Comparing Tax Rates in the U.S. and Norway

We compare the income tax paid by an entrepreneur in Norway with what an American counterpart would have paid.

By Inc. staff |  Jan 20, 2011

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So, how much higher are taxes in Norway? We looked at Davor Sutija's 2009 income tax return—available, like all tax returns in Norway, on the Internet—and calculated a rough estimate for what he would have paid if he lived in the U.S. The CEO of Oslo-based Thinfilm isn't rich enough to be touched by Norway's 1.1 percent wealth tax, but he still paid far more in taxes in Norway than he would have in America, even if he lived in a high-tax state like Massachusetts. Leonard Levine, a C.P.A. in Boca Raton, Florida, and Martin Wikborg, a tax attorney in Ernst & Young's Oslo office, helped us with the calculations.

	Oslo	Massachusetts	Florida
Gross salary	$537,000	$537,000	$537,000
Income after deductions	$501,000	$516,000 for state tax $453,000 for federal tax	$479,000
Payroll taxes	National insurance, employee contribution, 7.8% of gross: $42,000	Social Security (6.2% of first $106,800): $6,600; Medicare (1.45%): $7,800
Income tax	Income tax (28% flat rate): $140,000 Surtax (9% on income above $76,000; 12% on income above $124,000): $54,000	Federal income tax (progressive, up to 35%): $136,000 State tax (5.3% flat rate): $27,000	$138,000 No state tax
Total income tax bill	$236,000	$177,000	$152,000
Effective income tax rate	43.9%	33%	28.3%

Comparing Labor Costs in Norway and New York

The cost of having an employee on the payroll in socialist Norway is not as bad as you may think.

By Inc. staff |  Jan 20, 2011

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The high value of the kroner makes Norway very expensive for foreigners. (A beer in Oslo can cost $15.) But employing people, especially skilled workers, is surprisingly inexpensive. Here's what one Norwegian tech company, Oslo-based bMenu, pays each year to employ software developers in Norway and the United States.

	Oslo		New York City
Salary	$100,000		$100,000
Payroll taxes	National insurance contribution, 14.1% of total salary*	$14,100	Social Security (6.2% of first $106,800)	$6,200
			Medicare, 1.45% of salary	$1,450
			Federal unemployment	$56
			State unemployment	$349
			City transit tax	$340
Retirement plan	Supplemental retirement plan	$2,100	401(k), 6% match	$6,000
Private insurance	Accident and travel insurance	$403	Workers' compensation	$503
			Disability	$56
			Health insurance, 80% employer contribution	$7,536 (single) $23,360 (family)
Total salary	$116,603		$122,490 (single)	$138,314 (family)
Cost of benefits	16.6%		22.5% (single) 38.3% (family)