How much tax is withheld from the salary?

The preliminary tax is 30 percent unless we have received a tax adjustment decision from Skatteverket. With a tax adjustment decision, we apply your decided tax rate.

Do I have to declare tax myself?

You submit a regular private tax declaration. Since your salary is reported to Skatteverket, the amounts are pre-filled, and you do not need bookkeeping or a business supplement.

Do I get a pension and sickness benefit?

Yes. Since the remuneration is paid out as salary, it forms the basis for both pension and sickness benefit.

Tax and Deductions

Tax and social security contributions as an umbrella employee – how much you get from your invoice

From invoice amount to money in your account: this is how fees, employer contributions of 31.42 percent, and preliminary tax are deducted when you invoice without a company.

Markus Aglander25 August 20266 min read

Short summary

VAT never belongs to you – it is reported to the Swedish Tax Agency (Skatteverket) and deducted immediately.
Pay2me takes 1.95–5.95 percent of the invoice amount depending on its size.
On the remaining amount, employer contributions of 31.42 percent are paid before the gross salary is calculated.
From the gross salary, individual preliminary tax, usually 30%, is deducted, unless you adjust this level yourself.

The most common misconception among new freelancers is that the invoice amount is the salary. It never is, neither with your own company nor as an umbrella employee. Here is the entire chain, step by step, when you invoice without a company via Pay2me.

Step 1: VAT is deducted

VAT is a tax that you collect for the state. If you invoice 50,000 kr plus 25 percent VAT, the customer pays 62,500 kr, but the 12,500 kronor in VAT is reported to the Swedish Tax Agency (Skatteverket). The basis for your salary is always the amount excluding VAT.

Step 2: The fee to Pay2me is deducted

The fee depends on the invoice amount: 5.95 percent up to 35,000 kr, 3.95 percent between 35,000 and 100,000 kr, and 1.95 percent over 100,000 kr. The fee includes invoicing, reminders, payroll administration, insurance, support, and reporting of VAT, social security contributions, and preliminary tax to Skatteverket.

Step 3: Employer contributions of 31.42 percent

What remains is a salary cost margin. Employer contributions are 31.42 percent of the gross salary and finance, among other things, pension, sickness insurance, and parental insurance. The gross salary is therefore calculated by dividing the remaining amount by 1.3142.

Step 4: Preliminary tax is deducted from the gross salary

Finally, preliminary tax is deducted, just like on any salary. What you receive in your account is therefore net salary. Preliminary tax is individual and is based on your annual expected income. According to practice, we are obliged to deduct 30 percent, unless we have received other instructions from you.

If you have a tax adjustment decision from Skatteverket, send it to us, and we will adjust the tax rate. If you are concerned that you will need to pay more than 30 percent due to a higher annual income, you can easily adjust the level upwards in your account settings with Pay2me, so that no residual tax awaits around the corner.

Expenses increase your net payout

Costs related to the assignment – materials, travel, tickets – you report as expenses with a receipt. They are paid out without deduction for VAT, tax, and social security contributions, as you have already incurred the cost. Whether onward invoicing of expenses has occurred (according to any agreement with your client) does not affect the possibility of having the expenses paid out.

Your tax declaration becomes simple

We report every payment to Skatteverket, so the amounts are pre-filled in your tax declaration. You do not need an NE supplement or any bookkeeping.

Tax adjustment provides the correct tax immediately

Do you think 30 percent is too high for you? Apply for a tax adjustment with Skatteverket and send the decision to us, and we will apply your tax rate before the next payment.

Frequently asked questions about tax as an umbrella employee

Employer contributions are 31.42 percent of the gross salary and are paid by Pay2me as the employer, with money from the invoice amount. Lower contributions may apply to certain age groups according to the Swedish Tax Agency's (Skatteverket) rules.

Markus Aglander

Founder

Writer at pay2me focusing on invoicing, finance and self-employment.

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