How much money do you need to earn to be in Norway's top tax bracket?
Many consider the taxes in Norway to be high. Both a universal and progressive system are used to tax workers. Those in the highest tax brackets can potentially be hit with additional taxes, too.
Scandinavia has a reputation for its high taxes. The high taxes, among other things, help fund the welfare state and social safety net in these countries.
Norway's taxes are actually lower than its neighbours, Sweden and Denmark. In Sweden, there is a municipal tax rate of between 32 and 35 percent, with the highest earners paying up to an additional 20 percent.
Meanwhile, Denmark is one of the highest taxers in the world, with salaries being taxed at a rate of 45.1 percent.
READ ALSO: Does Norway really have some of the highest taxes in the world?
Norway has a two-step income tax system. The first part is a universal tax rate of 22 percent. In almost all cases, this is what the majority would pay on their taxes as a baseline.
The second step to income tax in Norway is bracket tax. The bracket tax is progressive, meaning the more you earn, the more you pay.
The bracket tax is relatively low for those on lower wages. Personal income between 198,350 kroner and 279,149 kroner is subject to a bracket tax of 1.7 percent. Those who earn between 279,150 kroner and 642,949 kroner pay a bracket tax of 4 percent.
However, those who earn above what is, roughly, the average wage in Norway begin to pay significantly more.
Residents who make between 642,950 kroner and 926,799 pay 13.5 percent. Taxpayers with a take home of 926,800 and 1,499,999 kroner pay a bracket tax rate of 16.5 percent. Meanwhile, those who take home more than 1.5 million kroner annually pay a 17.5 percent bracket tax.
Personal income also covers more than just salary. Income can come from interest earned on savings, dividends from investments and money made from renting out property, even in other countries.
In taxes alone, the highest earners in Norway, therefore, pay around 39.5 per cent income tax. They will also be subject to national insurance contributions. This typically amounts to 7.9 percent, but can be higher in some cases.
Therefore, the highest earners in Norway can expect to have around 47.5 percent of their pay packet deducted in taxes and national insurance contributions. The top tax of 1.5 million kroner would put one close to the top 1 percent of earners in Norway.
Figures the national data agency Statistics Norway have previously given The Local show that in 2021 (the year when the latest set of figures are available) the top one percent had an income of at least 1.8 million kroner.
Those in the highest tax bracket in Norway may be subject to wealth tax, too, depending on factors such as assets and savings.
Taxpayers in Norway need to pay both municipal wealth tax and state wealth tax.
The municipal wealth tax rate in the country amounts to 0.7 percent, and it is calculated based on your assets exceeding a net capital tax basis of 1.7 million kroner for single or unmarried taxpayers and 3.4 million kroner for married couples in Norway.
The state wealth tax is between 0.4 and 0.4 of one's net wealth. The maximum wealth tax in Norway can reach 1.1 percent.
The wealth tax is calculated on the basis of the total value of one's assets minus any debts or liabilities. So, for example, someone who is mortgage-free may be liable for wealth tax, even when property is only calculated at 25 percent of its market value.
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Scandinavia has a reputation for its high taxes. The high taxes, among other things, help fund the welfare state and social safety net in these countries.
Norway's taxes are actually lower than its neighbours, Sweden and Denmark. In Sweden, there is a municipal tax rate of between 32 and 35 percent, with the highest earners paying up to an additional 20 percent.
Meanwhile, Denmark is one of the highest taxers in the world, with salaries being taxed at a rate of 45.1 percent.
READ ALSO: Does Norway really have some of the highest taxes in the world?
Norway has a two-step income tax system. The first part is a universal tax rate of 22 percent. In almost all cases, this is what the majority would pay on their taxes as a baseline.
The second step to income tax in Norway is bracket tax. The bracket tax is progressive, meaning the more you earn, the more you pay.
The bracket tax is relatively low for those on lower wages. Personal income between 198,350 kroner and 279,149 kroner is subject to a bracket tax of 1.7 percent. Those who earn between 279,150 kroner and 642,949 kroner pay a bracket tax of 4 percent.
However, those who earn above what is, roughly, the average wage in Norway begin to pay significantly more.
Residents who make between 642,950 kroner and 926,799 pay 13.5 percent. Taxpayers with a take home of 926,800 and 1,499,999 kroner pay a bracket tax rate of 16.5 percent. Meanwhile, those who take home more than 1.5 million kroner annually pay a 17.5 percent bracket tax.
Personal income also covers more than just salary. Income can come from interest earned on savings, dividends from investments and money made from renting out property, even in other countries.
In taxes alone, the highest earners in Norway, therefore, pay around 39.5 per cent income tax. They will also be subject to national insurance contributions. This typically amounts to 7.9 percent, but can be higher in some cases.
Therefore, the highest earners in Norway can expect to have around 47.5 percent of their pay packet deducted in taxes and national insurance contributions. The top tax of 1.5 million kroner would put one close to the top 1 percent of earners in Norway.
Figures the national data agency Statistics Norway have previously given The Local show that in 2021 (the year when the latest set of figures are available) the top one percent had an income of at least 1.8 million kroner.
Those in the highest tax bracket in Norway may be subject to wealth tax, too, depending on factors such as assets and savings.
Taxpayers in Norway need to pay both municipal wealth tax and state wealth tax.
The municipal wealth tax rate in the country amounts to 0.7 percent, and it is calculated based on your assets exceeding a net capital tax basis of 1.7 million kroner for single or unmarried taxpayers and 3.4 million kroner for married couples in Norway.
The state wealth tax is between 0.4 and 0.4 of one's net wealth. The maximum wealth tax in Norway can reach 1.1 percent.
The wealth tax is calculated on the basis of the total value of one's assets minus any debts or liabilities. So, for example, someone who is mortgage-free may be liable for wealth tax, even when property is only calculated at 25 percent of its market value.
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