Can you have income when on holiday in Norway?

Holiday and holiday pay in Norway

In Norway, holidays are generally unpaid, and employees are not entitled to ordinary salary during holiday absence. Instead, a holiday allowance is paid instead of regular salary during the main holiday month (normally June).

The holiday pay (‘Feriepenger’ in Norwegian) is earned the year prior to the year the holidays are taken, and the payment is calculated based on the employee’s salary during the year of accrual.

Therefore, employees who did not work the previous year are entitled to holidays, but not to holiday pay.

Holiday pay is intended to ensure that employees do not lose out on salary during holiday periods because they are not entitled to salary at this time. All employees are entitled to holiday pay. The holiday pay shall be at least 10.2% of the basis for calculating holiday pay.

Holidays

• It is the “Holidays Act” and holiday regulations at the workplace that regulate the employee’s holiday (the employee is entitled to a minimum of 4 weeks and 1-day holiday per calendar year)
• If the employment begins after 30^th September, you are entitled to 1-week holiday that year
• If you do not manage to take all of the 21 days off, you may transfer some of the days to the next year
• The employer has a duty to ensure that the holiday is taken, and the employee has a duty to take a holiday
• Holidays that are not used cannot be paid

Holiday pay

• The holiday year is the calendar year. Holiday pay from an employer is calculated on the basis of the salary earned the previous calendar-year
• Holiday pay is paid once per year, before your main holiday, normally 15^th June
• Act relating to Holidays

Holiday pay and tax

• Holiday pay is exempt from payroll withholding tax when it is paid out, but it is not technically tax-free because it’s part of your annual income on which your tax rates are calculated
• What happens in practice is that you pay slightly more tax in other months to compensate for the holiday pay payment being paid out free of tax
• Holiday pay in June is not tax deducted, but if you have the tax deduction card PAYE –holiday pay WILL be deducted by 25 percent tax
• More information about tax and holiday pay can be found at the Norwegian Tax Administration official website: HERE

Do you still get holiday pay if you have worked less than a calendar year the first year?

Can you lose your holiday pay if you leave the job?

For some reason, if you terminate the employment and you want to receive the holiday payment earned this year, it will be paid to you directly. However, tax will be deducted

How to calculate holiday pay

Example where an employee earned NOK 300.000, – (gross/before tax) in 2019 and 2020:

• 25.000 + (300.000 * 0,102) – ((25.000 / 26) * 25) = 31.561,54
• You can find a link to how to calculate your holiday pay HERE