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I am discussing a job offer in Sweden and has been offered a base salary with taxable benefits added on top of that. I am happy with the take-home amount but I have the following concerns:

  1. What sort of taxable benefits could an Employer add to an Employee's salary?

  2. Is it within the law for an Employer to add taxable benefits to increase the take-home amount?

  3. How are allowances taxed in Sweden?

  4. Are there any restrictions to how much these allowances can contribute to the take-home amount? Ie, in an extreme case, can there be like a 50-50 split between the base salary and the total amount of taxable benefits?

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  1. In general, a taxable benefit is any form of compensation that you receive because of your job that isn't cash. Benefits ("förmåner" in Swedish) could be free lunches, travel cards, airline bonus program points, basically anything that's nice. There are some exceptions: some things that are nice aren't taxed, for example free coffee at the work place, and some things are explicitly free from tax or have reduced tax: most prominently "friskvård", wellness benefits, which up to a certain amount is tax free for the receiver. See Skatteverket.
  2. Yes, as long as they are properly taxed and accounted for.
  3. Up to a certain amount and during certain circumstances, allowances ("traktamente" in Swedish) are tax-free. Again, see Skatteverket.
  4. As long as everything is properly taxed and accounted for, you can receive your entire salary in marshmallows as far as Skatteverket cares.
  • Thanks! Does that mean a taxable benefit cannot be in cash? Based on my discussions with the company, I was told that these 'allowances' will be in cash on top of my base salary. From what I understood, they want to reduce the 31.42% tax on the base salary and make it up via an allowance. (which will have taxes accounted for). Does this make any sense? – fsociety Oct 23 '18 at 12:12
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    The 31,42 % tax is not income tax (which is technically paid by you, although your employer does the actual paying), but "employer fees" (sv: "arbetsgivaravgifter") paid by your employer. However, they're supposed to pay employer fees for the entire worth of your compensation, inclucing any and all benefits. There may be special circumstances were this is not the case, but generally, no: employer fees are to be paid based on the market value of the compensation you receive for your work, no matter the form of this compensation. – Jobjörn Folkesson Oct 23 '18 at 17:19
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    Allowances ("traktamenten") are mostly counted as compensation for incurred costs and are not taxed, not by you (income tax) nor by your employer (employer fees). But there are strict limits on what counts as tax-free allowances, see earlier link. – Jobjörn Folkesson Oct 23 '18 at 17:22
  • Skatteverket outlines something called Gross Salary Deductions where "a gross wage tax deduction means that employees accept a lower gross salary in exchange for a benefit. The reduction means that taxes and employers' fees will be lower but may also have repercussions on the employee's sick pay, unemployment allowance, retirement, pre-school fee and more." Again does this 'exchange' refer to non-cash taxable benefits that you explained in your answer? – fsociety Oct 24 '18 at 3:40
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    An important sentence on that page is "A gross salary deduction does not reduce a taxable benefit value". As we've discussed, taxes are to be paid on the sum total of the compensation: cash wages, benefits, etc. However, the employer may have access to something that is worth the market value (the taxable value) to you but costs less for them. Or, perhaps, something that is worth more than the market value to you but costs only the market value (the taxable value) for them. Then this could be beneficial. In your case, I don't really see how it applies. – Jobjörn Folkesson Oct 26 '18 at 9:34

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