A freelancer receives payment for individual assignments without being a permanent or temporary employee of the organisation he or she is carrying out work for, but does not need to be self-employed.
Freelancers (also known as "contractors") are half-way between an employee and a self-employed person, and have similarities with both.
A freelancer can be regarded as a salary recipient or self-employed by the tax authorities.
Freelancers carry out assignments outside of an employment relationship, i.e. you are your own boss. You carry out the work at your own expense and risk, and are not subject to an employer's instruction authority or ongoing checks on your work.
If you receive a salary as a freelancer then you have different rights and obligations than if you are self-employed. As a salary recipient, you do not need to have an organisation number. You also have no responsibility to keep accounts, and you will not be liable to VAT. As a salary recipient, you will receive a salary from your client, submit the tax return for employees and be entitled to the minimum standard deduction as a salary recipient.
Who can be considered a freelancer
When assessing whether a person is working outside of a employment relationship as opposed to in an employment relationship (employee), emphasis is placed on whether:
- the person has agreed to carry out a particular assignment
- the person is not subject to the instruction authority of another party
- the work or assignment is carried out at the person's own expense and risk
- the person is free to delegate all or part of the work on the assignment to others
- the person uses their own tools and materials
- the person carries out assignments for other people
- the remuneration is intended to cover both profits and expenses
These factors are not exhaustive and must be considered in context.
The tax authorities do not use the term "freelancer", and instead use salary recipient or self-employed. However, the term freelancer is used by NAV when concerning social rights pursuant to the National Insurance Act for those who receive a salary.
Freelancers and tax
Freelancers who are self-employed carry out sole proprietorships. They send invoices themselves and are responsible for paying tax and any value added tax.
For freelancers who receive a salary, the client uses the tax deduction card and deducts tax when paying the salary.
Social security rights
As a freelancer, you have fewer social rights than employees. The client 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.
Below is an overview of the rules that apply for social rights for freelancers (contractors), as well as for employees 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|
|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|