Norway 2025 Budget

Total Revenues

2,250

Billion NOK

Total Expenditures

2,020.8

Billion NOK

Non-oil Deficit

413.6

Billion NOK · covered by the oil fund

Petroleum Revenue

672.4

Billion NOK

Budget Overview: Revenue & Expenditure Composition

Revenues — largest first

Petroleum Revenues (672.4B)

Employer & NI Contributions (466.7B)

Income & Wealth Tax (435.2B)

Value Added Tax (409.3B)

Other Revenues (154.3B)

Excise Duties (112.1B)

Expenditures — largest first

National Insurance / Folketrygden (701.9B)

Other Services & Programs (616.4B)

Local Grants + Health Trusts (466.8B)

Defense (110.0B)

Transport / Samferdsel (96.1B)

Petroleum Expenditure (29.6B)

Key Finding (official Table 2.1): Outside the petroleum sector, the state plans to spend 1,991.2 billion NOK and collect 1,577.6 billion — a non-oil deficit of 413.6 billion, covered by a transfer from the Government Pension Fund Global (SPU). All net petroleum cash flow (642.8 billion) goes into the fund first, which is why the headline totals (2,250.0 revenue vs 2,020.8 spending) show an overall surplus of 229.1 billion: that is simply the part of the oil money that stays in the fund. The structural oil-corrected deficit is estimated at 460.1 billion NOK (2.5 % of estimated SPU capital ≈ 18,500 B NOK). The fiscal rule targets spending roughly 3 % of the fund’s value over time.

Revenue Sources Overview

Petroleum Revenues (30%)

Non-petroleum Revenues (70%)

Revenue Categories (Largest First) — Click to Expand

Petroleum Revenues ▼

672.4 billion NOK

Oil and gas revenues from Norwegian Continental Shelf operations. Percentage of total: 29.9%

Overview: All petroleum revenues are transferred to the Government Pension Fund Global (Statens pensjonsfond utland – SPU), commonly known as the Oil Fund. The fund manages long-term wealth for future generations, with only approximately 3% spent annually according to the Oil Fund rule. Net cash flow from petroleum activity is estimated at 642.8 billion NOK in 2025.

Taxes on petroleum activity 389.0 billion NOK 58%

State's Direct Financial Interest (SDØE), net 255.8 billion NOK 38%

Dividend from Equinor 27.8 billion NOK 4%

Split as recorded for the adopted 2025 budget (Prop. 1 S 2025–2026); these sum to 672.6, against 672.4 in the proposal. Norway no longer levies royalties on oil and gas production.

Key Facts: Norway is one of the world’s largest natural gas exporters and a major oil exporter. Major fields include Ekofisk, Statfjord, Troll and Johan Sverdrup. The Oil Fund is the world’s largest sovereign wealth fund (capital ≈ 18,500 B NOK at start of 2025). Official petroleum revenue figure from Table 2.1: 672.4 B (down from 858.2 B in 2024 estimate).

Employer & Employee Contributions ▼

466.7 billion NOK

Social security contributions (arbeidsgiveravgift + trygdeavgift) funding the National Insurance Scheme (official). Percentage of total: 20.7%

Purpose: These contributions fund old-age pensions, disability benefits, sickness benefits, parental leave and unemployment insurance. Employers and employees both contribute based on wages/income. Official figure from Table 2.2.

Employer contribution (arbeidsgiveravgift), standard zone 14.1% of wages

Employer contribution, rural zones 0–10.6% of wages

Employee contribution (trygdeavgift) on wages 7.7%

Self-employed contribution on business income 10.9%

The budget tables publish only the combined total (466.7 B). The employer part is the larger one, since the employer rate is almost twice the employee rate.

Key Facts: These are mandatory contributions with no opt-out. The National Insurance System covers virtually all Norwegian residents and workers. The temporary extra employer contribution is abolished from 1 January 2025 (relief of 6.9 B booked / 12 B accrued). Combined employer-employee rate remains among Europe’s highest.

Income & Wealth Tax ▼

435.2 billion NOK

Taxes on personal income, mainland company profits and wealth (official). Percentage of total: 19.3%

Tax Structure: Norway has a progressive income tax system with a 22% base rate on ordinary income plus a stepped bracket tax. Including the 7.7% social security contribution, the top marginal rate on wage income is about 47% in 2025. Official figure from Table 2.2 (up 4.0% from 418.5 B in 2024).

What is in this line: the state’s share of personal income tax (fellesskatt), bracket tax (trinnskatt), tax on company profits from mainland businesses, and the state part of wealth tax. Municipal and county income tax goes directly to local government and is not in the state budget. The budget tables publish only the combined total.

Key Facts: Wealth tax is levied on net wealth above a threshold and is split between municipalities and the state. Company profits are taxed at 22%.

Value Added Tax (VAT / MVA) ▼

409.3 billion NOK

Consumption tax on goods and services at 25% standard rate (official). Percentage of total: 18.2%

Tax Rates: Norway uses a standard 25% VAT rate, one of Europe’s highest. Reduced rates of 15% (food) and 12% (public transport, culture, etc.) apply to specific items. Some services like healthcare and education are VAT-exempt. Official figure from Table 2.2 (up 2.6% from 398.9 B).

Standard rate 25%

Food and non-alcoholic drinks 15%

Passenger transport, cinema, accommodation, etc. 12%

The budget tables publish only the combined VAT total (409.3 B).

Key Facts: VAT is applied to all goods and most services. Food is taxed at 15% to reduce burden on consumers. Electric cars pay VAT on the part of the price above NOK 500,000 (2025). Norway’s VAT system is one of the most complex in Europe due to numerous exemptions and reduced rates.

Other Revenues ▼

154.3 billion NOK

Interest income, dividends, SPN transfer, state property income and transfers (official). Percentage of total: 6.9%

Sources: Diverse revenue sources including returns from investments, state enterprises and government properties. Also includes the new annual transfer from Statens pensjonsfond Norge (SPN). Official group total 154.3 B.

Interest and dividends etc. 87.5 billion NOK 57%

of which transfer from SPN (new from 2025) 11.7 billion NOK —

Other revenue (fees, sales, transfers) 62.3 billion NOK 40%

State enterprises (forvaltningsbedrifter) 4.6 billion NOK 3%

Key Facts: From 2025 a new rule allows annual transfers from SPN to address high ownership concentration on the Oslo Stock Exchange. State-owned companies such as Statkraft, Telenor, DNB and Hydro pay dividends into this line; the Equinor dividend is counted with petroleum revenue instead. State properties include forests, hydroelectric facilities and real estate.

Excise Duties & Specific Taxes ▼

112.1 billion NOK

Special taxes on vehicles, fuel, tobacco, alcohol, electricity and other specific goods (official). Percentage of total: 5.0%

Purpose: Excise duties serve both revenue and policy goals — discouraging consumption of alcohol and tobacco, funding road maintenance, and promoting environmental objectives like EV adoption. Official breakdown from Table 2.2 (sorted largest first).

Other specific duties 54.2 billion NOK 48%

Tobacco & Alcohol Tax 24.4 billion NOK 22%

Motor Vehicle Tax & Registration Fees 18.8 billion NOK 17%

Electricity Tax 10.8 billion NOK 10%

Customs duties (toll) 3.9 billion NOK 3%

Key Facts: Vehicle registration fees can exceed 100,000 NOK on luxury cars. Fuel taxes include carbon taxes. Tobacco taxes are designed to discourage smoking, with cigarette prices among Europe’s highest. Motor-vehicle duties fell 8.6% from 2024 due to the EV transition.

Important Context: Norway's tax system is among the world's most progressive. Total tax burden on mainland economy (excluding petroleum) represents approximately 40% of GDP. High taxes support comprehensive public services, universal healthcare, free education, generous parental leave, and comprehensive social welfare programs.

Expenditure Categories Overview (Sorted by Size)

National Insurance / Folketrygden (34.7 %)

Other Services & Programs (30.5 %)

Local grants + Health trusts (23.1 %)

Defense (5.4 %)

Transport (4.8 %)

Petroleum expenditure (1.5 %)

Expenditure Categories (Largest First) — Click to Expand

Social Security & Welfare (Folketrygden) ▼

701.9 billion NOK

Largest budget item (≈ 34.7% of total spending) — Income support and social insurance programs for all Norwegians (official Folketrygden).

Purpose: Norway’s social insurance system provides comprehensive protection from cradle to grave. Programs are managed through the National Insurance Scheme (Folketrygden) and provide income security for workers, families, elderly and vulnerable populations. Official total from Table 2.2 (up 7.7% from 651.7 B).

Old-Age Pensions (Alderspensjon) 335.6 billion NOK 48%

Disability Pensions (Uføretrygd) 132.7 billion NOK 19%

Sickness Benefits (Sykepenger) 71.3 billion NOK 10%

Work-Assessment Allowance (AAP) 50.8 billion NOK 7%

Health services (within Folketrygden) 46.2 billion NOK 7%

Parental Benefit (Foreldrepenger) 29.5 billion NOK 4%

Other social purposes 20.5 billion NOK 3%

Unemployment Benefits (Dagpenger) etc. 15.3 billion NOK 2%

Key Facts: About 1.07 million people receive old-age pension. Pension age is 67 (flexible options available). Parental leave is 49 weeks at full pay (100%) or 59 weeks at 80% pay, shared between parents. Sickness benefit covers 100% of income up to 6 G (about NOK 780,000) for up to one year. Unemployment rate is approximately 4%.

Other Services & Programs ▼

616.4 billion NOK

All non-petroleum spending outside the other categories (education, aid, police, agriculture, culture and more). Percentage: 30.5%

Scope: Diverse category including international development assistance, cultural institutions, research funding, environmental initiatives, police, higher education and various specialized public services. Selected official items from Table 2.2 (sorted largest first).

Higher Education, Research & Vocational 61.4 billion NOK 10%

International Development Aid (Bistand) 48.7 billion NOK 8%

Police & Prosecution 30.5 billion NOK 5%

Agricultural Agreement 28.8 billion NOK 5%

Child Benefit & Cash-for-Care 27.6 billion NOK 4%

Interest on Government Debt 16.4 billion NOK 3%

All other spending (culture, environment, integration, justice, etc.) 403.0 billion NOK 65%

Key Facts: Norway aims for ≈ 1% of GNI in official development assistance (exceeding the UN 0.7% target). Major aid recipients include sub-Saharan Africa, the Middle East and humanitarian crises. Cultural funding supports NRK, museums, theatres and literature. Climate programmes fund domestic emissions reductions and international climate action.

Local Grants & Health Trusts ▼

466.8 billion NOK

Block grants to municipalities/counties + regional health trusts (official). Percentage of spending: 23.1%

Scope: Core financing of local public services (schools, care, local infrastructure) via block grants, plus the specialist health service through the regional health trusts (RHF). Official figures from Table 2.2.

Local Government Transfer Grants (Rammetilskudd) 238.4 billion NOK 51%

Regional Health Trusts (RHF) 228.4 billion NOK 49%

Key Facts: Norway has 15 counties and 357 municipalities (since 2024), all receiving central government funding. Both items grow ≈ 6% from 2024. The health-trust allocation supports increased patient treatment beyond pure demographic growth and continues efforts to reduce waiting times. Public sector employs approximately 800,000 people (≈ 30% of workforce).

Defense & Security ▼

110.0 billion NOK

Increased 19.2 billion from 2024 — Military and defence operations. Percentage: 5.4%

Context: Defence spending has increased significantly due to regional security concerns and NATO obligations. Norway has already reached NATO’s 2% of GDP target; 2025 spending is estimated at 2.16% of GDP. The increase follows the new Long-Term Defence Plan (15.5 B of the rise is the first major step of that plan). Official figure 110.0 B. (The adopted budget raised this to 125.0 B, mainly through extra support to Ukraine.)

Key Facts: Norwegian military has ≈ 20,000 active personnel plus ≈ 40,000 in the Home Guard. Norway has ordered 52 F-35A fighter jets. New frigates are being procured. Conscription has applied equally to men and women since 2015; service is normally 12 months. Continued support to Ukraine via the Nansen programme (floor of 15 B NOK annually).

Transport (Samferdsel) ▼

96.1 billion NOK

Roads, rail, coastal and other transport infrastructure (official). Percentage: 4.8%

Official figure from Table 2.2 (up 5.2% from 91.3 B). Supports maintenance, new projects and climate-friendly transport solutions across Norway’s challenging geography.

Petroleum-related Expenditure ▼

29.6 billion NOK

Direct state petroleum activity costs (SDØE etc.). Percentage: 1.5%

These costs are netted against petroleum revenues when calculating the net cash flow transferred to the SPU (642.8 B). Official figure from Table 2.1.

Spending Insights:
• Social spending dominates, reflecting Norway's generous welfare state and aging population
• Defense spending has increased significantly due to geopolitical security concerns
• Norway maintains high spending on education and healthcare—cornerstones of the Nordic model
• International aid commitment (1% of GNI) is among world's highest
• Petroleum revenues fund the difference between tax revenues and total spending, making Norway's public sector fundamentally dependent on oil wealth