What you need to know about having a side hustle or second job in Norway
More and more people in Norway are looking for alternative sources of income. But before you take on more work, it's important to understand the tax rules and cultural dynamics at play.
The tax implications of side hustles and second jobs
One key aspect to consider when taking on a side hustle or second job in Norway is the tax implications.
As a general rule of thumb, income derived from paid work is subject to taxation.
The country's progressive tax system also applies to additional income from side gigs or secondary employment (you can learn more about how it works in The Local's deep dive explainer on bracket tax, here).
READ MORE: Five things to do when you get your Norwegian tax return
Remember to accurately report all sources of income to the Norwegian Tax Administration (Skatteetaten), as failure to do so can result in penalties and legal consequences, turning your shot at extra income into an expensive and stressful nightmare.
On top of that, there are also administrative and reporting considerations at hand if you have multiple sources of income, and you'll likely need to navigate complex tax calculations to ensure compliance with Norwegian tax laws.
That being said, getting a side job or second job isn't impossible - many people successfully manage to do so, so don't be discouraged.
One of the great things about living in Norway is that its tax authorities generally and genuinely try to act as an advisory organ (handing out advice to taxpayers) instead of a punitive one (looking for small errors and finding people, which is often the case in many other European countries).
So, if you have any questions or concerns regarding the specifics of your tax situation, the tax authorities will always provide excellent advice.
Balancing multiple employers
In Norway, you can legally hold multiple jobs totalling more than 100 percent of a full-time workload if you're of age.
However, while the Norwegian Working Environment Act imposes limits on the hours an employee can work for a single employer, working for multiple employers can lead to longer total working hours.
It's crucial to consider whether your employment agreement places any restrictions on additional employment. Moreover, having multiple jobs requires careful coordination to ensure obligations are met.
Tax exemptions for some odd jobs
The regulations concerning tax exemptions for certain odd jobs (such as cleaning, gardening, minor repairs, tutoring, or some instances of freelance work) aim to simplify reporting for employers in Norway rather than provide tax-free income to workers.
Furthermore, the sums within this tax-exempt framework are not significant - the Tax Administration has a breakdown of the threshold on its website.
READ MORE: Five ways to legally lower your tax bill in Norway
For instance, you can earn up to 1,000 kroner per year tax-free for jobs carried out outside your employer's premises.
This tax exemption increases to 6,000 kroner when the work is carried out in your home or holiday home.
If you're not sure whether you're eligible to claim this tax-exempt income, or if you want to find out more on the tax aspects of taking on small side jobs, check the handlehvitt.no webpage launched by the Collaboration Against the Black Economy (SMSØ), a joint effort between several unions and business organisations and the Tax Administration.
In Norway, certain odd jobs like minor repairs, cleaning, and gardening qualify for small tax exemptions. Photo by Theme Photos on Unsplash
When do odd jobs and hobbies become business ventures?
Engaging in numerous odd jobs for different employers may be considered a business activity by Norway's tax authorities.
If the extent of payment received for these jobs warrants categorisation as a business activity, you'll have to register as self-employed, and all income must be recorded in your business's accounts.
Additionally, the business may be subject to value-added tax (VAT) – you'll usually need to register for VAT when your sales have exceeded 50,000 kroner during a 12-month period.
Whether an activity is deemed a hobby or a business depends on various factors, including whether you receive salaries for other types of work.
There is no fixed monetary threshold that definitively determines when an activity transitions into a business. The tax authorities evaluate each case individually to determine whether the overall activity meets the general conditions for business activity.
As always, if you're uncertain, reach out to Skatteetaten for clarification.
Business setup for freelancing
If you want to go after additional income as a freelancer, setting up a sole proprietorship (enkeltpersonforetak, or ENK as it's abbreviated in Norwegian), is the way to go for most people who are just starting out, as it provides a straightforward path to invoicing and running a business.
As your business grows, you might need to consider transitioning to a limited company (an aksjeselskap, AS), especially if you reach the point where you need to consider employing staff.
Compliance with Norwegian business regulations is crucial regardless of your chosen business setup, so you must maintain bookkeeping records and ensure invoices are up to Norwegian standards (accounting software such as Conta will usually do the trick if your business operations are small but if you grow quickly, look into hiring an accountant).
READ MORE: Do you need an accountant in Norway if you are self-employed?
Know that the tax authorities will consider both your salary income and your company's financial results when calculating your tax return's annual numbers.
Cultural factors influencing secondary employment
It will probably not take long for you to realise that, in Norway, the combination of high taxes and cultural attitudes towards additional work is intended to de-incentivise people from pursuing secondary employment or chasing extra work.
Norway's progressive tax system means that, as you earn more, you enter higher tax brackets, resulting in a smaller proportion of each additional earned krone ending in your pocket after taxes.
READ MORE: Does Norway really have some of the highest taxes in the world?
This reduced financial incentive discourages many from seeking extra work – as does the administrative burden of managing additional income, including tax reporting and compliance requirements.
Furthermore, Norwegian culture places a strong emphasis on work-life balance and leisure time. This cultural value often discourages people from dedicating excessive time to work outside their primary employment, compelling them to prioritise leisure time and family over working extra hours.
Therefore, you should make sure to run the numbers and see whether the higher tax burden will make it worthwhile - or whether you'll be better off just negotiating a raise at your current job or finding a new primary job that pays better.
READ MORE: How foreigners in Norway have made themselves 'more Norwegian' to fit in
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The tax implications of side hustles and second jobs
One key aspect to consider when taking on a side hustle or second job in Norway is the tax implications.
As a general rule of thumb, income derived from paid work is subject to taxation.
The country's progressive tax system also applies to additional income from side gigs or secondary employment (you can learn more about how it works in The Local's deep dive explainer on bracket tax, here).
READ MORE: Five things to do when you get your Norwegian tax return
Remember to accurately report all sources of income to the Norwegian Tax Administration (Skatteetaten), as failure to do so can result in penalties and legal consequences, turning your shot at extra income into an expensive and stressful nightmare.
On top of that, there are also administrative and reporting considerations at hand if you have multiple sources of income, and you'll likely need to navigate complex tax calculations to ensure compliance with Norwegian tax laws.
That being said, getting a side job or second job isn't impossible - many people successfully manage to do so, so don't be discouraged.
One of the great things about living in Norway is that its tax authorities generally and genuinely try to act as an advisory organ (handing out advice to taxpayers) instead of a punitive one (looking for small errors and finding people, which is often the case in many other European countries).
So, if you have any questions or concerns regarding the specifics of your tax situation, the tax authorities will always provide excellent advice.
Balancing multiple employers
In Norway, you can legally hold multiple jobs totalling more than 100 percent of a full-time workload if you're of age.
However, while the Norwegian Working Environment Act imposes limits on the hours an employee can work for a single employer, working for multiple employers can lead to longer total working hours.
It's crucial to consider whether your employment agreement places any restrictions on additional employment. Moreover, having multiple jobs requires careful coordination to ensure obligations are met.
Tax exemptions for some odd jobs
The regulations concerning tax exemptions for certain odd jobs (such as cleaning, gardening, minor repairs, tutoring, or some instances of freelance work) aim to simplify reporting for employers in Norway rather than provide tax-free income to workers.
Furthermore, the sums within this tax-exempt framework are not significant - the Tax Administration has a breakdown of the threshold on its website.
READ MORE: Five ways to legally lower your tax bill in Norway
For instance, you can earn up to 1,000 kroner per year tax-free for jobs carried out outside your employer's premises.
This tax exemption increases to 6,000 kroner when the work is carried out in your home or holiday home.
If you're not sure whether you're eligible to claim this tax-exempt income, or if you want to find out more on the tax aspects of taking on small side jobs, check the handlehvitt.no webpage launched by the Collaboration Against the Black Economy (SMSØ), a joint effort between several unions and business organisations and the Tax Administration.
When do odd jobs and hobbies become business ventures?
Engaging in numerous odd jobs for different employers may be considered a business activity by Norway's tax authorities.
If the extent of payment received for these jobs warrants categorisation as a business activity, you'll have to register as self-employed, and all income must be recorded in your business's accounts.
Additionally, the business may be subject to value-added tax (VAT) – you'll usually need to register for VAT when your sales have exceeded 50,000 kroner during a 12-month period.
Whether an activity is deemed a hobby or a business depends on various factors, including whether you receive salaries for other types of work.
There is no fixed monetary threshold that definitively determines when an activity transitions into a business. The tax authorities evaluate each case individually to determine whether the overall activity meets the general conditions for business activity.
As always, if you're uncertain, reach out to Skatteetaten for clarification.
Business setup for freelancing
If you want to go after additional income as a freelancer, setting up a sole proprietorship (enkeltpersonforetak, or ENK as it's abbreviated in Norwegian), is the way to go for most people who are just starting out, as it provides a straightforward path to invoicing and running a business.
As your business grows, you might need to consider transitioning to a limited company (an aksjeselskap, AS), especially if you reach the point where you need to consider employing staff.
Compliance with Norwegian business regulations is crucial regardless of your chosen business setup, so you must maintain bookkeeping records and ensure invoices are up to Norwegian standards (accounting software such as Conta will usually do the trick if your business operations are small but if you grow quickly, look into hiring an accountant).
READ MORE: Do you need an accountant in Norway if you are self-employed?
Know that the tax authorities will consider both your salary income and your company's financial results when calculating your tax return's annual numbers.
Cultural factors influencing secondary employment
It will probably not take long for you to realise that, in Norway, the combination of high taxes and cultural attitudes towards additional work is intended to de-incentivise people from pursuing secondary employment or chasing extra work.
Norway's progressive tax system means that, as you earn more, you enter higher tax brackets, resulting in a smaller proportion of each additional earned krone ending in your pocket after taxes.
READ MORE: Does Norway really have some of the highest taxes in the world?
This reduced financial incentive discourages many from seeking extra work – as does the administrative burden of managing additional income, including tax reporting and compliance requirements.
Furthermore, Norwegian culture places a strong emphasis on work-life balance and leisure time. This cultural value often discourages people from dedicating excessive time to work outside their primary employment, compelling them to prioritise leisure time and family over working extra hours.
Therefore, you should make sure to run the numbers and see whether the higher tax burden will make it worthwhile - or whether you'll be better off just negotiating a raise at your current job or finding a new primary job that pays better.
READ MORE: How foreigners in Norway have made themselves 'more Norwegian' to fit in
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