Taxes in Sweden

Written by Lais Cattassini Moderated by Oleksandra Dosii

Lais Cattassini

Lais is a Brazilian journalist and copywriter with over 17 years of experience, writing about things she knows really well (travelling, cinema, social media trends) and things she loves learning about.

Oleksandra Dosii

Oleksandra is a dedicated marketer with a passion for growing HR-tech products. She believes content marketing is about delivering high-quality content that provides value—not just generating leads. Since 2016, Oleksandra has been involved in tech talent relocation.

Last update: September 16, 2024

Next update: Scheduled for February 1, 2025

In Sweden, the tax system is characterised by high rates and a strong emphasis on social welfare. The municipal tax is a flat rate imposed by local municipalities, and it varies between regions, typically ranging from about 29% to 35% of taxable income. In addition to municipal tax, there is a national income tax that applies to higher incomes. For income exceeding a certain threshold (around SEK 598,500 for 2024), an additional 20% tax rate applies.

Employees and self-employed individuals also pay social security contributions. These are generally included in the overall tax rate and cover benefits like pensions, health insurance, and unemployment benefits.

The Swedish tax system is progressive, meaning that higher income levels are taxed at higher rates. This is designed to support Sweden’s comprehensive welfare system, which provides high-quality public services such as healthcare, education, and social security.

What is the income tax in Sweden?

Sweden's income tax consists of two main components. The Municipal Tax (Kommunalskatt) is a local tax levied by municipalities and regions. The rate varies depending on where you live, but taxes generally fall between 29% and 35%. Every taxpayer pays municipal tax, regardless of income level. The National Income Tax (Statlig Inkomstskatt) is a tax imposed by the central government on high-income earners. The rate is 20%, and it only applies to income exceeding a certain threshold. In 2024, the threshold is SEK 598,500.

Social Security contributions

Social security in Sweden is funded through contributions known as social fees (sociala avgifter). These contributions are mandatory and cover a wide range of social benefits.

Employees pay 7% of their salary as a pension contribution, up to a maximum income ceiling (SEK 598,500, approximately €54,000, per year in 2024). This contribution is deducted directly from the employee's salary and goes toward the public pension system. Apart from pensions, employees don’t directly pay for other social benefits. However, these are indirectly covered by employer contributions.

Employers in Sweden bear the bulk of social security costs. They are required to pay substantial contributions on behalf of their employees, amounting to approximately 31.42% of each employee’s gross salary. These contributions fund old-age pensions, health insurance, parental leave, sickness benefits, unemployment insurance, and work injury insurance.

The employer's contribution is distributed among several funds:

Self-employed individuals in Sweden must pay their own social security contributions, which are similar to those of employers. These contributions are around 28.97% of their income, and they cover the same benefits as employees, including pensions, health insurance, parental leave, and unemployment benefits.

However, self-employed individuals can choose to opt out of certain parts of the social security system, such as work injury insurance, depending on their needs and type of work.

Both employee and employer social security contributions apply only up to a certain income limit, known as the income ceiling. In 2024, the ceiling is approximately SEK 613,900 (approximately €54,000) per year. Earnings above this threshold are not subject to social security contributions for pensions, though other taxes may still apply.

Online tax calculator for taxes in Sweden

To calculate income tax in Sweden, you need to account for both municipal and national taxes, as well as social security contributions. You can calculate your net income here.

Annual tax returns in Sweden

Most taxpayers in Sweden receive a pre-filled tax return. This form, known as the Inkomstdeklaration, includes all the essential income details, deductions, and taxes paid for the year. The Swedish Tax Agency gathers this information from various sources, including employers, banks, and government agencies. If there are any discrepancies in the form or if additional information needs to be provided, you can easily make corrections.

If everything is correct on the pre-filled return and you have no additional income or deductions to report, you can simply confirm the return. You can approve the return by sending a simple confirmation via SMS or automated phone service. If you need to make changes or corrections, the online portal is the best way to file.

The tax year in Sweden is the same as the calendar year, running from January 1 to December 31. The deadline to file the tax return is usually in early May.

Once your tax return is filed, Skatteverket calculates whether you owe additional taxes or are due a refund. Refunds are usually processed and paid out by June if you file early, and August if you file later. If you’ve underpaid, you’ll receive a notification of how much you owe, and you will have until November 12 to pay any outstanding taxes. Late payments may incur interest charges.

If you’re self-employed, the process is similar, but you need to report additional details such as business income and expenses. You will also be responsible for paying both employee and employer social security contributions. These payments are typically due on a quarterly basis, but the final settlement is included in your annual return.

How to pay less taxes

While tax rates in Sweden are relatively high, the system offers several deductions and allowances that can help individuals reduce their taxable income and, consequently, the taxes they owe.

Basic deduction (Grundavdrag)

Every taxpayer in Sweden is entitled to a basic deduction that reduces taxable income. The amount varies depending on income but typically ranges from SEK 14,000 to SEK 36,700. This deduction is automatically applied, meaning that you don’t need to actively claim it.

Work-related travel expenses (Reseavdrag)

If your daily commute to work exceeds SEK 11,000 per year, you may qualify for a commuting deduction. You can claim deductions for public transportation costs, driving your own car to work (currently SEK 25 per 10 kilometres), carpooling and certain other travel arrangements.

Interest on loans (Ränteavdrag)

One of the most common deductions in Sweden is the interest deduction for loans, including mortgages. You can deduct 30% of interest payments on loans up to SEK 100,000. For any interest payments exceeding SEK 100,000, the deduction rate drops to 21%.

Charitable donations (Gåvodelavdrag)

You can receive a deduction for approved charitable donations. The deduction is 25% of the amount donated, with a minimum of SEK 2,000 per year and a maximum deduction of SEK 1,500 (which means you can donate up to SEK 6,000).

Home improvement deduction (ROT-Avdrag)

If you own a home and hire someone to perform renovations or repairs, you may be eligible for a ROT deduction. This deduction allows you to deduct 30% of labour costs (not materials) up to a maximum of SEK 50,000 per person per year.

Similar to the ROT deduction, the RUT deduction allows you to deduct 50% of the cost of household services, such as cleaning services, childcare, lawn care, and moving services.

The maximum RUT deduction is SEK 75,000 per person per year. For households with two adults, both individuals can claim the deduction.

Pension savings (IPS)

Contributions to your own pension plan, if allowed, reduce your taxable income, thus lowering your tax burden.

This primarily applies to self-employed individuals or those without employer-based pension plans. For these individuals, contributions to a private pension plan can be tax-deductible up to a certain limit.

Loss carryforward (Förlustavdrag)

If you have made capital losses (for example, from selling stocks at a loss), you can deduct 70% of the loss against capital gains from other investments or future gains. If you cannot use the deduction in the current year, you can carry it forward to offset future gains.

Talk to a tax advisor

Consulting with an advisor or an accountant can help you ensure you are paying the correct amount of taxes and using deductions in your favour. For expats, services like these can be even more beneficial, as they help foreigners overcome language barriers and the complicated tax regulations of a new country.

Other Swedish taxes

Value-added Tax (VAT or Moms)

VAT is a consumption tax added to most goods and services sold in Sweden. Businesses are responsible for charging VAT on their sales and remitting it to the government.

In Sweden, the standard rate is 25%, the reduced rate is 12%, and a 6% rate applies to specific goods and services, such as food, books, and public transport.

Consumers indirectly pay VAT through higher prices on goods and services.

Capital gains tax

This is a tax on profits from the sale of capital assets, such as stocks, bonds, property, and other investments. 30% of the gain is taxed when selling securities or mutual fund units at a profit.

The taxable capital gain on property is calculated as the sale price minus the purchase price and related costs (renovations, agent fees). Taxpayers pay 22% of the capital gain on real estate sales.

Property tax (Fastighetsavgift)

This is a tax on the ownership of residential property. It is not based on the market value of the property but on the assessed value determined by the tax authorities, which is often lower than the market value.

There is a fixed rate of 0.75% of the taxable value of residential property, with a maximum cap of approximately SEK 9,287.

Property owners, including private homeowners and landlords, are responsible for paying property tax annually.

Property transfer tax (Stämpelskatt)

This is a tax paid when real estate changes ownership, usually as part of a sale or inheritance. The tax rate is 1.5% for individuals and 4.25% for legal entities.

Tax treaties with Sweden

Tax treaties ensure that individuals and businesses do not pay taxes twice on the same income in both Sweden and another country. They cover employment income, business income, dividends, capital gains, pensions, and social security payments.

Learn more about Sweden’s treaties here.