The Ultimate Guide to Freelancer Payment Solutions in Norway
The freelance work economy in Norway is a thriving industry and many individuals are becoming more appreciative of freelance gigs due to the perks of flexibility and independence they provide. But managing payments and taxes can be a challenge because of strict freelancer tax and payment policies within the country.
Keep reading as we’ll walk you through navigating freelance payments and also explain how you can take advantage of the best freelancer payment solution. You’ll also learn about invoicing as a freelancer and tips for handling taxes.
✅Navigating Taxes in Norway - Why It Matters To You
Let’s face it - while taxes are an important part of the economy, they’re boring and can become a headache really quickly if you don’t know what you’re doing. Here’s the good news: you can absolutely avoid tax issues as a freelancer while still getting timely payments. Continue reading to see how.
Why Should You Care About Taxes?
Taxes aren’t just a legal obligation; they’re the key to keeping your freelance business legit and thriving. Whether you’re invoicing as a private person or running a small business, staying on top of your taxes ensures you avoid penalties and can even unlock benefits like deductions on business expenses.
The basics you need to know
- Income Tax: is calculated based on your total income, which includes earnings from both commercial activities and other sources. Tax is determined using a two-stage system: ageneral income tax (alminnelig inntekt) at a fixed rate of 22%, and abracket tax (trinnskatt) at progressive rates.
- Employee Tax: A 14.1% employer's tax, which all employers must pay to the Tax Agency.
- VAT Registration: If your income exceeds NOK 50,000 within a 12-month period, you’re required to register for VAT. This adds an extra layer to your invoicing
As you may have concluded, there’s a lot to keep in mind when considering freelance payment and tax deductions. So what then is the best way to invoice your clients and get paid without the boring tax paperwork?
How To Get Paid as a Freelancer in Norway
Invoicing is a core part of offering services and getting paid. It has also become an essential part of freelancing and must be carefully considered to avoid costly mistakes.
As a freelancer, there are only two real ways to invoice and get paid;
Invoicing with a company or as a self employed person is technical and can get really confusing. This is because you must have a registered company, which allows you to obtain an organizational number and have a company bank account. Natural persons are not authorized to issue invoices. Sole proprietorship comes with a lot of paperwork and compliance details that may not be your cup of tea.
Invoice Without a Company
The alternative is to hire accountants who are usually expensive to service, or use a payroll service offered by a reputable payment solution company like PayoutPartner. PayoutPartner allows you to invoice your clients and get paid while avoiding all of the paperwork that is originally required when invoicing with your own company.
With PayoutPartner, you will not have to worry about tax calculations and deductions, all of which will be handled for you. Payment will be made directly into your bank account once your customer pays and all relevant taxes will be automatically deducted, including a service charge of 4.9% invoice amount. Read more about PayoutPartner pricing and tax.
When to Hire an Accountant
Managing your finances using a payroll service like PayoutPartner saves money, but as your income grows, a professional accountant will come in handy as the policy regarding higher income earners are a bit different.
Benefits of Hiring an Accountant:
- Accurate tax filing to avoid penalties on income above NOK 50,000/year.
- Expert advice on managing expenses and savings.
Look for accountants experienced in freelancing to get tailored advice.
💵Payment Should Be Easy
Freelance invoicing and payment do not have to be difficult or complex. With PayoutPartner, you can avoid all of the headaches and potential mistakes that come with invoicing as a private person. Get started today to enjoy the best freelance invoicing and payment service in Norway.