Proposed tax cuts and limits on temporary contracts

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New government will limit the use of part-time contracts

The new minority coalition formed of the Labor Party and the Center will implement measures against temporary employment and part-time work.

Employers will need to document the need for a part-time rather than a full-time position, and the opportunities where temporary workers can be used will be limited.

According to the journal of professional life VenFabevegelse, that will be unveiled when the government unveils its cabinet and platform on Wednesday.

Small tax cuts for low and middle income in the draft state budget for 2022

A slight reduction in the tax bracket has been proposed in the state budget for 2022.

The tax bracket for people in the first and second income brackets will be reduced by 0.3 and 0.2 percentage points, respectively.

Residents of Norway pay an income tax of 22%, in addition to a tax in brackets calculated according to your income. Those with incomes below 260,100 will now pay tax in increments of 1.4%, and those earning between 260,100 and 651,250 will pay tax in increments of 3.8%.

READ MORE: How Norway’s proposed 2022 state budget could affect your finances

The tax bracket could be reduced further in the future, as the Labor Party and the Center Party have pledged tax cuts for low-paid workers.

Low unemployment rate expected next year

Regarding the state budget, the outgoing Solberg government expects strong economic growth next year and low unemployment levels.

The government expects an average unemployment rate of 2.4% for next year, about half that of the 2020 pandemic.

“The economic crisis is now largely over and much of the business community expects strong growth in the future. Several industries are experiencing bottleneck problems, in part because it is difficult to obtain skilled labor, ”the press release for the state budget describe.

Last week we covered the demand for skilled labor in a number of industries. You can read about it here in last week’s recap.

The number of long-term unemployed is increasing

Unemployment in Norway during the pandemic reached historically high levels before dropping this summer and fall.

Despite the recent overall drop in unemployment, the number of people unemployed for more than 53 weeks is on the rise, according to figures from Nav. Since February 2020, the number of long-term unemployed has doubled from around 4,200 to 8,645.

The number of those unemployed for more than 81 weeks has almost doubled to over 5,000.

Peggy Hessen Følsvik, leader of the LO trade union organization, said more needs to be done to help people return to work. Følsvik stressed that more resources should be made available to the Norwegian Labor and Social Protection Administration (NAV) to help those who have been unemployed for an extended period.

“We need to find out who these people are. If they lack skills, this contributes to skills improvement measures. But what is perhaps most important in getting people back to work is the one-on-one follow-up. We know Nav has been under pressure during the pandemic, but also before that. Nav needs to have better capacity and better resources, ”Følsvik told the Nettavisen news site.

Did you know?

Not having a personummer in Norway is like having no flour when you want to bake a cake. It is a necessary ingredient for your integration in this country. The personummer, or “national identity number”, is assigned to those who wish to stay in Norway for more than six months.

A D number is the same as a national identity number, but it is only temporary. It is awarded to those who stay in Norway for less than six months. And to those who do not meet the criteria for obtaining a national identity number.

A personummer is issued to anyone wishing to stay or settle in Norway for more than six months.

READ MORE: Essential documents to have in Norway

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Please contact me at [email protected] to let me know if this weekly feature is useful and if you have any suggestions for employment related articles on The Local Norway.


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