Approved hourly rates

For projects funded by us where salary costs are included in the approved cost basis, the following provisions apply to hourly rates and related matters:

• All hours included in the project accounts must be reported through payroll.
• The approved hourly rate is up to 0.12% of the agreed actual annual salary, capped at NOK 700 per hour. Up to 1,850 hours per year may be approved.
• The agreed and actual annual salary is the annual salary at the end of the project period or income year. Fixed contractual benefits in kind are included when calculating the agreed annual salary. Variable supplements such as bonuses, overtime pay and similar payments are not included in the agreed annual salary. When calculating the annual salary, the agreed annual salary of part-time employees is converted to the full-time equivalent. The employee's nominal annual salary, as well as the date and amount of the most recent salary adjustment, must be documented. The same maximum hourly rate also applies when purchasing services from related parties.
• For work carried out by the owner of a sole proprietorship and by partners in an unlimited liability partnership (ANS) or a partnership with shared liability (DA), a maximum rate of NOK 450 per hour and a maximum of 1,850 hours per year will be approved. This work must not be reported as salary.
  For funding commitments where the hourly rate is specified in the offer letter, this rate must be used for reporting and disbursement.
• The hourly rates also include standardised overhead costs. The standardised mark-up for overhead costs covers costs already included in the company's accounts. Examples include social security costs, rent and depreciation related to instruments, machinery, tools, equipment and premises, as well as finance, ICT, travel, pensions, insurance, office costs and supplies.

• Anyone employed by a business must have a written permanent or temporary employment contract covering the period in which they work on a project funded by us.
• The company must have a time-recording system that enables the auditor to verify the hours worked in accordance with our guidelines. The system must show which employees have worked on the project, the number of hours worked and the project activities to which those hours relate. If the company does not have its own time-recording system, you can use the template below.
• If required, your company must be able to provide documentation confirming the hours worked, such as digital reports or exports from the time-recording system. Both the employee and the project manager must approve the hours on an ongoing basis. You must retain the documentation for at least five years.
• Time costs calculated using the hourly rates above, multiplied by the number of hours worked, must be shown separately in the project accounts. Timesheets must be retained for five years.

View the timesheet template

The approved hourly rate is up to 0.12% of the agreed actual annual salary, capped at NOK 700 per hour and 1,850 hours per full-time equivalent. This means that up to NOK 1,295,000 per full-time equivalent may be included in the calculation basis for loans and grants.

We accept an annual salary of up to NOK 583,333 (x 0.12% = NOK 700 per hour) as the basis for our loans and grants. If the annual salary is higher, your company must cover the additional costs. If the annual salary is lower, the hourly rate used to calculate loans and grants will also be lower.

For an employee with an annual salary of NOK 583,333, the hourly rate of NOK 315.31 will form the basis for the company’s payroll reporting and the associated payment of employer’s National Insurance contributions and the employee’s tax.

The remaining portion of the hourly rate, capped at NOK 700 per hour, must cover standard overheads included in the company’s costs. Examples include social security costs; rent and depreciation related to instruments, machinery, tools, equipment and premises; finance; ICT; travel; pensions; insurance; and office supplies. You do not need to document these costs. However, you must prepare the accounts to show the number of hours on which the project’s payroll reporting is based, multiplied by the hourly rate.

For investment projects, acquisition costs are approved, including any use of your own employees and equipment, up to the amounts specified in the offer letter, as well as hours that an auditor or authorised accountant can confirm are directly attributable to the acquisition cost of the asset.

• For work carried out by the owner of a sole proprietorship and by partners in an ANS or DA, a maximum rate of NOK 450 per hour and a maximum of 1,850 hours per year will be approved. This work must not be reported as salary.
  For funding commitments where the hourly rate is specified in the offer letter, this rate must be used for reporting and disbursement.
• For sole proprietorships in the agricultural sector, the same hourly rate as for the proprietor is accepted for a spouse or registered cohabiting partner, provided that they are involved in the business. 
• For investment projects carried out by sole proprietorships in the agricultural sector, the owner's own work is eligible at the hourly rates specified in the offer letter, while the use of their own machinery is eligible at a rate of up to NOK 900 per hour. In such cases, the owner's own work does not need to be recognised as income or capitalised on the balance sheet. The owner's own contribution must be itemised separately in the project accounts, and timesheets must be provided on request.

Template for recording hours worked in agriculture

Input VAT that may be deducted or for which compensation may be claimed cannot be included in the basis for loans or grants from us. For businesses that carry out activities subject to VAT but have not yet reached the turnover threshold for registration in the VAT Register, input VAT cannot be included in the project accounts to the extent that the business may subsequently claim a deduction through a retrospective VAT settlement or in the course of ordinary operations.

Businesses that have purchased services from related parties for more than NOK 100,000 excluding VAT must, upon request, provide the suppliers’ project accounts and supporting documentation for the invoice as evidence of the costs.

The same approved hourly rate that applies to the grant recipient/borrower also applies when purchasing services from related parties.

We use the following definition of related parties (which is equivalent to the definition used for SkatteFUNN):

Related parties are defined as:

a) companies, etc. in which the enterprise directly or indirectly holds an ownership interest or controlling interest of at least 50 per cent,

b) any person, company or similar entity that directly or indirectly owns or controls at least 50 per cent of the business,

c) a company or similar entity in which a related party as defined in point b, directly or indirectly, holds an ownership interest or exercises control of at least 50 per cent,

d) the parents, siblings, children, grandchildren, spouse, cohabiting partner, spouse’s parents and cohabiting partner’s parents of a related person under point b), as well as companies and similar entities in which these persons, directly or indirectly, own or control at least 50 per cent,

e) a board member or general manager of the business, and

f) the spouse of, or a person cohabiting in a relationship akin to marriage with, a person referred to in e).

A person, company, etc. is considered a related party if the ownership or control requirement has been met at any time during the income year.