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Pension System and Travel Allowance

Job offer

Cenk
post 25.Aug.2015, 08:04 PM
Post #1
Location: Skåne
Joined: 25.Aug.2015

Hi guys!

I am considering a job offer from Sweden which is a gross salary of 45 000 SEK/month + pension + travel allowance and other benefits. I will discuss the offer with the employer next week. So, I just want to be prepared for the discussion.

1. My first question is, in the offer they have stated the pension separately. In my own country (non-EU) gross salaries already include pension contributions. Is it the same way in Sweden? Do you think they have stated pension separately to make the offer look more attractive? If so, can I opt not to get pension contribution and ask for an increase in the salary?

2. Second question is regarding the travel allowance. My job will for sure include a lot of travel abroad. What do you think they have meant by travel allowance? I have made some search on the internet and it seems that Sweden tax office has some kind of contributions for employees traveling for business. If this is what they mean it is nothing to do with the company. Do you think they have some other kind of travel allowances within the company? In my own country whatever expenses done abroad (job related) are covered by the company as long as one can provide the receipts.

These points are quite important to me since I am already making a similar salary and just considering accepting the offer for having experience of working abroad.

Thanks,
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ChocOwl
post 25.Aug.2015, 09:28 PM
Post #2
Joined: 17.Jan.2011

#1Did you find this page? https://www.skatteverket.se/servicelankar/o...064694c4f4.html
Maybe an answer there somewhere...

#2 Do you mean traktamente?
https://www.skatteverket.se/privat/skatter/...af80006547.html
The tax office has rules about the size of the travel allowance, anything over the standard amount would usually then be part of your taxable income. Anything up to the standard amount is tax-free. yay!
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LLHope
post 26.Aug.2015, 08:35 AM
Post #3
Location: Stockholm
Joined: 1.Jan.2014

QUOTE (Cenk @ 25.Aug.2015, 07:04 PM) *
1. My first question is, in the offer they have stated the pension separately. In my own country (non-EU) gross salaries already include pension contributions. Is it the same ... (show full quote)
An employer pays social costs at 31.42% of your compensation. That includes State pension (which is base and income related to a maximum salary of approx 37000/month). If you work in sweden for 40 years then this state pension will only return approx 50% of your income and you pay income tax on that when the pension is paid, so if you earn more than 37000/m you should really consider additional pension funds to cover the difference.

The employer is probably adding a separate amount as part of the companies employee pension scheme, in addition to the amount already paid as social charges. The employer does this as a benefit for you and they pay approx 10% less in social charges on that amount placed into the scheme.

The benefit for you is that you only pay tax on the amount once, when you take your pension. If you ask for it as additional salary then you pay income tax on that and the employer pays full social charges also (so they may not want to convert the full amount to salary). If you then place that money into your private pension scheme, then if you at retirement are in Sweden, you pay income tax again on your pension. This means you have paid income tax twice on that money!

QUOTE (Cenk @ 25.Aug.2015, 07:04 PM) *
2. Second question is regarding the travel allowance. My job will for sure include a lot of travel abroad. What do you think they have meant by travel allowance? I have made s ... (show full quote)
I would rather suspect that this is with regards maybe travel card for public transport or maybe a car allowance rather than a company car. The reason they separate is probably to highlight that it is an allowance and not income, this makes it cheaper for the company (and you slightly), but the main saving for the company is that since it is not income it is not included as pensionable income. For example, if the company offers you a company car then the tax authorities count this at a calculated amount as equivalent to a certain additional income that should be taxed, and your company would also pay public and company contributions to pension on that, if it is an allowance then they do not pay any pension contribution with regards that amount. (it is cheaper for the company).

It is not usual for the normal business travel expenses to be included in contracts but rather in company policy documents. If the employer does not pay daily allowance when you travel (traktamente) as a matter of policy, then you can include the total amount on your annual tax declaration, but stick to the maximum in the tax table. wink.gif
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yet another brit
post 26.Aug.2015, 10:33 AM
Post #4
Joined: 5.Jan.2013

Depending on which company you are working for, and what agreements they are signed up to - you might want to check whether they enroll their high-income staff in a "10-taggare" pension program. Last year, the threshold for eligibility was 569 tkr annual salary. This equates to roughly 46600 per month ["roughly" because of holiday pay etc]. What I am suggesting is that you should find out if such a threshold exists in your company, and if so, get your base salary over that threshold. Your pension plan will then be better.

The union should know what agreements the company has.

And as per others comments - putting money you have paid tax on into a private pension fund is asking for more tax. The events of this week notwithstanding, invest it yourself in an ISK or in bricks-and-mortar.
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Cenk
post 26.Aug.2015, 05:58 PM
Post #5
Location: Skåne
Joined: 25.Aug.2015

Thank you guys for the very detailed answers.

Since I am planning to stay only a couple of years in Sweden, I have no retirement plan there. I already have a pension plan and years spent in Sweden could also be counted towards my pension in the home country.

I am trying to maximize the income I will get while in Sweden to at least make it worthwhile that I am moving to a new country.

I will discuss with the employer if they can add the extra pension fund into my salary even if it cannot be the same amount considering that they will be paying taxes for it.

Regarding travel allowance it makes more sense that they have meant covering my everyday commuting expenses. I assume that they already have a company policy regarding covering international travel expenses for business.

Thanks again,
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animesh
post 27.Aug.2015, 10:54 AM
Post #6
Joined: 27.Apr.2008

@ yet another brit ,'
"
What I am suggesting is that you should find out if such a threshold exists in your company, and if so, get your base salary over that threshold. Your pension plan will then be better
"

What are the benefits of this?
Do you have some links on the details.

Thanks
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yet another brit
post 27.Aug.2015, 11:27 AM
Post #7
Joined: 5.Jan.2013

QUOTE (animesh @ 27.Aug.2015, 09:54 AM) *
@ yet another brit ,'"What I am suggesting is that you should find out if such a threshold exists in your company, and if so, get your base salary over that threshold ... (show full quote)


Some programs give an enhanced pension not just from the 10-base-unit threshold, but from 7.5-base-units [I'm translating "basbelopp"]. The effect of this is that [assuming your company participates] the pension plans take an effective jump as you go past the threshold.

http://www.ptk.se/products/files/alternativ_itp_2015.pdf
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Cenk
post 22.Sep.2015, 11:55 PM
Post #8
Location: Skåne
Joined: 25.Aug.2015

In case I accept my employer's offer for them to contribute to my private pension, do you think I can get the money out of the pension system when leaving Sweden? I am planning to stay only a couple of years and I don't really want this money to be wasted. In my country this is totally possible with only a single downside which is you get whatever you have contributed so far with no interest.
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fikaloverr
post 29.Apr.2017, 04:28 PM
Post #9
Joined: 29.Apr.2017

QUOTE (Cenk @ 23.Sep.2015, 12:55 AM) *
In case I accept my employer's offer for them to contribute to my private pension, do you think I can get the money out of the pension system when leaving Sweden? I am pla ... (show full quote)


Hello Cenk, Did you get an answer to this. I am in a similar situation.
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Cenk
post 17.Jun.2017, 10:18 AM
Post #10
Location: Skåne
Joined: 25.Aug.2015

QUOTE
Hello Cenk, Did you get an answer to this. I am in a similar situation.
Not really. But at the end, I had no extra contribution to my pension plan from my employer. I am getting whatever every Swede in my company gets.
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