Explained: How does income tax work in Sweden?
Sweden is an expensive place to live, with the highest earners paying up to 55 percent in tax above certain thresholds. Understanding how income tax works is crucial before a salary negotiation or accepting a job offer.
Income tax is split into two categories in Sweden.
All wage earners will pay a local or municipal tax, whether or not they reach the threshold for national tax. This consists of two parts: the tax you pay to the municipality (kommun) where you live and the region.
So if you for example live in Malmö, your taxes go to Malmö City Council, where they are used to fund things like schools and care homes, and Region Skåne, which is responsible for healthcare and public transport.
The average municipal tax rate in Sweden is currently 32 percent, but it can reach as high as 35 percent depending on where you live. This is calculated based on where you live, not where you work, so moving home can lead to a change in your pay check. The difference between the municipality with the highest rate of municipal tax (Dorotea, 35.15 percent) and the lowest (Österåker, 28.98 percent) is over 6 percent.
On top of that, higher earners pay a national tax (statlig skatt) of 20 percent.
This is only paid on annual income over a certain threshold, set at 598,500 kronor (53,800 euros) for 2023, or roughly 51,200 kronor per month. If you earn less than the lower limit, the national tax is not applicable.
Those over the age of 66 can earn more before having to pay national tax: 56,900 a month.
As of 2020, there is only one income band for higher earners, after an additional five percent tax (called värnskatt) for the highest earners was scrapped. So however much you earn, the national tax never rises above 20 percent.
Your general tax rate will therefore fall somewhere between 29 and 55 percent, depending on your income and where in the country you live.
But deduction rules can enable you to reduce your overall tax rate, including by earning a fair bit more than the 598,500 kronor limit without actually having to pay the national tax.
The basic deduction -- how much you can earn before calculating municipal and national tax -- shifts a bit depending on income but also age. It is between 22,300 and 40,500 kronor annually for under-65s.
Expenses incurred during fulfilment of employment can generally be deducted from the income on which you are taxed. These include things like travel expenses, car expenses, living allowances on business trips, necessary literature and tools of the trade.
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Income tax is split into two categories in Sweden.
All wage earners will pay a local or municipal tax, whether or not they reach the threshold for national tax. This consists of two parts: the tax you pay to the municipality (kommun) where you live and the region.
So if you for example live in Malmö, your taxes go to Malmö City Council, where they are used to fund things like schools and care homes, and Region Skåne, which is responsible for healthcare and public transport.
The average municipal tax rate in Sweden is currently 32 percent, but it can reach as high as 35 percent depending on where you live. This is calculated based on where you live, not where you work, so moving home can lead to a change in your pay check. The difference between the municipality with the highest rate of municipal tax (Dorotea, 35.15 percent) and the lowest (Österåker, 28.98 percent) is over 6 percent.
On top of that, higher earners pay a national tax (statlig skatt) of 20 percent.
This is only paid on annual income over a certain threshold, set at 598,500 kronor (53,800 euros) for 2023, or roughly 51,200 kronor per month. If you earn less than the lower limit, the national tax is not applicable.
Those over the age of 66 can earn more before having to pay national tax: 56,900 a month.
As of 2020, there is only one income band for higher earners, after an additional five percent tax (called värnskatt) for the highest earners was scrapped. So however much you earn, the national tax never rises above 20 percent.
Your general tax rate will therefore fall somewhere between 29 and 55 percent, depending on your income and where in the country you live.
But deduction rules can enable you to reduce your overall tax rate, including by earning a fair bit more than the 598,500 kronor limit without actually having to pay the national tax.
The basic deduction -- how much you can earn before calculating municipal and national tax -- shifts a bit depending on income but also age. It is between 22,300 and 40,500 kronor annually for under-65s.
Expenses incurred during fulfilment of employment can generally be deducted from the income on which you are taxed. These include things like travel expenses, car expenses, living allowances on business trips, necessary literature and tools of the trade.
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