Sick pay is a core part of Norway’s social security system, giving employees financial security during illness. For employers it creates administrative and financial obligations that affect payroll costs and cash flow. Understanding the scheme is essential for correct accounting and efficient HR.
Section 1: Basics of the sick-pay scheme
The scheme is a statutory benefit that replaces income during illness. It is funded through employer NIC and employee social contributions, and administered by NAV with employer cooperation.
1.1 Legal basis and rights
The National Insurance Act governs sick pay:
- Right to sick pay: Employees with at least 14 days’ employment
- Employer period: Employer pays sick pay for the first 16 calendar days
- NAV period: NAV reimburses from day 17 up to 52 weeks (with caps)
- Income basis: Calculated on average income (normally last 3 months / 12 months look-back)
1.2 Documentation
- Self-certification (egenmelding) for short absences (typically up to 3 days, extended in IA companies).
- Doctor’s certificate (sykmelding) required after the self-cert period.
- Employers must keep documentation for payroll, NAV reimbursement and audits.
1.3 Accounting treatment (high level)
- Employer period: Record sick pay expense and accrue employer NIC; no receivable from NAV.
- NAV period: Recognise a receivable for expected NAV reimbursement when entitlement is established; reverse on receipt.
- Statutory caps: Apply NAV ceilings when calculating receivables; excess is employer cost.
1.4 Key processes
- Report income and employment via the a-melding monthly.
- Submit income statement to NAV when claiming reimbursement.
- Track sickness days to avoid exceeding maximum periods.
Summary
Sick pay shifts cost from employer (first 16 days) to NAV thereafter. Correct documentation, reporting and accruals ensure compliant payroll, accurate accounts and timely reimbursements.