Prosperity Starts Here: A Budget Blueprint for Your Financial Freedom

In the recent proposal for the state budget for 2025, the government makes several moves that can have a direct impact on the wallets of most people.

In the budget, the government estimates that prices will increase by 3 per cent next year. At the same time, it is estimated that Norwegian wages will increase by 4.5 per cent on average.

If this works, Norwegians will get real wage growth and, on average, more to deal with.

Tax measures

When it comes to income tax, the government is making moves to redistribute. Everyone who earns less than NOK 1 million will get lower taxes with the government’s proposal.

The biggest cut comes for those who earn between NOK 100,000 and NOK 200,000 (-NOK 2,200 in tax next year) and those who earn between NOK 200,000 and 250,000 (-NOK 1,200 in tax).

Those who earn between NOK 250,000 and NOK one million get a tax cut of between NOK 200 and NOK 400.

Those who earn over NOK 1 million will have their tax increased by between NOK 400 and 600.

Cheaper electricity

Electricity prices next year will be lower than in recent years, the government estimates. At the same time, the electricity support scheme is extended. However, it is adjusted in line with price growth so that it kicks in when the electricity price exceeds 75 øre per kilowatt hour from 1 January, compared to 73 øre today.

For consumption of up to 5,000 kilowatt hours per month, the state covers 90 per cent of the electricity price above this level.

Due to the estimate of lower electricity prices, the government is only setting aside NOK 4.8 billion for the scheme next year. In comparison, the state paid out NOK 26.4 billion in electricity subsidies to households in 2022 and NOK 16.4 billion in 2023. In last year’s state budget, the government set aside NOK 9.75 billion for electricity subsidies.

Fee changes

Petrol taxes will increase by a total of 7 øre next year, in the proposed budget. However, this is an increase of 0.95 per cent, which is therefore lower than the price increase. This means that petrol taxes will be relatively lower next year.

At the same time, the government is cutting another tax for car owners, namely the tax on traffic insurance for cars and vans.

It goes down by NOK 1.22 per day, which means a fee cut of NOK 445 during the year.

Air passenger tax will also be cut next year, which will mean cheaper flights. The air passenger tax is divided into two parts, and it is the so-called “low rate” that is proposed to be reduced in the proposal for the state budget for next year.

The low rate applies to all journeys to places in Norway or Europe, and is currently NOK 85 per passenger. Next year, the government proposes to reduce it to NOK 60.

Several other taxes are likely to increase in line with the 3 percent increase in prices. This applies, among other things, to taxes on alcohol, tobacco and sugar.

The free card limit is increased

Another move will affect water and sewer charges.

Many municipalities have announced that these will increase next year, but to ease this, the VAT on water and sewage will be cut from 25 to 15 per cent next year. This became known in advance, through a budget leak in VG.

Next year, the government will also spend NOK 515 million on adjusting the free card limit from NOK 70,000 to NOK 100,000. This means that you can earn up to NOK 100,000 without paying tax.

The commuter allowance is increased

Here are some other moves that affect your wallet:

* Store employees will be allowed to shop more from their own workplace without having to pay tax for it. According to the finance minister, the government proposes to increase the limit for staff discounts – from today’s NOK 8,000 to NOK 10,000 in 2025.

* The maximum deduction for the trade union quota in 2025 will be NOK 8,250 – an increase of NOK 250 from 2024.

* The commuter deduction is increased, the basic deduction goes up by NOK 300 to NOK 15,250. The upper limit is increased from NOK 97,000 to NOK 100,880, and the mileage rate is increased from NOK 1.76 to NOK 1.83.

* The government has also announced that the residents of the country’s 212 least central municipalities will have their student loans canceled with NOK 25,000 a year from January 2026. In Finnmark and Nord-Troms, which already have such a scheme in place, the rate for debt cancellation will be doubled from NOK 30,000 to NOK 60,000 a year. Altogether, this will cost around NOK 1.3 billion.