facts. Your contract should reply to a number of queries, such as:

  • Do you have a personal duty to perform the work or are you entitled to subcontract the work others?
  • Are you subject to the detailed instructions on how to perform the work?
  • Which of the parties provides premises and equipment to perform the work?
  • Do you have a right to provide service to other principals?
  • Etc., etc.

We advice a vast number of clients with determining their particular situation and on how to best structure their contractual relationship.

Need help sorting this out?

Our legal team are happy to help. 

Visit our website for more information about how we can assist with working in Norway.

avatar
Vlora Haxhimehmedi - Lawyer
Vlora is a Norwegian tax lawyer who has extensive experience advising Norwegian and international companies and their employees on tax obligations related to activities inside and outside Norway. She joined Magnus Legal in 2020 after several years at Ernst & Young Law Firm AS and as an in-house lawyer at Wilhelmsen Ship Management (Norway) AS. Vlora has deep expertise in both Norwegian and international tax law, as well as social security law for individuals crossing national borders. Additionally, she has extensive experience assisting foreign employers with their reporting obligations in Norway and has represented both foreign companies' branches and individuals during audits conducted by the Norwegian Tax Administration and the Norwegian Labour Inspection Authority (Arbeidstilsynet
Christina Fahle - Lawyer & Partner9. December 2021 6 min read

Employer’s National Insurance contributions in Norway

If your company employs workers in Norway, you are required to comply with Norwegian regulations. One key obligation is ...
Read more
Christina Fahle - Lawyer & Partner9. March 2023 5 min read

Taxes in Norway - employee taxation

Individuals working in Norway normally become subject to Norwegian employee tax from day one. However, working your way ...
Read more
Erik Engeland - Lawyer & Partner14. April 2022 3 min read

Be aware: Working hours in Norway are subject to inspections

Does your company employ workers in Norway? If so, it’s crucial to understand the legal requirements concerning working hours. ...
Read more