Sweden is a great place to live and work. But it has always been known as an expensive country and most new expats want to learn about tax in Sweden.
Apart from all of the poster benefits like 400+ days for parental leave, great conditions with Union input, and a relaxed hierarchy, Sweden is one of the few places in Europe where people don’t mind paying higher taxes.
Tax in Sweden is high, and Sweden has the 2nd highest tax rate in Europe but, like Denmark, the feeling for tax here is not as hated as other places in Europe (like the UK).
People in Sweden see the value and benefit of the taxes they pay, and therefore there is much more belief in paying taxes and dealing with the higher tax rates.
How much tax will I pay in Sweden?
My good friend Christian Jensen made a great website tool a few years back called “Hur Mycket Skatt” (How Much Tax) which is a great, up to date calculator for people working in Sweden to check how much they will be taxed and how much they will bring home. It’s updated yearly using data from the Tax Office (Skatteverket) and gives a pretty accurate idea of how much tax you will pay.
Just enter your postcode, your monthly salary and click “Beräkna” (Count). It will give a great breakdown on how your salary is divided amongst different departments, and check the “Summa kvar” (Amount left) line in green for the salary you will bring home.
Note: This is an estimate so not 100% accurate and something to give you an indication of how much you will bring home. You will also see how much you are being taxed, which you can see in the “Kommunalskatt” (Communal tax) line
Here is a sample of what you will get using the tax calculator. These numbers are made up as a demonstration. I have also unticked the “Betalar kyrkoskatt” (pay Church tax) option.
For a better calculation, check the (pay-slip) you get from your employer which will give you all of the details.
Taxes in Stockholm
Just like many places, Sweden works on a PAYE (Pay as you Earn) scheme, where tax is automatically deducted from your paycheck per month (normally on the 25th of the month).
Declaring your Tax in Sweden
Every year, the Swedish tax office (Skatteverket) asks everyone in Sweden to declare their income for the closing financial year. Unlike some countries like the UK, workers in Sweden MUST declare their income for the year and it is their responsibility to make sure this is completed and accurate. Your employer will give you a form what includes all of the income and outgoings of your financial year. You need to upload this via the Skatteverket website and they will calculate if you are owed any overpaid tax.
Like most countries, Sweden has a progressive system of taxable income levels. They look something like this (these are 2014 levels and will change yearly):
· 0% from 0 kr to 18,800 kr
· 31% from 18,800 kr to 433,900 kr
· 31% + 20% from 433,900 kr to 615,700 kr
· 31% + 25% over 615,700 kr
Again, checking the Hur Mycket Skatt website will give you a good idea.
Freelancers and Self Employed
This is where tax in Sweden gets a little more complicated. You must be registered as a company to take on additional income like a freelancer. There are services like Frilans Finans that will let you work as a freelancer but without all of the paperwork and registering yourself as a business. They take a fee but can make your life much easier.
· Inheritance tax was abolished in 2005
· Capital Gains tax is around 30% and is currently being discussed in the parliament. Some start-ups want this reduced so Swedish businesses can offer equity in the business
For more questions about tax in Sweden, just leave a comment or send us a message via our contact form.