Every eighth Swede today reaches the limit for paying state income tax: SEK 51,000 a month.
The limit was to be raised at the turn of the year, but it was stopped by the government after pressure from the opposition.
This has caused Swedish Business and Industry and other organizations close to the government to kick back.
DO NOT MISS: The expert breaks the myth: Increased income AFTER retirement
High salary? Common trick
The marginal tax for high income earners is approximately 50 percent.
In order to escape the increased tax, it is therefore increasingly popular to switch salaries.
This means that you let the employer put away part of the gross salary in the occupational pension instead. It is a form of savings that lowers the salary in the tax table, which is a bad idea if you want to receive a high general state pension. That is the case for the vast majority.
But for high earners who are already hitting the ceiling for public pension payments, it can be a genius move to put the money into the occupational pension instead.
By voluntarily lowering their salary, the wage earner avoids the 50 percent tax rate and instead receives the much more generous 32 percent average municipal tax.
Locked money
Those who need the money before the day they retire should of course not lock the money in the occupational pension.
That form of savings can compete with the ISK account because it is so advantageous. The ISK tax has been successively increased by social democratic governments in recent terms of office.
Reduced tax next year
This year, occupational pensions are taxed at 0.37 percent, which can be compared with approximately 1.1 percent for endowment insurance and ISK.
Timbro and other organizations that are close to the government think that the tax should have been lowered already in 2023 or 2024 – but now it looks like it will only become a reality in 2025.
According to the government’s proposal, the tax-free ISK savings only apply to amounts up to SEK 300,000.
The savings expert
Today’s industryhave spoken to the savings bank Shoka Åhrman. She thinks you should change your salary if you have a salary that exceeds the limit for state tax.
– Even if next year it will be possible to save tax-free in ISK up to SEK 300,000, there are advantages to salary switching because you will likely get a positive tax effect by deferring the tax, she tells the newspaper.
For those who do not earn enough to pay state income tax, do not exchange wages.
It lowers the wage level, which lowers the public pension. Then it is much wiser to deposit the money into an ISK account. Especially since it will probably be tax-free up to SEK 300,000 next year.
Read more about finance
This is how big hidden profits your Ica store makes: “Totally legal, but”
The expert breaks the myth: Increased income AFTER retirement
Wrong way: Risk of higher interest rates instead of lower ones