The average Norwegian employee costs 85,000 USD
An average Norwegian employee costs his employer well over 50 USD an hour, when all costs are taken into account.
New figures from Statistics Norway now show us the average price of having a person employed full-time for one year – a ‘year's work’.
The average annual salary in Norway in 2021 was almost 61,000 USD before tax.
More than 60 per cent of workers in Norway earn less than this, but it is the few with much higher salaries that drive up the average.
The median salary is probably a better measurement, because it is not affected by those with the highest salaries in the same way.
The median salary is the salary that falls in the ‘middle’ of all salaries.
In 2021, the median salary was approximately 55,000 USD before tax, according to Statistics Norway (link in Norwegian).
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Costs more than salary alone
What a year’s work costs is important to anyone who is going to employ people.
According to Statistics Norway, a full-time employee in 2021 cost an average of around 85,000 USD. This figure includes more expenses than just the employee’s salary.
In 2021, direct personnel costs were 67,000 USD on average. In addition to salary, this includes such things as holiday pay and sick pay.
Indirect personnel costs
In 2021, indirect personnel costs amounted to an average of just over 17,000 USD.
This is a collective term for all other expenses the employer has for each employee. These include contributions to pension schemes, employer's tax, and training expenses.
Here are the average amounts for indirect personnel costs linked to each employee in 2021:
- Employer’s social contributions – 7,000 USD. These are expenses for things like pension schemes and insurance for the employee.
- Taxes deducted subsidies – 9,100 USD. This is a tax that the employer must pay. It is usually 14.1 per cent of the employee's salary. Taxes deducted subsidies are used by the state to finance the Norwegian Labour and Welfare Administration’s (NAV’s) services and benefits such as public pensions, public sickness benefits (paid from the 17th sick day) and unemployment benefits.
- Training costs – 1,100 USD. Participation in courses and training of new employees.
- Salaries in kind – 1,800 USD. These are benefits the employee receives outside of wages. It could be anything from a Christmas party and a subsidised canteen. Some call this fringe benefits.
Over 50 USD per hour
When all costs are considered, an average Norwegian employee now costs his employer well over 50 USD an hour.
For an employer who wants to calculate how much an employee will cost for one year, a rule of thumb is to take the gross annual salary and add between 20 and 30 per cent.
If you are currently working and wonder what the average monthly salary is in your profession, you can find the figures from Statistics Norway here.
It is important to remember that the median salary is perhaps the most appropriate figure to compare with. Seniority can also mean quite a lot for the salary you receive.
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Translated by Alette Bjordal Gjellesvik.
Read the Norwegian version of this article on forskning.no
References:
Statistics Norway: Labour costs, December 2022.
Altinn: What does an employee cost?, October 2021.
