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ENERGY

Norway’s government agrees package to slash energy bills this winter

The government will cover more than half the cost of energy bills this year when the spot price rises above a certain point as part of a wider package that the Socialist Left Party has agreed to support.

Pictured are powerlines.
The government will cover half of the spot price when it rises above 70 øre per kilowatt hour. Pictured are powerlines. Photo by Fré Sonneveld on Unsplash

Following months of rising energy prices across the country and records being set for energy costs in the south of Norway throughout the winter, the government has said it would foot just over half the bill when the spot price exceeds 70 øre per Kilowatt hour. 

“Now people can go into Christmas less worried,” the Labor Party’s energy and environmental policy spokesperson Terje Aasland said.

How much will covered by the government? 

The government will cover 55 percent of the bill on energy prices above a monthly average of 70 øre per kilowatt-hour. However, this only applies to those on a spot price agreement. The spot price is the raw cost of energy paid by exchanges and energy firms. 

The deduction will appear on your bill and will be done automatically. 

How long will the scheme last? 

If implemented, the scheme will apply from December until March 2022. The deductions will appear on the bill for December, which will arrive in the new year. 

Who is eligible? 

The scheme will only apply to primary residences and not cabins or holiday homes. 

Furthermore, housing associations with a shared meter will not receive government assistance from the state. 

This means those in apartments where there’s a collective electric and water bill will not benefit from the scheme. 

Are there any other rules?  

Yes, there will be a consumption limit on the bills. Households will only receive support for consumption up to 5,000-kilowatt-hours. You will be required to pay the total price of any consumption past this limit. 

In addition to this scheme, students who can document electricity expenses will receive 3,000 kroner in extra loans, with 1,200 kroner converted into a scholarship. 

The social allowance for housing will also be increased by 1,500 months per month until March to help with energy costs. 

The new proposals will be in addition to a small cut in electricity tax of 8 øre per killowatt-hour in the winter months. 

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WORKING IN NORWAY

Five things to know about wages in Norway

Norway is a great country to live and work in, and many point to the high salaries as a major pull factor. Here’s what you need to know about the wages in Norway. 

Five things to know about wages in Norway

Norway doesn’t have a minimum wage 

Many wrongly assume that the high wages in Norway must be the result of a high minimum wage. 

However, the country doesn’t have a minimum wage which covers all sectors. Instead, wages are agreed upon through negotiations between trade unions and individual employers or employer organisations. 

This contributes to high levels of trade union membership in Norway. 

Those who aren’t in a union or sectors where membership isn’t widespread negotiate their own wages. 

Some industries, where workers are likely to be exploited or where there may be a large number of foreign workers, have minimum wages enforced by the Norwegian Labour Inspection Authority.

READ MORE: Which industries in Norway have a minimum wage?

How Norwegian wages compare 

The average salary in Norway (more on that later) was 56,360 kroner per month in 2023. 

This equates to an annual salary of around 676,000 kroner. This is a salary equivalent to 49,000 pounds, 57,510 euros, or 61,266 dollars. 

The average annual salary in the US is 59,428, according to Forbes magazine.  Eurostat, the official statistics office of the European Union, measured the average annual salary for a single worker without children at 26,136 euros and 55,573 euros for a working couple with two children. 

However, wages vary greatly across the EU. In 2022, the net annual earnings of an average single worker without children were 47,640 euros in Luxembourg compared to 8,412 euros in Bulgaria

Meanwhile, the average Dane earns 46,972 Danish kroner before taxes, according to Statistics Denmark. This is around 73,981 Norwegian kroner. In Sweden, the average salary was around 38,300 Swedish krona or roughly 38,534 Norwegian kroner

Average wage versus median wage 

The average monthly wage of 56,360 kroner is pulled up by the very highest earners. The highest earners in Norway are found in the private sector. 

Statistics Norway used to keep data on the very highest earners, and around 41,600 people were in the top one percent in 2021 (the year Statistics Norway last kept data) 

To be in Norway’s top one percent required annual earnings of 1.8 million kroner or 150,000 kroner monthly

The median wage is a far more modest 50,660 kroner. 

Income tax 

Norway uses a mixture of progressive and flat taxation. The majority of wage earners in Norway, they will pay a flat income tax of 22 per cent, along with a bracketed tax based on earnings. 

The bracket tax ranges between 1.7 and 17.5 percent, depending on one’s earnings. This means that you can have income tax of up to 39.5 percent in Norway. 

Foreigner workers who are new to Norway will be sorted into the PAYE schemeThis is a flat tax rate of 25 percent, however there are no deductibles available. After a year, they will be sorted into Norway’s regular tax system. 

Norway’s gender and immigrant wage gap 

Foreigners in Norway typically make less money than their Norwegian counterparts. The average salary for a foreign resident in Norway is around 50,270 kroner per month, according to figures from the national data agency Statistics Norway.

Furthermore, when you take immigrants out of the wage statistics, the average wage rises to 58,190 kroner. 

The highest earners amongst foreigners in Norway were those  from North America and Oceania. They made 61,810 kroner on average. 

Africans, and those from countries that joined the EU after 2004, had the lowest earnings among all immigrant groups in Norway. 

While women’s wages increased more than men’s last year, a gender wage gap still exists in Norway. An average woman’s salary amounted to 88.3 percent of a man’s monthly pay packet.

bigger gap existed between Norwegian men and foreign women. 

READ ALSO: How much money do Norway’s different foreigners make?

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