In this blog, we will touch upon Sweden and instances where temporary contractors are presented with NET pay calculations showing a flat % of tax (30% for example). These pay calculations look great, but you may not be told that there is likely to be a lot more tax to pay depending on your income level at the end of the financial year. Meaning these individuals will receive a huge tax bill.<\/p>\n\n\n\n
Sweden has an income tax and a state tax. Across the various municipals within Sweden, the income tax deductions range from 29% to 35% (you can already see where a flat 30% deduction by your employer or payroll company might be a problem). In addition to this, if you are anticipated to earn over 615,300 SEK (for those under 66 years of age) over the financial year, you will pay an additional 20% tax on any income that would exceed this income threshold<\/strong>. Therefore, if you\u2019re a higher earner, 30% deductions through the year will leave a huge shortfall for the employee to pay which can come as a very nasty shock!<\/p>\n\n\n\n Let\u2019s look at an example.<\/strong><\/p>\n\n\n\n If an individual in a month earns a taxable salary of 70,000 SEK (840,000 SEK for a full 12-months), 30% flat tax would be 21,000 SEK paid per month or 252,000 SEK<\/strong> total tax paid over a 12-month period.<\/p>\n\n\n\n In reality, if the individual is in Malmo and earned a salary of 70,000 SEK per month (840,000 SEK for a full 12 months), the income total tax would actually be 266,881 SEK as well as an additional 44,940 SEK due to some of the income falling over the threshold giving a total tax due of 311,821 SEK<\/strong> for the year!<\/p>\n\n\n\n In summary\u2026<\/p>\n\n\n\n Deducted through the year (based on 30% flat tax deductions) = 252,000 SEK<\/strong><\/p>\n\n\n\n Total taxes actually due = 331,821 SEK<\/strong><\/p>\n\n\n\n Difference to pay at the end of the year of 59,821 SEK !<\/strong><\/p>\n\n\n\n For temporary workers that are new to Sweden and expect their employer to account for deductions in full – this is a lot of money to find after the financial year is closed<\/p>\n\n\n\n Don\u2019t get caught out. Something may look attractive initially, but always look deeper to make sure that your deductions through the year aren\u2019t going to leave you substantially short.<\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" In this blog, we will touch upon Sweden and instances where temporary contractors are presented…<\/p>\n","protected":false},"author":2,"featured_media":4702,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,6,9,11,16],"tags":[41,31,38,47,30,42,32,49],"class_list":["post-4703","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-contractors","category-eu","category-international","category-legislation","category-tax","tag-compliance","tag-contracting","tag-eu","tag-europe","tag-sweden","tag-tax","tag-temporary-employment","tag-umbrella"],"_links":{"self":[{"href":"https:\/\/libertybishopinternational.co.uk\/knowledge-hub\/wp-json\/wp\/v2\/posts\/4703","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/libertybishopinternational.co.uk\/knowledge-hub\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/libertybishopinternational.co.uk\/knowledge-hub\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/libertybishopinternational.co.uk\/knowledge-hub\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/libertybishopinternational.co.uk\/knowledge-hub\/wp-json\/wp\/v2\/comments?post=4703"}],"version-history":[{"count":1,"href":"https:\/\/libertybishopinternational.co.uk\/knowledge-hub\/wp-json\/wp\/v2\/posts\/4703\/revisions"}],"predecessor-version":[{"id":4704,"href":"https:\/\/libertybishopinternational.co.uk\/knowledge-hub\/wp-json\/wp\/v2\/posts\/4703\/revisions\/4704"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/libertybishopinternational.co.uk\/knowledge-hub\/wp-json\/wp\/v2\/media\/4702"}],"wp:attachment":[{"href":"https:\/\/libertybishopinternational.co.uk\/knowledge-hub\/wp-json\/wp\/v2\/media?parent=4703"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/libertybishopinternational.co.uk\/knowledge-hub\/wp-json\/wp\/v2\/categories?post=4703"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/libertybishopinternational.co.uk\/knowledge-hub\/wp-json\/wp\/v2\/tags?post=4703"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}