Monday, 27 November 2017

Being Open About Pay

In Norway, it is possible to find out how much anyone else is paid, and it rarely causes problems.

From 2001, the government published the details (income, assets and the tax they paid) in a book which could be found on a shelf in the public library. Today the information is held online.

Transparency is important, partly because Norwegians pay high levels of income tax (an average of 40.2%, compared to 33.3% in the UK; the European average is 30.1%). People therefore want to know that everyone else is paying, and know that it is being spent appropriately. They need to have trust and confidence in both the tax and social security systems.

Because wages in many sectors are set through collective agreements, and pay gaps are relatively narrow, in most workplaces people already have a fairly good idea how much colleagues are earning. The gender pay gap is also narrow, by international standards, ranking 3rd out of 144 countries by the World Economic Forum.

While initially there were no limitations, since 2014, people have to log in to the website using their national ID number to access the data, which means it is possible to find out who has been doing searches on your information. The change saw a significant drop in search numbers, as it took out the 'Peeping Tom' searches. A recent survey indicated that 92% of people do not look up friends, family or acquaintances.

The tax lists give net income, net assets and tax paid. However, property portfolios may well understate the value, as the taxable property value is often far less than the current market value.

But the 2014 restrictions have not stopped whistleblowing, and people still report possible cases of tax evasion.

Source: Norway: the country where no salaries are secret, by Lars Bevanger. BBC News website, 22 July 2017