What parental benefits are you entitled to as a freelancer in Norway?
For newcomers to Norway, navigating the world of parental benefits can be complex, especially if you're a freelancer.
Navigating a foreign country's administrative and social support systems can often feel overwhelming, particularly if you don't fit the standard of a typical employee with a permanent contract.
This complexity is more pronounced for freelancers, who must contend with specific challenges - such as changing income levels and varying definitions of their work status.
READ MORE: What parents in Norway need to know before going on parental leave
The fact that Norway is a country renowned for its generous social benefits and high standard of living doesn't make this situation different from other countries.
Understanding - and accessing - parental benefits as a freelancer can be confusing, especially when it comes to parental allowance.
Defining freelancers in Norway
While many freelancers in Norway operate as sole proprietors (ENK), the Norwegian Labour and Welfare Administration (NAV) has a special definition in place for freelancers.
Under Norwegian regulations, freelancers are considered independent contractors who receive a salary fee (also called salaried freelancers).
In contrast, those running an ENK are classified as self-employed.
This distinction can be confusing because most freelancers in Norway are, in fact, self-employed and call themselves freelancers.
That's why, when consulting NAV's information on parental allowance or using their online site, those with an ENK should view and declare themselves as "self-employed" rather than "freelancers."
So, if you contact NAV to inquire about your rights, explain your business arrangement in detail.
Psst! If you are considering setting up as a freelancer in Norway, make sure to read The Local's in-depth guide on the options at your disposal.
Understanding your social rights as a freelancer
As a freelancer in Norway, your social rights differ from those of traditional employees.
Unlike employees, freelancers are not entitled to sick pay from their clients. However, they are eligible for sick pay from the NAV starting from the 17th day of illness.
READ MORE: What are the rules for foreigners accessing welfare in Norway
To enhance their coverage, they can also opt for voluntary supplementary insurance.
Furthermore, freelancers do not benefit from a pension scheme provided by clients, so they need to look into a personal pension plan to ensure financial security in retirement.
Under certain conditions, freelancers may be eligible for unemployment benefits.
If you need clarification on whether you qualify, contact the NAV and share the specifics of your case with them.
Parental benefits for freelancers
Parents in Norway, including freelancers, are entitled to 12 months' leave in connection with a birth of their child.
This leave period includes the mother's right to up to 12 weeks' leave during pregnancy and six weeks' leave that can only be taken by the mother after the birth.
Furthermore, all welfare benefits for freelancers and the self-employed in the country are based on the profit of their businesses.
This profit is the amount remaining after deducting business expenses.
For instance, if you invoice 600,000 kroner annually and have 150,000 kroner in expenses (such as office space, travel, and equipment), NAV will use your profit of 450,000 kroner to calculate your benefits, including parental allowance.
The maximum benefit amount is capped at six times the National Insurance basic amount (1G), which, as of May 1st, 2023, is 118,620 kroner.
This cap applies to freelancers, wage earners, and others eligible for benefits.
Calculating parental allowance
For self-employed individuals, parental allowance is typically calculated based on the average income over the last three years, with the NAV obtaining this data from the Tax Agency.
Note: If your profits have fluctuated significantly over the period or if you have been in business for less than three years, you will need to provide the NAV with a detailed description of how your business operates and makes money.
Based on that information, they will conduct an individual assessment and make a discretionary decision regarding the amount you will be paid for parental allowance.
On the other hand, the rules for salaried freelancers and those with a limited company (AS) mirror those for regular employees.
Parental allowance is generally based on the average income from the three months preceding the start of the parental benefit period.
If there is a significant difference (over 25 percent) between your annual income and your recent three-month income, NAV will determine which figure is more representative.
Parental allowance can be taken consecutively or in combination with work or holidays.
For more detailed information, you can check out NAV's guidelines on parental allowance.
Alternatives for those not entitled to parental allowance
Even if one or both parents are not entitled to parental allowance, they still have the right to parental leave.
In such cases, the mother can apply for a one-off benefit, and in certain circumstances, the father can too.
Additionally, as employee interest organisations often point out, the parent who has not accrued the right to parental allowance can begin to accrue this right while the other parent is on leave.
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Navigating a foreign country's administrative and social support systems can often feel overwhelming, particularly if you don't fit the standard of a typical employee with a permanent contract.
This complexity is more pronounced for freelancers, who must contend with specific challenges - such as changing income levels and varying definitions of their work status.
READ MORE: What parents in Norway need to know before going on parental leave
The fact that Norway is a country renowned for its generous social benefits and high standard of living doesn't make this situation different from other countries.
Understanding - and accessing - parental benefits as a freelancer can be confusing, especially when it comes to parental allowance.
Defining freelancers in Norway
While many freelancers in Norway operate as sole proprietors (ENK), the Norwegian Labour and Welfare Administration (NAV) has a special definition in place for freelancers.
Under Norwegian regulations, freelancers are considered independent contractors who receive a salary fee (also called salaried freelancers).
In contrast, those running an ENK are classified as self-employed.
This distinction can be confusing because most freelancers in Norway are, in fact, self-employed and call themselves freelancers.
That's why, when consulting NAV's information on parental allowance or using their online site, those with an ENK should view and declare themselves as "self-employed" rather than "freelancers."
So, if you contact NAV to inquire about your rights, explain your business arrangement in detail.
Psst! If you are considering setting up as a freelancer in Norway, make sure to read The Local's in-depth guide on the options at your disposal.
Understanding your social rights as a freelancer
As a freelancer in Norway, your social rights differ from those of traditional employees.
Unlike employees, freelancers are not entitled to sick pay from their clients. However, they are eligible for sick pay from the NAV starting from the 17th day of illness.
READ MORE: What are the rules for foreigners accessing welfare in Norway
To enhance their coverage, they can also opt for voluntary supplementary insurance.
Furthermore, freelancers do not benefit from a pension scheme provided by clients, so they need to look into a personal pension plan to ensure financial security in retirement.
Under certain conditions, freelancers may be eligible for unemployment benefits.
If you need clarification on whether you qualify, contact the NAV and share the specifics of your case with them.
Parental benefits for freelancers
Parents in Norway, including freelancers, are entitled to 12 months' leave in connection with a birth of their child.
This leave period includes the mother's right to up to 12 weeks' leave during pregnancy and six weeks' leave that can only be taken by the mother after the birth.
Furthermore, all welfare benefits for freelancers and the self-employed in the country are based on the profit of their businesses.
This profit is the amount remaining after deducting business expenses.
For instance, if you invoice 600,000 kroner annually and have 150,000 kroner in expenses (such as office space, travel, and equipment), NAV will use your profit of 450,000 kroner to calculate your benefits, including parental allowance.
The maximum benefit amount is capped at six times the National Insurance basic amount (1G), which, as of May 1st, 2023, is 118,620 kroner.
This cap applies to freelancers, wage earners, and others eligible for benefits.
Calculating parental allowance
For self-employed individuals, parental allowance is typically calculated based on the average income over the last three years, with the NAV obtaining this data from the Tax Agency.
Note: If your profits have fluctuated significantly over the period or if you have been in business for less than three years, you will need to provide the NAV with a detailed description of how your business operates and makes money.
Based on that information, they will conduct an individual assessment and make a discretionary decision regarding the amount you will be paid for parental allowance.
On the other hand, the rules for salaried freelancers and those with a limited company (AS) mirror those for regular employees.
Parental allowance is generally based on the average income from the three months preceding the start of the parental benefit period.
If there is a significant difference (over 25 percent) between your annual income and your recent three-month income, NAV will determine which figure is more representative.
Parental allowance can be taken consecutively or in combination with work or holidays.
For more detailed information, you can check out NAV's guidelines on parental allowance.
Alternatives for those not entitled to parental allowance
Even if one or both parents are not entitled to parental allowance, they still have the right to parental leave.
In such cases, the mother can apply for a one-off benefit, and in certain circumstances, the father can too.
Additionally, as employee interest organisations often point out, the parent who has not accrued the right to parental allowance can begin to accrue this right while the other parent is on leave.
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