Feriepenger in Norway is holiday pay. It is usually 10,2% of the salary obtained in the previous year, but it may vary depending on age. There are many myths surrounding this benefit, which result from a misunderstanding of how this instrument functions. Unfortunately, it is carefully exploited by employers, that's why worth knowing, what is feriepenger and when is it paid.
Feriepenger - Salary Supplement?
Worth knowingthat holiday leave in Norway is remuneration usually paid in the last month before holiday leave. There is no rule that regulates the exact deadline benefit payments. To make it easier, employers do this in June, but it is not standard in all cases workplaces. The rule is that holiday pay must be paid before the employee's leave.
Also read: How much leave are you entitled to in Norway? >>>
The amount of holiday pay in Norway
As a rule, holiday pay is 10,2% gross of the total previous year's remuneration. Statutory persons above However, the age of 60 is eligible higher rate – 12,5% of total salary. Under collective agreements, this rate may be even higher and in such cases it generally fluctuates around 12 - 14,3% of remuneration.
What is included and what is not?
It is worth knowing that the holiday benefit does not include any allowances from the employer, such as: diet, travel allowance, cost reimbursement accommodation or the holiday benefit itself from the previous year. However, a nod to the beneficiaries of the social welfare system is the possibility of including some benefits in the basis for calculating feriepenger in Norway. This applies in particular to the following benefits:
- parental benefit (norw. foreldpenger),
- pregnancy allowance (norw. svangerskapspenger),
- care allowance (norw. pleiepenger) and training allowance (norw. opplæringspenger),
- sickness allowance.
WARNING! The following income cannot be used as the basis for calculating the holiday benefit:
- rehabilitation allowance,
- parental leave which was the basis for the calculation rehabilitation allowance,
- parental allowance collected along with rehabilitation allowance.
Feriepenger in Norway and termination of employment
Upon termination of the employment contract, the employer is obliged to pay the employee the entire leave entitlement for the previous year along with the benefit worked out until it ceases employment relationship. To better illustrate the situation, let's assume that the employment contract was terminated on September 30, 2018. Therefore, the employee is entitled to:
- the whole holidaypenger for 2017,
- feriepenger for 9 months in 2018.
If the employer intends to pay the benefit for 2018 in 2019 breaks the law. It is worth taking care of this, especially if you are planning to return to Poland. If the benefit is paid to you in the following year, you will be obliged to pay tax on your holiday pay yourself, as well as to submit an additional testimony tax return for 2019.
Also read: Working time in Norway - how much do you have to work? >>>
Feriepenger in Norway. Tax and holiday pay
It is worth emphasizing that, contrary to popular belief, holiday benefits in Norway is not exempt from income tax. They have it here the same regulations apply, as in the case of the holiday season. This is the time exempt from paying an advance payment (Norwegian. trekkfri), however, not released from paying tax (Norwegian skattefri). The employer pays advance payments for the feriepenger income tax and the holiday period for 10,5 months a year.
Who is eligible for the benefit?
The key information is also the fact that holiday pay is due to every person employed by a Norwegian employer. Fishermen and sailors are also entitled to this benefit, provided, however, that they have the status of a Norwegian employee. As a consequence, this benefit is not available to people working in foreign companies and do not receive income taxed in Norway.
Also read: Employment contract in Norway - how to take care of your rights? >>>
The self-employed cannot count on a holiday in Norway either. As a rule, entrepreneurs have to earn their own vacation. Freelancers and the unemployed cannot count on this benefit either.
Also read our next article from 2021: Nav is ready to pay holiday allowance...
When is it paid?
Good to rememberthat the date of benefit payment may vary depending on the rules adopted by a specific employer. To make things easier, some of them pay their employees this benefit in June, before the start of the holiday season. The most important principles include the following two:
- in the case of people who received pregnancy, sickness or parental benefit in the previous year, the benefit must be paid by the end of May,
- otherwise, the benefit must be paid in the last month before the holiday at the latest.
Feriepenger in Norway - what is worth remembering?
Feriepenger in Norway is holiday pay which is paid instead of one salary. It amounts to 10,2% of last year's total income - although the rate may vary. It is worth knowing that the benefit should be paid no later than one month before the planned vacation. In the event of termination of employment, e.g. in 2018, you are entitled to all remuneration earned both in 2017 and until you stop working in 2018.
Prepared on the basis of Arbeidstilsynet.no
