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Enskild firma and register as my own employer

Taxes and Salary

post 25.May.2012, 04:32 PM
Post #1
Joined: 24.Jan.2012

I live in Arvika (I already have a personnummer) and I am thinking in creating an enskild firma here.
I work as an IT consultant for some UK/USA/Spain companies and I know that it works this way:
-> Income - Expenses = Profit
-> Profit - 30% (Social security) = Taxable
-> Taxable - 30% (taxes) = Real income

But, today a friend told me that if I register as my own employer and as employee who works for an employer ... Numbers will be "better"...

Can somebody explain me how it works?

I probably gonna hire some accountant here to help me with all this information, but I didn't found anyone yet and skatteverket in Arvika wasnt very helpfull.. they told me that they dont know about "taxes" and they give me a phone number (from a Skatterverket taxes deparment I presume) to call for taxes information...
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post 25.May.2012, 04:48 PM
Post #2
Joined: 10.Dec.2010

Yes see an accountant. You must pay social contribution then your income tax. a very rough rule of thumb is you will pay just under 50 percent of your earnings to the government.
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post 26.Dec.2012, 11:50 PM
Post #3
Joined: 26.Mar.2011

As a rule of thumb, if you register as a sole trader (enskild firma) you cannot be employed by your firm (this can only be done in a limited liability company - AB).
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post 11.Jan.2013, 02:25 PM
Post #4
Joined: 11.Jan.2013

As I've understood it you'll need to change to an AB to be your own employer but it only makes real difference if your liable for the national tax level (payable at approx 35000sek a month salary).

As an AB you can chose to keep your salary below the national tax level and pay a dividend with the excess at the end of the year, which is taxed (roughly) as capital at 30%.
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post 11.Jan.2013, 02:37 PM
Post #5
Joined: 1.Jun.2008

At website, in the Swedish version, click Driva -> räkna ut -> skatt. There you have a tax calculator where you can select enskild firma (or aktie bolag) to calculate more accurately.

Imo it is better to start with enskild firma, and once your profit level becomes quite high such that you want to keep the money inside the company, then you can convert to AB.
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post 12.Jan.2013, 12:25 AM
Post #6
Joined: 24.Dec.2009

QUOTE (purplemurple @ 11.Jan.2013, 02:25 PM) *
As I've understood it you'll need to change to an AB to be your own employer but it only makes real difference if your liable for the national tax level (payable at ap ... (show full quote)

An AB that is a close AB (to use UK terminology), ie. it has only a few owners, then you can only pay dividends to a certain level and then pay 20% tax on that dividend. Beyond that, the dividend payment will be considered salary and social security "insurance" fees will have to be paid.

There are other differences between being self employed and an employee of your own AB.

As was mentioned, if self employed then you are not an employee, but the owner of the company.

An employee can be given a number of tax excempt benefits that a self employed individual cannot receive.

Amongst other things this is for example costs for gym cards and other "friskvårds" benefits. There are no hard and fast rules, but it is generally accepted that such benefits can go up to 4000 kr.

For a self employed you would have to pay social security and income tax before spending it on the gym.

For the AB, the costs would of course reduce overall profits.

An AB can also rent a room in eg. your apartment as office. A self employed business cannot do that without satisfying a number of rules that the vast majority of us won't come close to be able to meet.
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