Swedish Income Tax
Taxation is relatively high in Sweden and contributes to three levels of the Swedish government: local, regional and central. However, the process is relatively straightforward, as income is taxed at source. Taxation is usually around 30% of income and is both direct and indirect. Taxes are collected by the Swedish Tax Agency. Income tax includes a state tax and a municipal tax. If working in Sweden for less than six months you can apply for a special income tax rate of 25% (SINK). If remaining for a longer period, you have to follow normal tax rules.
Taxable income for non-residents and investment income are subject to tax at flat rates. Employment income for residents and other earned income for both residents and non-residents are subject to both municipal income tax and national income tax.
Income less than 401,100 SEK (approx. €42,081) is subject only to municipal tax.
Municipal tax, flat rate depending on municipality in which the individual is resident. Approx. 29-34%
State income tax is 20 per cent if that part of your taxable earned income that exceeds SEK 443 300 (2014: SEK 433 900). If the taxable earned income exceeds SEK 629 200 (2014: SEK 615 700), it is necessary to pay state income tax of a further 5 per cent on that part that exceeds SEK 629 200 SEK (2014: 615 700 SEK).
Tax tables can be found: here.
You are entitled to paternity leave benefits in Sweden which are based on Employer Social security contributions that you will have made. although we do not pay full payroll of 31,42% we still settle monthly 21.27% which entitles you for this benefit. You can contact Försakringskassan (Swedish Social Security) directly and they will work out how much leave you’re entitled to based on your personal details how much you would be able to benefit from the system back. Försakringskassan then once approved pay 80% of your salary directly during your leave.
Tax Changes in 2017
According to new rules applicable in 2017, it is possible to deduct a basic allowance of between SEK 13 200 and SEK 34 500 on taxable earned income (employment and business activity), if having unlimited tax liability for the whole year. Further changes valid for 2017 are as below:
- Further 5% state tax for income that exceeds SEK 638 500
- State income tax is 20% of that part of taxable earned income tax exceeds SEK 438 900
Calculate your net income:
Please note, that this calculation took into a consideration just a very basic pieces of information of yours and the result might vary significantly. Contact us for detailed and precise calculation or let us know by filling a form and will call you back. Contact us for an exact calculation.
This is a Special income tax for individuals who work in Sweden and reside abroad. Following conditions must be fulfilled in case of liability for SINK-tax:
- Are an individual who resides and is domiciled abroad.
- Receive income based on work in Sweden, therefore this income must be liable for tax under the special income tax for non-residents act (1991:586)
- Are working in Sweden for less than 6 months and time spent abroad is NOT deducted if it appears to be a temporary interruption of a continuous stay in Sweden.
Additionally, under the 183-day rule in the Special Income Tax Act for Non-residents (SINK), a non-resident individual will not be subject to Swedish income tax, provided the individual’s income is paid by a non-Swedish employer with no permanent establishment in Sweden and that the stay in Sweden does not exceed 183 days in a 12-month period in total. Sweden does not apply the economic employer concept.
Expats cannot claim any deductions if they are habitually staying in Sweden for a period longer than 6 months, in addition the Tax Authority may consider the employee resident in Sweden for tax purposes even though he/she is living abroad.
“Swedish employers and foreign employers who have a fixed place of business in Sweden have a duty to deduct and pay in preliminary tax for employees in Sweden. Employers who do not have a permanent establishment in Sweden have no such liability. In such cases the employee has himself to attend to the tax payments. Self-employed persons also pay in their tax themselves.” For further details, please click here.
“If you are a foreign employer who does not have a fixed place of business in Sweden, your employees have to pay tax in the form of SA-tax every month. If the employee is covered by Swedish National Insurance they may agree with their employer for the employer to pay SSC contributions in the form of self-employed person’s contributions.” For further details, please click here.