If you’re a resident in Sweden and fully taxable (normally if you’re staying in the country more than 6 month of the year) the general rule is that all income should be taxed in Sweden.
If you have income from other countries and those incomes in some way are taxed in the original country, that tax is generally deducted from what is due to be paid in Sweden (to avoid double taxation). This is regulated by tax agreements between the countries.
Swedish salary
To get officially paid in Sweden your salary needs to be paid from a Swedish taxable entity registered at Skatteverket. This can be:
- A Swedish AB (Limited company)
- A registered Swedish branch of a foreign company (Utländsk filial)
- A tax registered foreign company (utländskt registrerat bolag)
- A sole trader (enskild firma)
- A partnership (handelsbolag / kommanditbolag)
- Any other taxable entity (housing association, registered charity, sporting association etc).
The Swedish taxable entity must be registered as an employer to declare the payroll taxes. This registration process is most easily handled at https://verksamt.se.
The taxes applicable for payroll excluding pension costs are
- Arbetsgivaravgifter
- Inkomstskatt
Arbetsgivaravgifter – National Insurace
The “Arbetsgivaravgifter” could be described as the equivalent of a national insurace. This tax is paid by the employer on top of the employees salary. The employee never “sees” this tax since it’s a tax paid by the employer straight to Skatteverket.
The general level of Arbetsgivaravgifter is 31,42% (2023) on top of the gross salary. There are reductions to this tax in certain circumstances.
Example gross salary: 30 000 SEK / month. Arbetsgivaravgifter due 31,42% = 9 426 SEK/month.
Inkomstskatt – Income tax
The “inkomstskatt” is the tax paid by the employee from the employee’s gross salary. The tax due to be paid depends on where the employee lives (what Kommun) and the employee’s total annual increase (salary, capital income, deductions etc).
To pre-calculate the level of tax to be paid, a tax table is normally used. This tax table tells how much tax should be paid if the employee earns the same amount each month and lives in a specific “kommun”.
The income tax is not a flat rate tax. It’s a progressive tax where the tax percentage increases as the salary increases.
The income tax is administrated by the employer, meaning that the employer normally withholds the income tax and pays it forward to Skatteverket.
Example gross salary: 30 000 SEK / month. Tax table 30 for 2020 gives: 6 529 in income tax per month. Due to be paid to employee: 30 000 - 6 529 = 23 471
It’s important to remember that the income tax is ultimately the responsibility of the employee. The national insurance tax (arbetsgivaravgifter) is the employer’s responsibility.