Before 2025, it has been decided that the tax on ISK savings will be regulated. After the National Debt Office determined the government loan interest rate, it is now clear that some people will receive a full 1,700 kroner in reduced tax next year.
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However, there are other ways that can be significantly more profitable than saving money in an investment savings account, so-called ISK.
In a press release, Länsförsäkringar’s pension economist reports, Trifa Chirehthat a calculation she made shows that salary switching can be significantly more profitable for your finances, above all over time.
– The calculation shows that salary exchange gives a 34 percent higher payment per month compared to ISK, which can give thousands more per month, she says in the press release.
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In an interview with News24 Chireh develops important details for you who are considering starting salary switching. She believes that salary switching is incredibly tax-advantaged and thus an attractive solution for many high-income earners.
– By changing salary, you can avoid more than half of the salary over SEK 53,600 being lost in tax. When you then retire, there is a good chance that the tax will be 30 percent instead of the approximately 50 percent that high-income earners pay today, she explains and adds:
– The return tax is also lower for pension savings than for other forms of savings, and that the employer can contribute an extra six percent of the amount that is exchanged, which can provide a further addition to the pension.
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Payroll? You have to think about that
But there are also details that are important to know in order to know how it affects savings over time, she believes.
– When it comes to salary changes, it is important to think about how flexible you want your savings to be. While salary switching can be very beneficial, it doesn’t mean that all of your savings should be through salary switching.
Instead, pension economist Trifa Chireh believes that pension savings via salary switching are often locked until you reach retirement age, which means that you cannot access the money if you need it earlier.
– Therefore, it is good to have a balance between a locked savings and a savings that you can access when needed, for example in an ISK deposit or capital insurance.
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Trifa Chireh is pension economist at Länsförsäkringar. Photo: Länsförsäkringar Press image
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“Gives SEK 1,500 more per month”
In the calculation she explains in the press release, she starts from a calculation example.
If your salary deduction for salary change is, for example, SEK 2,500 a month, this can be equated to a sum of SEK 1,800 of taxed money being placed in ISK savings.
“After 16 years of saving, the occupational pension payment, after income tax at 30 percent, would amount to SEK 4,400 a month for ten years. This can be compared with the savings of ISK, which gives 2,900 kroner per month. This means that the salary change gives SEK 1,500 more per month over ten years. In both cases, an annual real return of five percent is assumed,” they write in their calculation example in the press release.
This means that you who choose to switch wages can get SEK 1,500 more per month for ten years when you have reached your pension, compared to if you saved the money via ISK.
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Then you shouldn’t switch salaries: “Not as favorable”
However, Trifa Chireh emphasizes that it is not always advantageous to choose salary switching in relation to an ISK saving. A basic requirement for it to be beneficial is that you have a sufficiently high salary.
– Salary change is not beneficial at all for you who earn less than SEK 53,600 per month in 2025, because you will then miss out on a pension and it can also affect other benefits that are based on your gross salary, for example sick pay, parental pay and unemployment compensation.
But this is not the only setback you can face if you choose to pay-exchange with a “low” income.
– In addition, it will not be as favorable from a tax perspective. In such cases, it is much more beneficial to save in other forms, such as in an ISK account or in capital insurance, she concludes by telling Nyheter24.
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