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Jobs news in Norway: Proposed tax cuts and limits on temporary contracts

In this weeks roundup we're taking a look at how employment and how the proposed state budget for 2022 could affect you.
In this weeks roundup we're taking a look at how employment and how the proposed state budget for 2022 could affect you. Photo by Redd on Unsplash
Every week The Local brings you a roundup of the latest jobs news and talking points related to working life in Norway. This week we’re looking at proposed tax cuts and a rise in long-term unemployment.

New government will limit the use of part-time contracts

The incoming minority coalition formed of the Labour and Centre Party will implement measures against temporary employment and part-time work. 

Employers will need to document the need for a part-time position rather than a full-time one, and the opportunities where temporary workers can be used will be limited. 

According to working life news outlet FriFabevegelse, this will be unveiled when the government unveils its cabinet and platform on Wednesday. 

Small tax cuts for those on low and middle incomes in the proposed state budget for 2022

A modest cut to the bracket tax has been proposed in the state budget for 2022. 

The bracket tax for those in the first and second income brackets will be reduced by 0.3 and 0.2 percentage points, respectively. 

Residents of Norway pay an income tax of 22 percent, in addition to a bracketed tax that is calculated based on your income. Those with an income of less than 260,100 will now pay a 1.4 percent bracket tax, and those who earn between 260,100 and 651,250 will pay a 3.8 percent bracket tax. 

READ MORE: How Norway’s proposed state budget for 2022 could affect your finances

The bracket tax may be reduced more in the future as the Labour Party and Centre Party have promised tax cuts for lower earners. 

Low unemployment expected next year 

On the topic of the state budget, the outgoing Solberg government is expecting strong economic growth next year and low levels of unemployment. 

The government expects an average unemployment rate of 2.4 percent for next year, around half that of pandemic stricken 2020. 

“The economic crisis is now largely over, and large parts of the business community expect high growth going forward. Several industries are experiencing problems with bottlenecks, partly because it is difficult to obtain qualified labour,” the press release for the state budget outlined

Last week we covered the demand for qualified labour in a number of industries. You can read about it here in last weeks roundup. 

Number of long-term unemployed increasing

Unemployment in Norway during the pandemic reached historically high levels before declining this summer and autumn. 

Despite the recent decline in unemployment overall, the number of those out of a job for more than 53 weeks is increasing, according to figures from Nav. Since February 2020, the number of long-term unemployed has doubled from around 4,200 to 8,645. 

The number of those who have been unemployed for more than 81 weeks have almost doubled, reaching more than 5,000. 

Peggy Hessen Følsvik, leader of trade union organisation LO, has said that more needs to be done to help those back to work. Følsvik pointed to making more resources available to the Norwegian Labour and Welfare Administration (NAV) to assist those who have been out of work for a sustained period of time.

“We have to find out who these people are. If they lack competence, it helps with competence-enhancing measures. But what is perhaps most important for getting people back to work is individual follow-up. We know that Nav has been under pressure during the pandemic, but also before that. Nav must have better capacity and resources,” Følsvik told news site Nettavisen

Did you know? 

Not having a personummer in Norway is like not having flour when you want to bake a cake. It’s a necessary ingredient to your integration into this country. The personummer, or “national identity number”, is assigned to those who want to stay in Norway longer than six months.

A D-number is the same as a national identity number, but it is only temporary. It is assigned to those who stay in Norway for less than six months. And to those who do not meet the criteria of receiving a national identity number.

A personummer is issued for everyone who wants to stay or settle in Norway for longer than six months.

READ MORE: The essential documents you need to have in Norway

Is this useful?

Please get in touch with me at [email protected] to let me know if this weekly feature is useful and any suggestions you have for jobs related articles on The Local Norway.


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