What is the difference between having a business and receiving a salary?

As a freelancer, with PayoutPartner you can choose whether you want to be paid for your work through your company (if you have one) or salary after tax directly to your personal account.

But what does this really mean? And what should you choose?

In this article, we will take a closer look at the difference between these two choices.

💵 Salary after tax

In many ways, this is the simplest solution

1. You send an invoice to your customer for work performed
2. PayoutPartner processes your payout, which means we take care of payroll tax, VAT and reporting to the tax authorities
3. You can spend the money you receive into your account on whatever you want

In addition to not having to think about tax and reporting, there are certain rights and benefits you get by being paid a salary after tax. This is because we deduct employer's tax when paying tax (14.1%).

You get:

• Accumulated public occupational pension (Folketrygden)
• Sick pay: 100% salary from day 17 through NAV
• Unemployment benefit

In addition, you avoid expenses associated with accounting and administration, as PayoutPartner takes care of this.

Our administration fee for processing payment after salary is only 4.9%, the lowest in the market!

💰 Payment to company

Those who have their own company (ENK/AS) often prefer to be paid directly to their company account. The amount you then get paid from Manymore.com will be higher than if you get paid after tax. That's because you get the full amount invoiced to the customer, without any tax deduction or administration.

In other words, you have to take care of all the administrative work around taxes, fees and reporting yourself when you are paid to your company.

There is a lot of time, resources and money that goes into self-administering taxes and fees. Many choose to use an accountant and an accounting program, which often entails monthly costs.

If you work freelance full-time, and it is your main source of income, it may still be a good idea to familiarize yourself with what it takes to run ENK/AS, and whether this might be something for you.

Advantages of using ENK/AS:

• Possibility to write off costs related to your business (e.g. equipment or travel expenses)
• You can choose to take out a lower salary than paid by the client
• No employer's tax (only applies to ENK)
• Deduction for VAT on most goods and services that you purchase for the business (if you are VAT registered)

🤔 So what should you choose?

If you are unsure, we recommend that you enter both invoicing without a company and invoicing with company , and what it might mean for your particular situation.

Some things to consider:

How much will I earn per month?

Is this my main occupation, or is it something I do on the side of a permanent job?

How long do I intend to work freelance?

How much do I imagine I would spend on accounting software/accountant, vs. how much will it cost me to use payroll service?

Hvis frilansarbeidet ditt ikke er fast, om det kun er midlertidig, eller du er If your freelance work is not permanent, if it is only temporary, or you are unsure whether you will continue for a long time, we recommend starting with a paid service.

Then, if you find that you want to work full-time as a freelancer, or you know that you want to continue for a long time, it makes sense to consider whether it is more profitable for you to start ENK/AS.

See an overview below that compares salary payment and payment to ENK or AS:

In any case, we recommend familiarizing yourself with what it means to start ENK on Altinn's website.

Don't hesitate to get in touch if you wonder about anything, and ✨lots of luck!✨