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Income taxes in Sweden

Same/lower than the UK?

Timbosaurus
post 21.Mar.2013, 01:33 PM
Post #1
Joined: 21.Mar.2013

Firstly - hello all, I've been an avid reader on here for quite some time, and am a great fan of many of your posts.

I've been running a few income scenarios on here:
http://www.ekonomifakta.se/sv/Fakta/Skatte...a-ut-din-skatt/

This tells me that on an income of 15,000 SEK per month, I would net 12,309
On an income of 30,000 SEK per month, I would net 23,191 (both assumptions based on living in Stockholm county)

Now - if I run the same numbers through here for the UK:
http://www.listentotaxman.com/

On an equivalent income of £1,500 per month, I would net £1,254.81
On £3,000 per month, I would net £2,274.81

Obviously the VAT is slightly higher in Sweden than the UK, but the council taxes are far lower, the property prices are often about 1/10th of what you'd pay for the equivalent in the UK, and there are all the other perks like free childcare, free university etc. This makes me wonder why people complain about the high taxes in Sweden, when it seems that the vast majority of the British population would be inordinately better off there.

Can anybody point me to what I'm missing?
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PDX
post 21.Mar.2013, 01:54 PM
Post #2
Location: Stockholm
Joined: 2.Aug.2011

QUOTE (Timbosaurus @ 21.Mar.2013, 02:33 PM) *
Obviously the VAT is slightly higher in Sweden than the UK, but the council taxes are far lower, the property prices are often about 1/10th of what you'd pay for the equiv ... (show full quote)

Because the salary figures you quote would be borderline poverty, especially in Stockholm. Try seven figure income in your calculator and you'll see the difference rolleyes.gif

( To clarify: tax rate progression is very steep over here )

~~~PDX~~~
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Yorkshireman
post 21.Mar.2013, 01:54 PM
Post #3
Joined: 22.Nov.2011

QUOTE (Timbosaurus @ 21.Mar.2013, 01:33 PM) *
Obviously the VAT is slightly higher in Sweden than the UK, but the council taxes are far lower, the property prices are often about 1/10th of what you'd pay for the equiv ... (show full quote)

Child care is not free, whilst subsidised, you still have to pay each month. Uni course fees for the moment are free, but students need to take student loans to survive that are repaid during the rest of their working lives, unless they can earn enough whilst studying. Healthcare is not free, whilst subsidised, you still have to not only pay for medicine, but also just to visit the Doctor. You also pay for nights in hospital in many cases, additional costs if you need x-rays etc... Whilst VAT is slightly! higher, it is on everything, UK doesnt have VAT on kids clothes, Sweden does 25%. Property prices you have seen, if really 1/10th the price of same in UK are probably in the back-end-of-nowhere ...so you need to include a lot of additional costs for transport etc. Property Tax is only lower right now because of the current government that put a cap on the maximum chargeable ... it is likely the Social Democrats will remove that sooner or later ...There is no unemployment benefit in Swede, you have to pay anything between 200->400 SEK permonth just to be covered for unemployment. When you are off work sick, 1st day = 0 pay (because in the 90s when it was 100% paid, people took too many sickies, and employers employed on average 25% more people than needed to cover that!). Everything, apart from cigs. is probably more expensive in Sweden, and not just because of the difference in VAT ... basically, you get more bang-for-your-quid in the UK that you would in Sweden.

Taxes are exceptionally high for employers, which is why it can be a challenge to find work ... in UK National Insurance used to always hover around 9-11% for an employer, in Sweden an employer pays NI at 31.4% (3 times as much!)

Basically in Sweden they tax everything possible, including after Death biggrin.gif ... Each year there is added to every tax declaration Begravningsavgift (burial fee) ... you pay to cover the disposal of your body once you depart...
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Beef
post 21.Mar.2013, 02:15 PM
Post #4
Location: Stockholm
Joined: 7.Feb.2006

Yes, and if you were to sell up and move here you'd not get much for your money.. I moved here in 2001. I did strangely feel relatively well off but it took me 10 years to get my salary back to the level that I had in the UK. I wasn't even working in London!

My position in Stockholm was removed/moved out of Sweden due to as Yorkshireman states, the total amount it costs to employ me just not being competitive. Remember as an employee your take home pay is around only 30% what your employer budgets for you..

I've also received good health care as I was quite ill last year but it really did cost me.. They are terrible here about being up front about costs too. Often bills just appear in the post. One prescription I had during my time as an outpatient cost 2500SEK !!! They NEVER tell you. You sweat when at the chemist regarding about what's going to pop up on the total.. Just some things to consider.

However, I do live in a lovely house which I could never afford in the UK. But that alone is not a reason to move in my opinion.
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skogsbo
post 21.Mar.2013, 02:20 PM
Post #5
Joined: 20.Sep.2011

I would say the higher tax balances out with childcare if you have 2 kids of dagis age and you are both working fulltime, which is unlikely when you first come here and once they are of school age, the benefit would be over anyway. Plus you will still pay a little more for just about everything else, including electricity which everyone in the UK thinks they already pay alot for! If you are a material person, a shopper and a spender, then Sweden probably isn't for you.

What you get for your tax are the non material benefits, personally, I would say transport is better here, it's certainly cleaner, the roads are in better condition and far less congested, there is space to breath and the air is OK to breath.

Many will no doubt rant about how everything is staggeringly expensive etc. but if you live a modest life, prefer the less material things and enjoy free time outdoors, these are real benefits to Sweden that you can enjoy everyday of the year.
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Timbosaurus
post 21.Mar.2013, 11:24 PM
Post #6
Joined: 21.Mar.2013

Interesting responses. Many thanks for your thoughts, folks.
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Bender B Rodriquez
post 21.Mar.2013, 11:45 PM
Post #7
Joined: 25.Mar.2006

QUOTE (Beef @ 21.Mar.2013, 02:15 PM) *
Remember as an employee your take home pay is around only 30% what your employer budgets for you..

It is about 50% as a rule of thumb.
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wendist
post 22.Mar.2013, 12:07 AM
Post #8
Joined: 14.Feb.2010

QUOTE (Beef @ 21.Mar.2013, 01:15 PM) *
I've also received good health care as I was quite ill last year but it really did cost me.. They are terrible here about being up front about costs too. Often bills just ... (show full quote)

Just out of curiosity, is there any reason why you are not covered by högkostnadsskyddet for prescription medicine?

http://www.vardguiden.se/Sjukdomar-och-rad...gkostnadsskydd/
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Mib
post 22.Mar.2013, 01:50 AM
Post #9
Joined: 7.Jul.2006

There is 30% tax relief on mortgage interest.

However, if you planned to transfer money to Sweden now where you might get 9.5kr to each pound and you decide to return to the UK several years later when IMHO that the pound will be stronger than today, then that will cost you a big amount ie. if you need 12kr to each pound. Do the math. That would also reduce your Swedish salary when comparing to the UK. The Swedish kronor is very strong at the moment.

I would say that for the majority who are on a reasonable salary and take into account benefits such as heavily subsidised nursery care + 380 days for parental leave for children up to 8 at 80% of salary up to a limit around 26000/27000 p/m, then I would say that you are better off here.

You get more for your money and better quality when buying property, but certainly not 1/10th of UK prices. The average price in centrsl Stockholm today is 60 to 65,000 per sqm

People are calmer...less aggressive...less people, less traffic, good/reliable and cheaper public transport. The quality of life is good and it seems the average Swede owns an apartment, estate car and has 3 holidays a year...Thailand, skiing and time at their summer house.

Electronics etc can be cheaper in the UK, but the prices in Sweden are much better these days, but you can buy alot online from outside Sweden. Groceries are much more expensive and less choice.

There's no inheritance tax!! But the risk is that the next Government is likely to be from the left side of the political wall and they like taxes...so may reverse some of the reductions etc.
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Taxalien
post 22.Mar.2013, 09:51 PM
Post #10
Joined: 24.Dec.2009

I would imagine that most people coming fromt the UK might end up working in some kind of service oriented line of business. That could mean working self employed or working in small services oriented companies.

In that sense I think it makes sense to look at the total cost of employment.

The total cost of employment is interesting irrespective of whether you are self employed or if you are employed and therefore don't see the total cost. For the employed I think it is interesting because you have to think a little about what the future has in store for you.

For example, is it likely that the job you are doing is going to exist much longer? As someone said, jobs are moved elsewhere for the very reason that overall cost is too high.

What does the prospects of improving your renumeration look like? As someone else said, it took a long time to return to a salary he had been used to from the UK. The latter is of course because to be able to pay you another krona the costs is exponentially expensive as soon as you start getting somewhere in your career.

So let's assume there is 700 000 kr to pay you. In Sweden that would mean 700000 / 1.3042 if employed by a company other than self employed. That would equate to 44 727 kr per month and according to ekonomifakta that would give you 31735 kr per month after taxes. 31735*12 is 380820 kr which means you keep 54% of what was available to renumerate you.

If we apply a 1% salary increase and say that you would now receive 45174 kr (+447 kr) before taxes. In that case the overall cost increases to 706991 kr while you would receive 31 963 kr after taxes. So a 6991 kr increase in taxes for 228 kr increase after taxes. Worth it?

In the UK, using a self employed calculator at an exchange of 10 kr to a pound we get:

£4541.33 or 45413 kr after taxes.

With a 1% increase we get £4580.53 or 45805 kr or an increase of 392 kr after tax (72% more than in Sweden).

In Germany, assuming 9 kr to a Euro, we get €77777 to spend on salary and assuming you work as a freiberufler, we get:

Home take per month:

Not married: €4327 or 38943 kr after taxes.
Married: €4967 or 44703 kr (wife not working).
Married with 1 kid: €5299 or 47691 kr (...)
Married with 2 kids: €5626 or 50634 kr (...)

Now I will say, I wasn't comparing everything here equivalently.

But it was reasonable for anyone who is running his own business. In that respect all numbers make sense, if we assume the business would fall under freiberufler taxation in Germany.

So Germany wins hands down by giving your average married couple with two kids 18899 kr more to spend every month. One caveat though. Healthcare. If private, I think you would have to deduct 1000 kr from that figure per month. If inside the public system then you are back near Swedish figures.

So I will throw in this for you. Sweden lauds itself regarding the generous parental leave.

But as I showed above, theoretically every German family gets the same amount of payment for 18+ years without paying a cent for it in taxes.

Is therefore the wonderful föräldraförsäkring total BS, unless you want to consider the rights of the father. However, please note that in addition to the calculus above, Germany does have a similar system although I am not familiar with it.
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Yorkshireman
post 22.Mar.2013, 10:12 PM
Post #11
Joined: 22.Nov.2011

QUOTE (Taxalien @ 22.Mar.2013, 09:51 PM) *
But as I showed above, theoretically every German family gets the same amount of payment for 18+ years without paying a cent for it in taxes.

And whilst everyone tends to have this stereotyped image of Sweden being the benefit capital of Europe ... not only do the Germans have a better income tax situation, just simple things like Child Benefit are better there... under certain circumstances Child Benefit is paid up until the child is 25 ...25! Child Benefit! WTF! rolleyes.gif
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Bender B Rodriquez
post 22.Mar.2013, 11:17 PM
Post #12
Joined: 25.Mar.2006

QUOTE (Taxalien @ 22.Mar.2013, 09:51 PM) *
In Germany, assuming 9 kr to a Euro, we get €77777 to spend on salary and assuming you work as a freiberufler, we get:Home take per month:Not married: €4327 or 389 ... (show full quote)

Did you subtract the cost for the mandatory health insurance, which no matter if you go public or private equates to about 15% of the gross salary?
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tuborgian
post 23.Mar.2013, 08:27 PM
Post #13
Joined: 1.Jul.2011

It baffels me as well why everyone goes on about how high the taxes are here and how expensive it is. The way that I see it is that here if you are lucky and/or extremely careful you can be left with a fairly high amount of disposable income. In the UK, it appears on the surface to be cheaper to live but ends up being stupidly expensive once all bills are paid. Put it this way: me and other half are doing exactly the same jobs, living in the same situation (one bed flat in town) and in the UK we ended up having to buy food on the credit card at the end of the month, but here in a good month we can save 10,000 Kr. I don't think it is the amount of tax, but all the utility bills and other odds and sods that needed in the UK, but here (like I say, if you are careful) you can avoid all those "extras".
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Beef
post 23.Mar.2013, 08:46 PM
Post #14
Location: Stockholm
Joined: 7.Feb.2006

Good point. As I said when I moved over, I felt much better off than I did in London despite the costs.. I think what winds people up are the relatively high price for exactly the same items that you can get in UK, France, USA you name it, for example everything from an Indian take away which is up to 100% more expensive than London to OTC medicines which can be as much as 20 times more expensive!!!! Plus the total amount of tax you actually pay. It just leaves a bad taste and doesn't feel right.. I always think of Norway though when I feel ripped off. Always helps! smile.gif
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wendist
post 23.Mar.2013, 10:01 PM
Post #15
Joined: 14.Feb.2010

QUOTE (Beef @ 23.Mar.2013, 07:46 PM) *
to OTC medicines which can be as much as 20 times more expensive!!!! Plus the total amount of tax you actually pay.

@Beef

Just out of curiosity, is there any reason why you are not covered by högkostnadsskyddet for prescription medicine?

http://www.vardguiden.se/Sjukdomar-och-rad...gkostnadsskydd/
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