August 23, 2022
Obligatorisk Tjenestepensjon - OTP is an additional pension insurance that the employers are obliged to provide for their employees in Norwegian companies.
You can read more about thisinsurance programme in Norway here.
Here's a summary of the most important issues:
In brief:
As a rule, every company in Norway with employees is required to sign an OTP contract with an insurance company or other financial institution.
Recently, our clients running branches of foreign companies in Norway (NUF) received letters from the Norwegian tax office, in which it is clearly stated that all companies, NUFs included, are obliged to sign an agreement for additional pension scheme. In the absence of such an agreement, the office may impose a fine of NOK 250 per day per employee.
As an authorized accounting office, we sometimes act as detectives and carry out detailed investigations in unclear cases. This time, we received an opinion from the tax office, which shows that foreign employees working in branches of foreign companies in Norway with A1 forms should not be covered by the OTP pension scheme.
Employers who are unable to submit A1 forms for their employees posted to the Norwegian branch, and thus pay the Norwegian social security contribution, are required to sign an OTP contract. To sum up:
At Novum, we always strive to get the heart of the matter in order to advise our clients in the best possible way!
Contact us:office@novum.no
Compulsory pension insurance for employees in Norway - OTP
Obligatorisk Tjenestepensjon - OTP is an additional pension insurance that the employers are obliged to provide for their employees in Norwegian companies.
You can read more about this
Here's a summary of the most important issues:
- Who needs to take out the insurance?
- Who pays the insurance contributions?
- How much is the contribution?
In brief:
- The insurance is bought by the employer.
- The contribution is paid by the employer, who also pays the social security contribution and the employee tax advance from the pension scheme.
- The contribution amounts to a minimum of 2% of the employee's gross remuneration.
Do branches of foreign companies in Norway have to have an OTP?
As a rule, every company in Norway with employees is required to sign an OTP contract with an insurance company or other financial institution.
Recently, our clients running branches of foreign companies in Norway (NUF) received letters from the Norwegian tax office, in which it is clearly stated that all companies, NUFs included, are obliged to sign an agreement for additional pension scheme. In the absence of such an agreement, the office may impose a fine of NOK 250 per day per employee.
Guidelines of the Norwegian tax office
As an authorized accounting office, we sometimes act as detectives and carry out detailed investigations in unclear cases. This time, we received an opinion from the tax office, which shows that foreign employees working in branches of foreign companies in Norway with A1 forms should not be covered by the OTP pension scheme.
A1 forms confirm that the employee posted to another EEA country is insured by the employer in the country of origin. A1 forms are issued by the Social Insurance Institution of the country of origin and sent to the Norwegian insurance institution - NAV. Their registration in Norway confirms that the employees are members of the insurance system in the posting country.
Employers who are unable to submit A1 forms for their employees posted to the Norwegian branch, and thus pay the Norwegian social security contribution, are required to sign an OTP contract. To sum up:
Employees of NUF and OTP
Employees with A1 - OTP is optional
Employees without A1 - OTP is compulsory
Employees without A1 - OTP is compulsory
At Novum, we always strive to get the heart of the matter in order to advise our clients in the best possible way!
Contact us:
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