Update README.md #7
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Very nice contributions!
Do you think it would worth mentioning parental leave also?
FKassan only covers up to 80% of a ceiling which is lower than general salaries from IT. Maybe would be nice to consider that, most companies in Sweden also raises the ceiling based on the employee salary.
| @@ -415,6 +415,8 @@ At some point, you will likely want to pay yourself a salary. The outline of the | |||
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| 5. At the beginning of the following month, send in the employer declaration to Skatteverket, declaring how much salary you've paid out. | |||
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| 6. The month after that you need to pay Skatteverket in the income and employer taxes that you declared. | |||
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Can this be rephrased? Do you mean that the income taxes can be payed in the next month?
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Easier with an example?
You work in January and pay salary on the 25th like most companies. As an employer you have to report salaries by mid February to Skatteverket. Then you have to pay the employer contributions and income tax that correspond to that report by mid March
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Easier with an example?
You work in January and pay salary on the 25th like most companies. As an employer you have to report salaries by mid February to Skatteverket. Then you have to pay the employer contributions and income tax that correspond to that report by mid March
Got it! What about:
"You only have to pay the taxes to Skatteverket the month after you paid the salary. Example:
You work in January and pay salary on the 25th like most companies. As an employer you have to report salaries by mid February to Skatteverket. Then you have to pay the employer contributions and income tax that correspond to that report by mid March."
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But you pay the taxes 2 months after you pay the salaries. But you report them 1 month after.
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Actually, i think i am wrong. I think you both have to report and pay the taxes 2 months (actually about 1.5 months) after you pay them. I get confused by this delay so i always report them straight after the end of the month.
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Actually, i think i am wrong. I think you both have to report and pay the taxes 2 months (actually about 1.5 months) after you pay them. I get confused by this delay so i always report them straight after the end of the month.
I think for salary paid in April, you are supposed to declare and pay the taxes by approximately the 12th of May.
Suggesting rephrasing the previous point from:
- At the beginning of the following month, send in the employer declaration to Skatteverket, declaring how much salary you've paid out.
to
- At the beginning of the following month, send in the employer declaration to Skatteverket, declaring how much salary you've paid out. The tax deduction and social fees should be paid to Skatteverket the same time as sending the employer declaration.
| @@ -471,17 +473,18 @@ In this section I've collected some learnings that I have found relevant and use | |||
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| ### Limited Liability Companies & Dividends | |||
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| As the owner and primary shareholder of a limited liability company, you can pay yourself dividends. These dividends, if they are below a certain threshold amount, will be favourably taxed at 20% of the amount. If you exceed the threshold amount, the excess will be taxed as income, which generally has a much higher taxation rate. | |||
| As the owner and primary shareholder of a limited liability company, you can pay yourself dividends. These dividends, if they are below a certain threshold amount, will be favourably taxed at 20% of the amount. If you exceed the threshold amount, the excess will be taxed as income, which generally has a much higher taxation rate. Dividends are signficantly lower taxed than the equivalent salary above the limit for state tax (brytpunkt för statlig skatt) and so if you salary is already above this limit then you will benefit hugely after tax by paying dividends instead. It is one of the major advantages of freelancing over being a consultant/employee for someone else. | |||
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"Dividends are significantly lower taxed compared to the equivalent salary above the limit for state tax (brytpunkt för statlig skatt). If this is your case, then you will benefit hugely after tax by paying dividends instead. It is one of the major advantages of freelancing over being a consultant/employee for someone else."
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I think this is a bit unclear - AFAIK dividends are lower taxed than both salary below and above the limit for state tax.
| As the owner and primary shareholder of a limited liability company, you can pay yourself dividends. These dividends, if they are below a certain threshold amount, will be favourably taxed at 20% of the amount. If you exceed the threshold amount, the excess will be taxed as income, which generally has a much higher taxation rate. Dividends are signficantly lower taxed than the equivalent salary above the limit for state tax (brytpunkt för statlig skatt) and so if you salary is already above this limit then you will benefit hugely after tax by paying dividends instead. It is one of the major advantages of freelancing over being a consultant/employee for someone else. | |
| As the owner and primary shareholder of a limited liability company, you can pay yourself dividends. These dividends, if they are below a certain threshold amount, will be favourably taxed at 20% of the amount. If you exceed the threshold amount, the excess will be taxed as income, which generally has a much higher taxation rate. | |
| As a rule of thumb, as long as you are within the threshold amount, it is preferable to increase the dividend payout rather than to increase your salary, and is one of the financial benefits of having your own company over being employed elsewhere. |
WDYT?
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Below the limit for state tax is a bit harder to quantify as you get direct benefits from that tax in the form of SGI and pension contributions.
README.md
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| Most employees will receive an employer pension (tjänstepension) from their employer and so it is important to account for this in comparisons if you start your own company. A normal rate for pension contributions is 4.5% of salary up to the state tax salary limit (brytpunkten) and 30% above that. However, if you run your own company then you can pay whatever you like from 0 to upto a maximum of 35% of your total salary. |
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"Most employees will receive an employer pension (tjänstepension) from their employer, so it is important to account for this in comparisons if you start your own company. A normal rate for pension contributions is 4.5% of salary up to the state tax salary limit (brytpunkten) and 30% above that. However, if you run your own company then you can pay whatever you like from 0 to a maximum of 35% of your total salary."
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