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WORKING IN NORWAY

Should workers in Norway fear job cuts in the near future?

Companies are expected to cut back on employees amid lower investment and declining earnings, a report from the Norwegian Confederation of Enterprise (NHO) has warned.

Published: 8 March 2023 10:20 CET
Pictured are two workers finalising paperwork.
The NHO has said that one in three firms under its umbrella will consider cutting back on staff in the near future. Pictured are two workers finalising paperwork. Photo by Gabrielle Henderson on Unsplash

Norway’s job market over the past two years could be described as relatively healthy, thanks in part to record vacancies and demand for workers in several sectors.

“In Norway, (economic) activity grew at an annual rate of over three percent in the fourth quarter, far above normal cruising speed. At the end of February, only one and a half percent of the workforce was still registered as completely unemployed. The number of unfilled positions has increased further and is now the highest in at least twelve years,” the NHO wrote in a report.

However, the country’s employment outlook took a hit recently, with inflation outgrowing wages last year and a new report indicating that companies across Norway could cut back on staff.

The report from the Norwegian Confederation of Enterprise, published on Tuesday, said that firms expect an economic decline, lower levels of investment and poorer earnings.

“High inflation and increased interest rates will weaken households’ purchasing power and result in lower consumption growth this year. High costs and reduced demand reduce companies’ desire to hire and invest,” Øystein Dørum, chief economist at NHO, said in the report.

The NHO is the largest employer organisation in Norway, representing private-sector firms. It lobbies the government over business interests and negotiations with unions over annual collective bargaining agreements.

Some one in three firms has told the employer organisation that they will downsize in the near future. Furthermore, only one in six companies will increase the number of staff on their books.

Growth in the number of available positions and the number of people in work would also slow following several record years.

Towards the end of March, the NHO will discuss private-sector wage rises with the Norwegian Confederation of Trade Unions (LO).  The NHO expects wages to increase by a decent margin, although a rise in real wages looked marginal, given how inflation estimates for the rest of 2023.

READ MORE: Which industries in Norway have the most vacancies, and what do they pay?

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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. 

Published: 19 April 2024 13:04 CEST
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 scheme. This 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.

A bigger gap existed between Norwegian men and foreign women. 

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

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