What do Norwegian workers spend their wages on?

What do Norwegian workers spend their wages on

According to Statistics Norway (SSB), the average gross salary in Norway is NOK 48,750 per month or NOK 585,000 per year. For elementary professions, the monthly average is NOK 34,640, while general managers and general managers earn NOK 83,030 before tax.

Norway operates with progressive taxes, which means lower tax rates are imposed on low-income workers than on high-income ones. For most full-time employees, the tax rate will be between 23 and 33 percent.

For example, a person earning NOK 48,750 per month can expect to pay around 27% tax, which translates into a net monthly income of NOK 36,250.

These figures place Norway among the top 10 countries with the highest monthly net income.

Cost of life

While income levels can be high, so too is the cost of living. According to Business Insider, Norway is the 3rd most expensive country in the world in which to live.

But what exactly are the expected expenses for a person living in Norway? Let’s break it down by looking at both core costs and average consumer spending.

Core costs

First, let’s look at the absolute essential costs like housing, food, basic utilities, and transportation. In this section, we must also include the minimum loan payments.

According to SSB statistics, Norwegians spend 22% of their net monthly income on housing, 15% on transport, 11% on food and non-alcoholic drinks and 3% on health care expenses. Together, this represents 51 percent of total income.

Consumer Research Norway (SIFO) further breaks down some of these costs in its benchmark budget for consumer spending. For example, they estimate that a person between the ages of 31 and 50 will spend between NOK 3,100 and 3,660 per month on food and drink, around NOK 880 on personal health and NOK 310 on other groceries. .

According to the financial institution Lån for deg, people living in Norway owe a total of NOK 143.4 billion in unsecured debt, which includes consumer loans and credit card debt. Based on these figures, it can be estimated that the average Norwegian spends between 5 and 10% of his total net salary to pay off his unsecured debt.

For those with children there is an additional monthly charge to consider. According to SIFO’s calculations, a middle-income couple would pay NOK 3,230 for a kindergarten place and NOK 3,212 for a 100% extracurricular place. Covering the costs of these services for two children would represent about 9% of their total net income.

Given these numbers, it’s fair to assume that people living in Norway spend an average of 60-70% of their income on essentials.

Consumer spending

According to the SSB report, there has been a huge increase in consumer spending in Norway in recent years. By adjusting face values ​​to actual values, we spent up to 64% more on consumption in 2017 than in 2000. Consumer spending refers to non-essential spending.

Statistics show that we spend on average 11% of our income on cultural and leisure activities, 9% on trips and trips abroad and 5% on clothing and footwear.

Budget breakdown

Let’s break it all down into a budget of hard numbers.

The calculations are based on a person living alone with an average net salary of NOK 36,250.

Basic costs: NOK 21,734 (60%)

Accommodation (rent / mortgage repayment): NOK 7,975 Transport: NOK 5,438 Food, drinks and other groceries: NOK 3,970 Health: NOK 1,088 Repayment of unsecured debt: NOK 3,263 (9%)

Consumption expenditure: NOK 9,064 (25%)

Culture and leisure: NOK 3,988 Travel and stays abroad: NOK 3,263 Clothing and footwear: NOK 1,813 Other: NOK 5,452 (15%)

In this example, our reference person ends up with 15 percent of take-home pay after covering basic costs and consumer expenses. This means that it would be possible to put money aside each month to save, for example, by creating a buffer for unforeseen expenses.

Of course, our individual realities are rarely average, and the budget allocation will be different in each household, depending on our level of income, our living situation and our standard of living.

Conclusion

Our budget breakdown of an average Norwegian salary reveals that around 60-70% is spent on basic costs, 25% is spent on consumption, and between 5 and 15% is left for savings or other projects.

Overall, it’s fair to say that in one of the most expensive countries in the world, the average income and cost of living are, thankfully, rather commensurate.

Ingvild Aagre is a web editor at the financial institution lanfordeg.no and has seven years of experience in teaching, professional counseling and text production. She holds a master’s degree in anthropology with a specialization in economic anthropology from the University of Bergen. She also studied history, language and sociology at other universities in Norway and abroad. For a full biography, please visit his webpage.

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