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I am trying to understand how to properly calculate income tax in Sweden.

Assuming a gross monthly income of 40.000 SEK and a municipality tax of 32.4% suggest tax of 12.960SEK.

Is it reasonable to assume that the net payment will be 40.000 - 12.960 = 27.040SEK?

The online calculators I tried using (e.g. Ekonomifakta) gave higher values for the net amount because after substracting the tax they add "earned income tax credit".

What exactly is this earned credit and do I get it every month or only at the end of each tax year?

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The "earned income tax credit" is called "jobbskatteavdrag" in Swedish and it's not easy to calculate. It lowers the tax on earnings from work, but not other income (mostly government payouts such as sick pay, parental leave pay, unemployment benefits, etc).

If I understand Skatteuträkningsbroschyren (the Tax Calculation Brochure) correctly, your jobbskatteavdrag will be 95 466.50 SEK minus 13 000 SEK (the grundavdrag for people with earnings of 348 900 SEK or above) times the municipality tax rate (32,4 % as per your question), which is 26 719.15 SEK.

Your total tax will then be (your earnings (480 000 SEK) minus the grundavdrag (13 000 SEK) times the municipality tax rate (32,4 %)) minus the jobbskatteavdrag (26 719.15 SEK), for a total of 124 588.85 SEK, on average 10 382.40 SEK per month.

Your employer will pay your tax for you, and they'll probably pay a bit more than what we've calculated here. All tax is calculated per year, and you don't have to apply for the credit - it is calculated automatically by the Swedish Tax Agency. The following year you will get a tax refund.

Here's more information about declaring taxes in Sweden.

  • Thanks for the information. Does this then mean my net payment would be 41.000-10.382= 30.618? I thought that my employer is paying tax in addition to this tax in terms of "Arbetsgivaravgif" – Trey Jun 5 '17 at 16:32
  • I've assumed a wage of 40 000 SEK, your income after tax would be 29 618 SEK. – Jobjörn Folkesson Jun 5 '17 at 16:33
  • Yes, your employer pays a fee (a tax) for hiring you, called arbetsgivaravgift - but it's on them, and not paid out of your wage. – Jobjörn Folkesson Jun 5 '17 at 16:35
  • Excellent thanks! Final question: when you say the tax might be "a bit more" how much do you mean? Is it reasonable to assume that my net will be around 28-29000? Could it also be less? Accepting the answer anyway. – Trey Jun 5 '17 at 16:41
  • Your net payout per month will probably be ~27000, but you can discuss it with your employer. If they pay too much tax you'll get it back next year, if you don't pay enough you'll have to pay the difference. Paying extra is not fun so usually employers pay a bit more than strictly necessary. Good luck and welcome to Sweden! – Jobjörn Folkesson Jun 5 '17 at 20:22

protected by Chris W. Rea Mar 14 '18 at 19:49

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