Example of Salary Taxation Through PAYE
Assumptions: Income tax (Direct - 100%), Employer social fee (indirect - 31.42%)
From a pay of "100," the Employer first pays "32" in Income tax (direct - 32%); on top of that, the Employer pays an additional "31.42" in Employer's social fees (indirect - 31.42%).
Thus, from a pay check of "100," 63.42/131.42 (i.e., 48.3%) is paid as taxes, although the employer's contribution is a fee for the employee's adherence to the Swedish social security scheme. The effective rate may be lowered by, for example, earned income tax credits and private retirement savings contributions.
Read more about this topic: Taxation In Sweden
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