The coronavirus has hit the industries that employ many young people the hardest, such as the service industry, therefore it is hoped this new proposal will enable a strong economic start for the worst affected industries across Sweden.
It is proposed that employers should pay 19.76%, instead of the usual 31.42% (a reduction of 11.66%) for the fees paid on compensation to people who, at the beginning of the year, have turned 18, but not 23 years old. The reduction is proposed to apply to the part of the compensation that amounts to a maximum of SEK 25,000 per calendar month.
The proposed reduction means reduced tax for companies of approximately SEK 7.5 billion in 2021, approximately SEK 9 billion in 2022 and approximately SEK 1.4 billion in 2023. The proposed is due to officially be announced in the upcoming Autumn budget and is set to come into force on 1 April 2021, lasting until 31 March 2023.
For more information on Swedish labour laws, tax, and payroll landscape, browse activpayroll’s Sweden Global Insight Guide: find background on Sweden’s global economic profile, major industrial sectors and common business practices.
Find more information and guidance on coronavirus support measures for businesses, employers, and employees, on the activpayroll latest news page.