How much money do you need to earn for a good life in Norway?
From day-to-day expenses such as food to monthly costs such as accommodation, life in Norway doesn't come cheap. So, how much do you need to earn for a good life in Norway?
There is no need to beat around the bush, Norway is among the most expensive countries in Europe. However, the high prices are offset, to an extent, by the generally high salaries in the country.
So, it would be fair to say that Norway is – as a rule of thumb – very expensive to visit, but when one takes into account that the country also has pretty high salaries (at least compared to most of Europe), it may end up being the case that Norway is not as expensive for people living and working in the country.
In this article, we will look at some of the key factors that affect the quality of life one has in Norway, including earnings, living costs, and regional (and local) cost differences.
We'll start by looking at the earnings in Norway.
Earnings in Norway
According to Statistics Norway (SSB), the average monthly earnings in Norway amount to 48,750 kroner before taxes.
As some experts claim that the median monthly earnings are a better measure of earnings than average earnings, it's also worth noting that the median monthly earnings in Norway amount to roughly 44,150 kroner before taxes.
That means that 50 percent of workers in Norway earn less, and 50 percent earn more.
Furthermore, international media often describe Norwegians as "rich" compared to workers in other countries based on their disposable income alone.
In 2018, the BBC pointed out that Norwegians in their early 30s have an average annual disposable household income of around 460,000 kroner, which amounted to "a 13 percent rise in disposable household income in real terms compared to Generation X when they were the same age."
At the same time, young people in the US experienced a five percent dip in disposable income, their peers in Germany saw a decrease of nine percent, and young people in southern Europe saw their disposable incomes plummet by as much as 30 percent.
The data used was taken from the Luxembourg Income Database, the most significant comparative wealth data set around.
The most recent available figures on disposable income in Norway are the ones from 2020 and are available here.
Regional and local differences
There are significant differences in the cost of living and job opportunities between different regions and cities in Norway.
Living costs in Norway's major cities, such as Oslo, Bergen, and Stavanger, are usually higher than in the smaller cities. This is particularly true when it comes to housing – especially rent.
Therefore, it's a good thing to remember that you might save a lot of money if you're ready to settle down in a smaller Norwegian city – or if you don't mind living in the suburbs of a larger one.
Here is an overview of the October 2022 rent prices in some of Norway's biggest cities, according to the Utleiemegleren rental agency:
- Oslo: On average, a 1-room apartment in Oslo cost 11,030 kroner in October, an increase of 0.6 percent from September. Compared to the same month last year, the rent price increased by 9.6 percent. A 2-room apartment cost an average of 14,791 kroner in October, an increase of 0.2 percent from the previous month. Compared to October last year, the rental price for 2-bedroom apartments increased by a whopping 9.4 percent. The average price for a 3-room apartment in Oslo in October amounted to 18,755 kroner.
- Bergen: A 3-room apartment in Bergen cost an average of 13,795 kroner in October. Compared to the same month in 2021, the price increased by 4.8 percent.
- Stavanger: In Stavanger, the average price for a 2-room apartment was 11,139 kroner this year, which is 6.3 percent higher than last year's average (10,481 kroner).
- Trondheim: In Trondheim, a 2-bedroom apartment cost 12,100 kroner on average in October. Compared to September, that is an increase of 1.7 percent. The rental price increased by as much as 5.7 percent compared to the same month last year.
Costs of life in Norway
If we take the aforementioned average monthly gross earnings in Norway – 48,750 kroner – and apply an expected tax rate of roughly 27 percent, the resulting net monthly income would be 36,250 kroner.
In a calculation of living expenses in Norway prepared by Ingvild Aagre at the financial institution lanfordeg.no in March of 2022, based on a person living alone with an average net salary of 36,250 kroner, a monthly budget breakdown would look as follows:
Essential costs: 21,734 kroner (60 percent)
- Housing (rent/mortgage repayment): 7,975 kroner
- Transportation: 5,438 kroner
- Food, beverages and other groceries: 3,970 kroner
- Health: 1,088 kroner
- Unsecured debt repayment: 3,263 kroner (9 percent)
Consumption expenditure: 9,064 kroner (25 percent)
- Culture and leisure activities: 3,988 kroner
- Travels and stays abroad: 3,263 kroner
- Clothes and shoes: 1,813 kroner
- Other: 5,452 kroner (15 percent)
Based on the example above, a person with an average net salary of 36,250 kroner would use about 60-70 percent of their salary on essential living costs, 25 percent would go towards consumption, and between 5 and 15 percent would be left for savings or other wants or needs.
After looking at the figures, Aagre noted that the example shows that, even in a country as expensive as Norway, the average income and the costs of living are quite proportionate.
In conclusion, generally speaking, it seems that the average monthly earnings of 48,750 kroner (before taxes) are enough for people to lead a good life in Norway.
The average earnings enable them to cover all their essential and consumption costs and still have a part of their paycheck available to put into savings or spend on other items.
Overall, the earning levels in Norway indicate that Norwegian workers generally have higher earnings than their peers in other European countries, meaning that they have more money to bear the higher costs of living.
Aagre summarised it by making the following assertion: "In one of the most expensive countries in the world, the average income and the costs of living are, thankfully, rather proportionate."