Freelancers
Many people place a different meaning to the term "freelancer" than what the authorities does. It is important to clarify if you are considered to be a freelancer or a sole proprietor, as this distinction determines your rights and obligations.
When am I a freelancer?
As a freelancer you pay tax in a similar manner to employees. You submit Tax Return for employees and are entitled to minimum standard deduction from salary income.
You are not required to keep accounts and should not register in the VAT-register.
You are a freelancer when you receive salary for individual assignments without being neither a permanent or temporary employee of the organisation you are carrying out work for, nor a self-employed person. A freelancer is somewhere in between an employee and self-employed.
Freelancer vs sole proprietor
These are the most important similarities and differences between being a freelancer and a sole proprietor.
| Freelancer | Sole proprietor | |
|---|---|---|
| Organisation number required | No | Yes (with a few exceptions) |
| Responsible for the result | Yes | Yes |
| How are your paid | Receives salary (but are not employed) | Issue an invoice |
| Payment of tax | The contractor retrieves your tax deduction card and deducts taxes | Responsible for reporting and paying taxes |
| Accounting | Not required to keep accounts | Must keep accounts |
| Possibility to use the exemption card | Yes | No |
| Type of agreement with the contracting party | Agreement to carry out an assignment | Agreement to carry out an assignment |
| Value added tax (VAT) | Receives salary, and should not calculate VAT | Can be liable to VAT |
The Norwegian Tax Administration – Employee or self-employed?
Social security rights for freelancers
As a freelancer, you have fewer social rights than employees but more social rights than self-employed persons. The client, or the contracting party, will not be liable to pay you sick-pay, but you will be entitled to sick-pay from the Norwegian Labour and Welfare Administration (NAV) from the 17th sick day, and you can take out voluntary supplementary insurance. You will not be entitled to holiday pay (unless you have reached an agreement about this) or have any rights as an employee under the Working Environment Act. Freelancers are not entitled to occupational injury benefit or occupational injury insurance, but they can take out voluntary occupational injury insurance with a private insurance company and a voluntary occupational injury benefit policy with NAV.
Freelancers are not entitled to a pension scheme from their client, but they can set up their own pension scheme. Subject to certain conditions, freelancers are entitled to unemployment benefit.
Rules and rights for freelancers
Below is an overview of the rules that apply for social rights for employees, freelancers, and the self-employed.
| Regulations/social rights | Employees | Freelancer | Self-employed (sole proprietorship) |
|---|---|---|---|
| Sick-pay (National Insurance Act) | 100 % coverage up to 6 G (employer covers the first 16 days) | No coverage for the first 16 days. 100 % coverage from day 17. Can take out voluntary sick-pay insurance through NAV | No coverage for the first 16 days. 80 % coverage from day 17. Can take out voluntary sick-pay insurance through NAV |
| Working Environment Act. Labour Disputes Act. The Holidays Act. Wage Guarantee Act. Act Relating to Wages during Lay-off. Act Relating to Occupational Injury Insurance. Act on obligatory occupational pension. | Covered | Generally not covered | Generally not covered |
| The Act relating to obligatory pension scheme (OTP) | Covered | Generally not covered, but can set up their own pension scheme | Generally not covered, but can set up their own pension scheme |
| The Occupational Injury Act | Covered | Generally not covered, but can take out voluntary occupational injury insurance with a private insurance company | Generally not covered, but can take out voluntary occupational injury insurance with a private insurance company |
| Special benefits following occupational injury (National Insurance Act) | Entitled to special benefits | Not entitled to special benefits unless covered by "voluntary insurance with entitlement to special benefits in the event of occupational injury" from NAV | Not entitled to special benefits unless covered by "voluntary insurance with entitlement to special benefits in the event of occupational injury" from NAV |
| Unemployment benefits | Entitled to benefits | Entitled to benefits | Generally not entitled to benefits |
