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2009-09-08 02:12:00 - By

How High Are Taxes in Norway?

-- government building in oslo norway -- Norway has been brought up quite a bit in the American media as of late.

Why is this small (population of less than 5 million people) Scandinavian country such a popular topic of conversation?

First off, Norway is being used by many advocates of health care reform in the United States as an example of how health care should be delivered in a country. Everyone is covered by universal health care in Norway.

Second, many people point to Norway as a shining example of how a government should manage its finances. Norway is in phenomenal shape in terms of its finances, with the country being able to boast of an extremely low unemployment rate (3.0%) and approximately $400 billion dollars USD in its government pension fund.

Michael Moore included a 10 minute segment on Norway as an extra on his "Sicko" DVD. Moore extols the virtues of the Norwegian system, giving a long laundry list of all of the perks that Norwegian citizens are entitled to. I have included the clip below:

All of this talk about Norway piqued my interest. The country is one of the wealthiest in the world per capita, and they also have one of the highest standards of living of any country in the world. How is this possible, and how is the government able to provide so many perks to its citizens?

In researching Norway, I quickly learned that the country has significant resources (they are one of the world's largest exporters of oil, natural gas and seafood). I also learned that the government has majority or full ownership of the largest operators in the Norwegian oil fields, and that any "surplus wealth" from Norwegian petroleum income is invested straight into the government pension fund.

I also learned that the Norwegian government has large ownership stakes in many important companies that operate in the country - as a matter of fact, the government has majority stakes in nearly 1/3rd of all publicly-listed companies in the country.

The thing that I was most curious about is Norway's tax system. I've heard from friends that used to live in the country that their taxes were really high, but I wanted to find out for myself.

Here are some of the major components of the Norwegian tax system. Most of this information is from a publication from KPMG called "Tax Facts Norway 2009: A survey of the Norwegian Tax System", which I have linked to below.

1. Income Tax.

Income tax is charged at a flat rate of 28% on net income.

A 9% surtax is charged on gross income if you earn between the equivalent of $73,641 - $119,662 USD, while a 12% surtax (on gross income) is charged if you earn anything over that.

In addition, taxpayers must make social security contributions based on whatever they make over $6,612 USD. 7.8% of any salary made over this amount goes towards social security contributions. Pension income is charged at a lower 3.0% rate.

2. Value Added Tax.

A Value Added Tax (or VAT) is charged on the sale of most goods and services in the country.

The general rate is 25%. A reduced rate of 14% applies to the sale of food and drink, while an even lower rate applies to hotel lodging, cinema shows, public transportation services and broadcasting charges.

The 14% rate does not apply to eating out at a restaurant. So, if you decide to take the family out for a dinner that ends up costing the equivalent of $100 USD, be prepared to pay an extra $25 in taxes (before the tip, of course).

3. Wealth Tax / Net Asset Tax.

Norwegians must pay an annual "wealth tax" on their net "worldwide assets".

There is an exemption (up to the equivalent of $78,483 USD), with any amount over that being subjected to a 1.1% "wealth tax".

In order to figure out how much you would pay, take the total worth of your assets (house, cash in the bank, etc) and subtract any liabilities (mortgage, etc).

As mentioned, there is an exemption up to 470,000 NOK (which works out to $78,483 USD) - any amount over that, and you are paying a 1.1% wealth tax.

As far as I am aware, this includes houses, cash in the bank, etc.

4. Property taxes.

Norwegian municipalities can choose to impose a property tax of between 0.2-0.7% on the total "fiscal value of the property". Not all Norwegian municipalities choose to levy this tax.

5. Death / Inheritance Tax.

Children, foster children and parents of the deceased pay a progressive rate for an inheritance or death tax. Here are the USD equivalents:

First $78,483 - Nothing
Next $55,105 - 6%
Anything Over $133,589 - 10%

"All other beneficiaries" pay this rate:

First $78,483 - Nothing
Next $55,105 - 8%
Anything Over $133,589 - 15%


These are five major taxes that apply to the average citizen of Norway.

There are obviously also corporate taxes (which is a flat rate of 28% of taxable profits), but we won't get into that here.


According to Forbes magazine, Oslo, Norway is the 14th most expensive city in the world to live in, just behind Paris and Milan.

As a whole, Norway is one of the most expensive countries in the world to live in, according to various cost of living indexes.


Now, I'm not advocating one system over another.

However, I've heard many people over the last few weeks say "Why can't we have what the people of Norway have?", and I wanted to find out more.

Source: KPMG.no - Tax Facts Norway 2009: A survey of the Norwegian Tax System

Filed under: General Knowledge

33 COMMENTS - What Say You?

Comment by Monique on September 08, 2009 @ 2:47 am

It's easy to think that the Norwegians are lucky with all the "perks" they get from their government. But it's also easy to forget that they pay for these "perks" at tax time.


Comment by John on September 08, 2009 @ 4:33 pm

I know someone who is from Norway… I have been told that their health care system isn't very good and the bedside manner stinks. I understand this is one person's view.

Someday, our taxes will have to be that high to fund our future national healthcare system and our debt. The only difference will be is that in Norway everyone has some skin in the taxpaying game whereas in the US, it is only the high income groups that pay substantial taxes. The US lower income tax brackets of negative taxes (the earned income tax credit groups), and the ones below Norway’s 28% taxes can hardly be considered “skin in the game” worthy. Things need to be equaled a little better. EVERYONE needs to pay taxes in order for these systems to work without major backlash.

What is the average tax rate paid in the US?


Comment by Marc Jordan on September 09, 2009 @ 12:30 pm

Whoa, it seems that the Norwegian system may actually be better than the US. Here's why:

1. The base tax rate of 28% is pretty much in line with the US.

2. Workers have 7.8% taken out of their paycheck for Social Security, versus our 7.65% (ha, we are lower).

3. In the US, many states levy state and local income taxes. In California I think it's around 10%.

4. Their property taxes are outrageously low. The article quotes a high of .07%. Here in the US we pay
anywhere from 2-3%.

5. A 25% VAT does sound excessive compared to out state income taxes. But some states such as New York and California are approaching 10% sales tax.

6. The author asks how we would like to have $25 added to a $100 restaurant bill. My experience in Norway was that the VAT is always included in the menu price. At the bottom of the menu is usually a line stating "Prices inclusive of VAT".

7. One thing the author didn't mention is that in Norway college tuition is free to students and paid through the tax system.

So as you can see, things aren't always what they appear.


Comment by Dave on September 09, 2009 @ 4:02 pm

Hi Marc

Thanks for your comments.

Just a few things:

1. I'm not arguing for or against either system.

2. The property tax quoted was a high of 0.7%, not 0.07%.

3. Norway has a phenomenal number of perks that are provided to its citizens - this was implied in the article. I am sure that there are many more that could be mentioned.

4. Interesting about the VAT - it's still an added cost though, and it's still 25% on most items.

5. I find the wealth tax to be the most interesting of the five listed here.

So, you squirrel away your money every year (after paying taxes on it) in your savings account, but still have to pay a "wealth tax" if you have over 80k in net assets?


Comment by John on September 15, 2009 @ 9:41 am

My daughter just returned from a 6 month study abroad program in Oslo, and we have family living there as well. One of the main differences in the taxation of citizens in Norway is that almost everyone pays fairly high taxes where statistics here show that more than 50% of Americans pay no income tax at all and that a large number actually receive more back in a tax refund than they ever paid in. It would be political suicide for either party to increase taxes to the point they are at in Norway or other countries that offer socialized health care and there aren't enough wealthy taxpayers to cover the burden so we end up with a huge deficit if we want to enact the same type of public services.


Comment by gg on September 26, 2009 @ 1:14 pm

I lived in Norway and I loved the healthcare I got, personally. I walked into a clinic with no appointment and was treated 40 minutes later, certainly no longer than I would have to wait here in the states. The doctor was nice and it cost me $20 because I was not a citizen.


Comment by emma on October 04, 2009 @ 9:35 pm

I'm doing a report on Norway, and this site was really helpful. thanks! could you maybe put more on the differences between their taxes and our taxes? like more compare/contrast.


Comment by Adam on October 15, 2009 @ 2:20 am

Norway has extremely low unemployment but they put people that are out of work are put on "sick" leave. This does not get counted as "unemployed." It is very easy to say you have back pain or mental problems to get on this "sick" leave. I have heard that 13% of the working population is on "sick" leave but very hard to find the facts.
New (cheap) car costs over $50,000, gas costs $8/gallon, and healthcare is ok but not as good as USA (if you have insurance.)
Norway will have a problem in the future with too many living on the almighty gov't. Besides the "sick" leave people getting $ from the gov't, they also get in immigrants in from Africa, middle east, that get a house, car, living expenses when they get here. Give it 20 years and I think policies will change.


Comment by Bobby Casey on January 26, 2010 @ 6:00 pm

I just returned from a trip to Norway and I was certainly surprised. $11 beer and $50 pizza! $5 one-way subway ride and $250,000 Porsche 911. And everyone I spoke to was disgusted with the very long wait times for healthcare. If you have a broken leg they will see you immediately, but need and MRI? See you in 6 months. If you are a high earner, your effective tax rate is about 50% and you will pay about $2500 per month for a 700 square foot apartment.


Comment by Norwegian on October 04, 2010 @ 4:19 am

A bit of a late comment here, but...You are not considering that Norway is what they call a high-tax, high deductions system. There are a large number of deductions available. Intrest on your morgage, having kids, kindergarden, etc, etc.

Numbers from the Norwegian IRS show that the actual tax paid by Norwegians are 9% -32 % total, after all the deductions. With a 25 % average.

Of course, the important thing about taxes is not how much you pay, but if you feel you are getting your moneys worth.


Comment by Tawm on November 06, 2010 @ 8:12 pm

In the US we have deduction systems too, it's called a tax write off. Being a fiscal conservative, the thing I like about Norway is that its income tax is a flat rate. However, what keeps it from truly being an awesome flat rate tax is all the VAT's and the sub-income taxes that go around. We need a flat tax in America, we could learn a lot from our Russian neighbors who saw a huge economic boom when Putin imposed a flat tax. Americans are strong and do not need their government micromanaging their lives, that's why we are more than welcome to leave America and live in places that'll wipe your ass for you like Norway. Norway, without a doubt, has too much taxes to really grow.


Comment by joe on December 21, 2010 @ 11:00 am

Norway sounds awful! That is a pretty ridiculous tax system. And, you cannot compare a country with 3 million people to the US with 330 million people and an immigration policy that is very, very relaxed (give us your tired, poor, huddled masses) whereas Norway's immigration policy seems to state "If you're tired, poor, or a huddled mass then stay the f--k out!"

The US isn't perfect, but i"ll take it.


Comment by Terry Helton on January 21, 2011 @ 7:27 pm

I for one don't mind paying tax as long as EVERYBODY ELSE PAYS AS WELL!!! Which in the US they don't don't. The rich don't pay much if anything and they still bitch while the middle class and working poor pay,pay, pay. It's fucked up. And what about a VAT? Do you actually thinik that if it is imposed that EVERYBODY will pay or just certain people?


Comment by Eric on April 17, 2011 @ 8:16 pm

Do I think what these countries have works for them? Yes. Do I think it would work in America? Probably not, not because of some of the reasons stated in others comments (Scandanavian countries have some of the easiest asslyum processes on the planet) However, our society is just alot more unequal that Scandanavia and we are much more tolerant of it. The upper middle class and upper classes in this country have a huge subisidy of low prices due to all of the people who work but making under a living wage (a.k.a. people recieving the Earned Income Tax Credit), which helps keep costs for consumer products down (although so does low business taxes, good infrastructure and the size of our market). Is a doctor or lawyer making $200,000 going to decide to become a bum just becuase his tax rate increased by 10%? No. Would he vote for a system that not only increased his taxes by 10% but also increased the wages of the working poor to levels similar to Norway and therefore contributing to higher prices for everything? Probably not, at least not if only voting for his self interest.


Comment by Alan on May 24, 2011 @ 12:27 pm

Norway is a massively oil rich nation - massive oil exporter - with a tiny population. You cannot use it as an example of how America might be - anymore than you could Suadi Arabia or Kuwait etc. Silly people.


Comment by Walter Ndjibu on June 26, 2011 @ 8:23 am

The only and most important thing people in any country want is a certain level of improvement in their daily lives. Norway it is true has if I am not mistaken the highest tax cost in the world. But if this system as managed by the government has led to the kind of high standard of living we know in Norway and the remarkable per capita income and purchasing power parity then it is good. The purpose of any economy is to reduce scarcity by identifying effective ways of generating more income and allocate it in a way that it improves human lives. Norway is an example to follow. What is the point of sparing citizens with more taxes while their lives continue to deteriorate?


Comment by Walter Ndjibu on December 19, 2011 @ 10:20 am

the great take away of what you have exposed abovei is that the capitalist philosophy according to which government must be out of the market operation to promote growth and prosperity is inaccurate. Nowergian gov. is almost as you said in major business activites in the country. As Norwegian premier said last time he was on Pierce Morgan show, rich in norway pay almost 5o% of their share to the nation. The result is highly positive. The huge amount of revenues acquired by the Norwegian gov. through taxes enable it to build a glorious enviable life for its citizens. Healthcare is universal, school is free, the country is among the richest in the world and always among the top five on the UNDP indexes. Lower tax or higher tax does not mean economic growth or prosperity. It depends on the characteristics of the country socially and economically. Lower tax means low revenue for the gov. and therefore limited resources to fund public or social programs. In a country like US where the cost of health care is astronomical, those who want lower taxes are self-inflicting a terrible blow. We are wrong and should get rid of our Omniscience syndrom in order to learn from others


Comment by Sapphires - A London Modelling Agency on January 26, 2012 @ 3:55 pm

Very interesting that there's no low income tax bracket... I wonder how the working class of Norway feel about that??


Comment by Jenny on April 03, 2012 @ 3:20 pm

I am a Canadian who has been living in Norway for the past 4 years. It has been a strange and difficult thing to wrap my head around the cost of living here. It is a beautiful, safe and clean place to live ( as Canada was ) but knowing what I pay for things in Canada, the sheer worth of things seems skewed. Yes they make almost 2x in wages than in Canada, but they pay 2-4x as much for housing, groceries, cars, movies, clothing etc. so I think it evens out in some way. I cannot bring myself to pay $12 for a Big Mac because I see its worth as $2. A pint of beer for $16 when I know I could get it in Canada for $4. But if you make 8/hour and a beer is $4 or you make $23/hour and a beer is $16, its pretty much the same thing.
There are many perks here - free child care, school, 9 weeks paid vacation… and a very relaxed way of life.
Housing is insane, you need $1million to buy an average, 30 year old home in an ok part of Oslo, 1.5million for anything I grew up in ( nothing fancy ). But they seem to manage, priorities are different and lifestyle/goals are relaxed. Kids and family are priority, and the gov. welfare reflects that.
All in all I would take Canada any day, but its what your used to I guess.


Comment by iain on July 06, 2012 @ 10:40 am

i live in norway personally. Norway has the most oil per capita in the world and thats the only reason everyone gets healthcare. USA could never bear that burden. The government here is bloated way beyond what it should be. Flat tax is 34% btw. thats what i pay and thats what everyone i know pay. and we are NOT rich. put all the taxes together (sales, propery. etc) you pay about 67% of your income. if you make over a million crowns a year you pay a whopping 84% of your income. No point being rich. there s no incentive. its a stagnant system that has its days numbered by our oil capacity and we get more complacent each day. I love my country but i dont like where its going


Comment by Ian on September 06, 2012 @ 3:02 pm

I'm British and currently work in Norway. The prices are eye-watering for just about anything, foodstuffs are probably priced at 200% and up of what they are in Britain and they earn roughly 33 to 50% more than the British so, as you can see their standard of living is actually lower than ours. If you drink then be prepared to be be robbed, a pint of beer can be as much as £10 and vices will be priced as highly as possible. My opinion, for what it's worth, is that Norway is certainly no shining example of wealth and how a state should run it's own affairs.


Comment by Sanity on September 23, 2012 @ 11:49 am

Norway is doomed, oil to start to run out in 2025, bloated government and welfare system, immigrant population increasing, no incentive to produce. This is the product of the Jante law mentality......


Comment by Norweigan on October 05, 2012 @ 11:58 am

For people who only look at the tax system. norway have a ridiculous high average wages.

A bus drivers average wage is $60.000 a year
Beginner salary for a master student in economics is $75.000 a year.

Yes we pay high taxes in Norway, but the perks i get as a student:

- "Free education". Public universities tuition is maximum $500 each year
- Free health care
- Grant to go to school. Receive $1000 each year for being a fulltime student. 40% counts as scholarship, while 60% is loan (interestrate 1,2% each year after ended education)
- Free dental care until 18 year

- 1-2 year full paid during maturnity and faternity
- Fully paid sick leaves

It's nice to live in Norway

Norwegian exhangestudent in the US (By the way, i dont need hehalt insurance in the US, my norwegian insurance covers it)


Comment by Reality check on November 23, 2012 @ 6:06 pm

Norway sucks,tax you to death and god forbid that you have to see a medical specialist,not the rookie doctor at th er.Good luck 6 mnths atleast and than if they have to operate you maube a year or more waiting list again.Moving from US to here has been like moving from town center to a small village.Food is 300% more expensive from the US.In US i had always saving in the bank,here already 6 years i cant save a dime.Here we even pay a TV tax,they come and knok on your door to pay it.And if you called the police that you need them,they gonna tell you that they dont have resoursess,so they are not comming.Awfful place. US is not perfect either but this thing here is unberabale.


Comment by kay on January 01, 2013 @ 6:54 pm

interesting comments/perspectives. I'm a medical doctor (GP) & I'm considering moving to Norway with my family. seems isn't a great decision after all :)


Comment by Angela on January 03, 2013 @ 8:14 pm

Lived in Norway for several years, Not perfect but much better than in the US. Cost of living higher in some areas and lower in some areas. Funny I found housing to be almost exactly the same I sold a 2200 sq foot house in Riverside California for almost to the dollar what I bought a 2140 sq foot house for in Asker, a suburb of Oslo. However it was better built, much better insulated and cost of heating much less. Gas more expensive but distances are shorter, overall worked out just about the same, food more expensive but not unbearably so I didn't find it much different than the UK I guess it depends on what you buy. I found medical care there fantastic, much more responsive then in the US. ( Got an MRI in 2 days after the doctor recommended it and then an operation 4 days later) There is a reason why Norwegians live longer. Bedside manner depends on the doctor not the system and my doctor was great. Difficult things, had to get used to the very short winter days and the very long summer days. The entire country is very family friendly, massive support for children who are amazingly independedent. IT is a safe, very safe country with an incredibly low crime rate, you can literally walk anywhere in the country day or night and be safe. People are friendly.


Comment by Lewis on January 16, 2013 @ 8:13 pm

All the arguing over 25% here and .7% there and having to wait for health care or costs being very expensive for foreigners obscures the real truth. Go to most of Northern Europe and what do you see? Excellent public facilties, parks, highways, airports, trains, great public transit in general, well kept homes, educated people, a very high quality of life and virtually no blatant poverty. On the other hand, drive around the US and you find abysmal conditions all over: poor roads, antiquated public facilities, transit and airports. People in general do not look healthy and poverty seems to be around every corner in many cities and rural areas. Who has the better system?


Comment by Peter on January 30, 2013 @ 5:51 am

Hi everyone.If i have a 45000 gross per month what will be the net salary.Thanks.


Comment by Mats on February 06, 2013 @ 5:44 am


Your comment has reached Norway now - I myself am norwegian.
The biggest flaw with your comments are the fact that you focus on the percentage of tax - this has nothing to say in the big picture. What you should look at is what you can buy with the money you have left AFTER paying tax, and in a comparison perspective, you'd have to subtract, from the american "wallet" anything you use to gain the same perks as we have included in our taxes.
This is the only way to compare US to Norway - what you have left in your wallet after you subtract tax, and in your case all our perks. You can i.e use the "Big mac"-index which has become a good index to compare. I.e how many big macs can you buy in the US vs how many I can buy in Norway with what is left in my pocket.

You will most likely see that in average a norwegian would be able to buy more big macs in norway, the an average american could in the US - hence our system beats yours.


Comment by Norse Canadian on March 20, 2013 @ 7:37 pm

Lived in Norway for about 6 years now, came to see the country I was born in and bought a return ticket for a six month visit. Still here, came with 2 suitcases, little cash and poor language skills. I have no education past high school and work a blue collar job. I now own a house, apartment, cabin, car, motorcycle and I just paid more in taxes this year than I made annually in Canada and all it took was a good work ethic and maybe a few good investments. True we are taxed highly and the duties on luxury items are steep but our wages get us well past the neccessities and a ways into luxury. With 5 weeks paid vacation, full wages for; matenity leave(9 mos), paternity leave(10 wks), sick leave from day 1(28 days per calendar year, 365 days if validated by a doctor)..perhaps this is why Norway with its high life expectancy and free health care is one of the "sickest" countries in the developed world and has one of the highest mental illness rate in Europe. Hmmm, tummy hurts today-stay home and get paid or go to work and get paid? Feeling a little down Doctor, think I need a few weeks off :) Norwegians are the most traveled people in Europe and with 5 weeks paid vacation and it being cheaper to live on a resort than it is to dine out in Norway I can understand why. Not a lot of complaints, but some things could be better.


Comment by Canadian on March 27, 2013 @ 6:00 am

Here's the long story short from a Canadian living and working in Norway.
Norway is a great place to live, lots of good paying jobs, safe, secure, relaxed mentally and many social benifits. They put family first here not money. They are not greedy chasing the dollar like all of us in North America!
Now, that being said, you for sure pay for it in high taxes and prices. You have to change your way of thinking if you want to live here. Don't think about getting rich or getting ahead financially, the system doesn't let you. You and your family can live a comfortable safe happy life here. Also you can't compare prices here to there, compare standards of living and at the end of the day with EVERYTHING considered, I'm starting my family in Norway!


Comment by Kiwi on April 04, 2013 @ 4:05 pm

The Norwegian Tax system is very much geared towards the Employee.The Employeer must pay 14% on top of Employees wages to the government,thats the privilage we have for lowering the Unemployment statistics.So realistically the Tax rate is 42-50%.

Norwegians take great pride in their Oil reserves and way of life,both are finite.


Comment by Anthony on September 22, 2014 @ 10:21 am

LIVING IN NORWAY MYSELF I can add the following to this discussion. The fact that there is social system in place makes people more conscious on the importance of their participation. Cheating the social security system is just considered to be social blasphemy. Americans seem to be scared of paying tax, and judging on your comments is considered to be more of a waste. This is just not the case in Norway. Nobody calculates in price-before-taxes. Not even the wage is expressed in before-tax. The tax is simply something you do not think about, since it is a fee which people are VERY willing to pay for a functional social system. Knowing that the money is used to keep a great system up and running makes me relieved and realize that I live in a great country. I dont have to worry about losing my job, because people know I will do everything I can to get a new job as soon as possible. Also I am very happy that IF i lose my job and I get cancer in that period, I will get a proper treatment. Corruption is low, unemployment is low and happiness is high. I wish the best for all my countrymen. And I am happy that we are willing to work together on making each other feel safe. A person feeling safe through community inputs becomes less selfish and participates in society. I wish the same for the US of A.... I really do.


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