According to Skandia, the number of Swedes who reach a salary that is sufficient for wage change in 2023 is estimated as a result of the higher cut-off point to approximately 812,500 people. That is roughly 50,000 fewer than in 2022 and almost 90,000 fewer than in 2021.
— It is the income base amount that is increasing at a rapid rate. We have a record increase this year and had an almost equal increase before, says Michael Enberg, business specialist at Skandia.
Plus business for the employer
Everyone who has a salary can, in theory, take advantage of the benefit of switching salaries if the employer agrees. The only thing required is an agreement with the employer to exchange part of the gross salary for extra provisions for the occupational pension.
There are also no formal obstacles to how large a percentage of the gross salary you may exchange for an occupational pension. But for it to be worthwhile, you cannot lower the gross salary below the break-even point. If you exchange salary so that you end up below the break-even point, the negative effect of reduced basis for public pension and public insurance will be greater than what you earn from the exchange, according to Enberg.
For the employer, salary change is a plus deal. It is roughly 6 percent cheaper to pay an occupational pension than to pay a salary to an employee.
“Almost all employers give the 6 percent to the employee,” says Enberg.
According to a report from the Inspectorate for Social Security earlier this year, it is estimated that 13-17 percent of high-income earners who benefit from salary switching use the benefit.
“For high income earners”
If this is true, the number who actually change wages ends up somewhere around 110,000-150,000 people. And in total, salaries are exchanged for perhaps SEK 5-9 billion per year, according to the inspection.
“It’s a good form of savings, but it’s rare,” says Michael Enberg.
— It is for high income earners and there are more men than women who can use salary switching. It has to do with the salary structure, he adds.
He points out, for example, how the average salary for a female doctor of SEK 49,800 per month means that many of them will fall below the break-even point next year. At the same time, the average salary for a male doctor is SEK 52,700, i.e. slightly above the breaking point.
Another example Enberg highlights is IT specialists, who generally miss the opportunity to change their salary regardless of gender. In that sector, the average salary for women is SEK 48,200 and SEK 47,500 for men.
“It is high time that the new government now makes a decision to make it easier for all Swedes to save for their pension,” says Enberg.