SHARE
COPY LINK
For members

WORKING IN NORWAY

EXPLAINED: What is a Norwegian collective bargaining agreement? 

Workers in Norway will undoubtedly have heard about collective bargaining agreements, especially if they are unionised. But what is meant by the term, and how do they work? 

Pictured is the bridge which connects barcode with Grønland in Oslo.
This is what foreign workers in Norway need to know about trade unions in Norway. Pictured is a bridge that leads to the barcode district of Oslo. Photo by Gunnar Ridderström on Unsplash

A good work-life balance, high wages, and generous vacation time are some of the many benefits that lure foreign workers to Norway. 

However, a lot of these rights aren’t protected by Norwegian laws. Instead, worker’s regulations are a mixture of agreements between the country’s trade unions and employers, and government legislature. 

Working life in the country can best be summarised as a system of tripartite cooperation where employers, employee organisations and the government work together on matters regarding employment in the country. This is also referred to as the ‘Norwegian Model’.

“Norway is a pretty unionised country, and the regulations surrounding working life in Norway are mainly based on a mixture of laws and collective agreements,” Jan Olav Andersen, union leader for the Electricity and IT Association (ELogIT Forbundet), explained to The Local.

READ MORE: What foreign residents in Norway should know about workers’ unions

To decide on the rules and regulations that will govern working life, trade unions negotiate with employers’ organisations every couple of years to develop collective bargaining agreements which determine everything from wages to parental leave. In Norwegian, these are called tariffavtale.

Collective bargaining agreements are negotiated throughout the spring, and negotiations for some of the most prominent sectors will regularly make the domestic headlines. Before the negotiations, unions will typically announce what they expect from the talks. . 

The agreement itself is a contract which regulates employment conditions, for example, stipulating that all employees with a particular job title must receive a salary within a specific pay band, as well as holiday allowance, overtime pay, working hours, and other benefits.

The breakdown of these negotiations leads to strikes and lock outs. Industrial action is a legal part of the Norwegian working model, provided they are announced and not unsanctioned. 

As a result of the strength of the collective bargaining agreements, more than two million people are part of unions. However, some unions have much higher membership rates than others. For example, the service industry has a much lower union membership than the municipal sector, which is heavily unionised. 

Workers in unions do not need to negotiate over salaries, and if a worker is in a union, their contract will be regulated by a collective bargaining agreement. Unions cover both the public and private sectors in Norway. 

“We negotiate collectively at both a national and a company level. If you are not a member of a union, then you will have to act on your own, as we used to say, ‘alone we beg, together we negotiate’,” Andersen said.  

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

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?

SHOW COMMENTS