Do I Have to Pay Employee Pensions (OTP)?

I hired my first employee on a 100% position three months ago and only just read about OTP. Should I already be paying their pension and can I get a penalty for being late?

OTP is one of the core obligations of employers in Norway. However, whether this obligation arises depends on the number of employees, the size of their positions, and whether they hold shares in the company.

In this article, we explain when you must set up an OTP scheme, which employees need to be covered, what the minimum contribution is in 2026, and what to do if the company did not enter into an agreement on time.

When must a company set up OTP?

OTP, or obligatorisk tjenestepensjon (mandatory occupational pension scheme), means that the employer funds employees' pension savings. You do not pay the pension directly to the employee. Instead, you enter into an agreement with an approved pension provider and pay contributions to it.

The obligation applies to private employers, including AS, ANS and ENK businesses that employ staff. A company must set up OTP when it meets at least one of the conditions set out in the OTP Act:

For example, four employees working 50% each equal two full-time positions in total, so the company meets the third condition.

The most common situations are as follows:

An ENK owner and an owner employed by their own AS can voluntarily enter into a pension agreement if the company does not meet the requirements for mandatory OTP. We describe the other formalities related to hiring your first employee in the article How to hire your first employee in Norway step by step?

Which employees must be covered by the scheme?

The 75%, 20%, and two full-time position thresholds are used to determine whether the company is subject to the OTP obligation. They do not determine which employees are covered by the scheme.

Once a company is subject to OTP, it must cover an employee who:

• is a mandatory member of the Norwegian National Insurance Scheme, folketrygden,
• has turned 13 years old,
• has received pay from an ordinary employer exceeding NOK 2,000 in 2026.

For tax-exempt organisations, the threshold is NOK 10,000 per year. Once the relevant threshold is exceeded, the entire salary is subject to reporting and contributions, not only the amount above the threshold.

This means that an employee working, for example, in a 10% position is also entitled to OTP if the company is already covered by the scheme and the employee meets the conditions above. The former general requirement to work at least 20% for membership in the scheme has been abolished.

If you hire an employee in a company already covered by OTP, you register them in the scheme from their first day of employment, and calculate contributions from the first krone of their salary. If the company only meets the statutory criterion later, the funding obligation arises from the day that criterion is met.

A foreign pension scheme does not automatically exempt you from Norwegian OTP. For a posted employee or an employee insured in another country, you must first establish whether they are a mandatory member of the Norwegian National Insurance Scheme.

How much does OTP cost in 2026?

The minimum contribution funded by the employer is 2% of salary from the first krone up to 12 G. You cannot deduct the mandatory 2% from the employee's salary or transfer this cost to the employee.

From 1 May 2026, the basic amount G is:

• 1 G = NOK 136,549,
• 7.1 G = NOK 969,497.90,
• 12 G = NOK 1,638,588.

No mandatory OTP contribution is calculated on the part of the salary exceeding 12 G. For a salary of at least 12 G, the minimum contribution based on the G amount applicable from 1 May 2026 is NOK 32,771.76 per year.

The company may adopt rates higher than the statutory minimum. However, the scheme rules must be the same for employees belonging to the same plan.

Example of the cost for a salary of NOK 600,000

With an annual salary of NOK 600,000, the minimum OTP contribution is:

• NOK 600,000 x 2% = NOK 12,000,
• the employer's social security contribution, arbeidsgiveravgift, in zone I at a rate of 14.1%, is NOK 1,692 on this contribution,
• the total cost is at least NOK 13,692.

This amount is increased by the pension provider's administrative fees and the cost of mandatory contribution waiver cover if the employee becomes at least 20% unable to work. The actual cost of OTP is therefore higher than just 2% of salary.

Contributions and premiums paid into an approved scheme are tax-deductible expenses for the employer if they meet the statutory requirements. We discuss the other components of employment costs in the article How much does an employee really cost in Norway?

How do you set up and report OTP correctly?

From the date the obligation arises, you have 6 months to enter into an agreement with an approved pension provider, such as a bank, life insurance company, or pension undertaking.

Reporting in the a-melding

In the a-melding (monthly employment and salary report), the accountant provides the organisation number of the institution managing the OTP scheme. This information is reported every month from when the agreement takes effect until it ends.

Simply identifying the provider does not replace reporting pension contributions and premiums subject to the employer's social security contribution. We describe the rules for the full report in the article What is the a-melding and when must it be submitted?

Consequences of not having OTP

If you do not set up the scheme on time, you must pay the outstanding contributions due to employees from the date the obligation arose. Skatteetaten also has the right to:

• order the scheme to be established,
• impose tvangsmulkt of NOK 250 for each employee for each day until the establishment of OTP is documented,
• refer the matter for further proceedings which, in serious cases, may result in a fine or imprisonment for up to 2 years.

The deadline for appealing an order or a decision on tvangsmulkt is 3 weeks from receiving the decision.

FAQ - frequently asked questions

Summary

• The OTP obligation arises when at least one statutory criterion relating to the number of employees and their working hours is met.
• In 2026, the minimum employer contribution is 2% of salary from the first krone up to 12 G, and the cost also includes fees, insurance, and the employer's social security contribution.
• The agreement must be entered into within 6 months, but the contributions due are calculated from the date the obligation arises.
• Once the scheme has been established, it must cover all eligible employees, including those working in small part-time positions.

If you need help with OTP reporting, call us: +47 21 38 38 21. We will help you correctly determine your employer obligations and ensure they are continuously met by authorised accounting services in Norway.

Article author: Marcin - marcin@efirma.no