Taxes - How do we work with them in Sweden? - Gigapay

Taxes – How do we work with them in Sweden?

“There was death and taxes, and taxes was worse, because at least death didn’t happen to you every year.” – Terry Pratchett, Reaper Man (1991)

Although we don’t believe that death is better than taxes, we acknowledge that most people would rather minimize the time spent on administering their taxes. However, a big part of handling salary payouts to giggers and freelancers involve handling taxes correctly. In fact, this is one of the biggest reasons why people and companies use Gigapay. Therefore it is of great importance for us to reduce your administrative work as much as possible while also ensuring that everything is declared correctly – so that we can continue being entrusted with this responsibility. Below we will outline some of the work that Gigapay handles surrounding taxes.

Taxes in Sweden

In Sweden, there are three taxes that affect the payouts carried out by Gigapay. These are: (1.) VAT, (2.) employer fees, and (3.) income tax. We will go through each of these briefly in the section below.

VAT

VAT, or Value-Added Tax, is a tax that affects most goods and services that are being sold or bought. When a freelancer or gigger use Gigapay, we will add 25% on top of your invoice, which their company customer will pay. The company customer will later be able offset the VAT against VAT that they may receive from selling their own products or services. In other words, this is not viewed as a cost for companies.

Social fees 

Employer fees are paid based on the invoiced amount (excluding VAT) and less Gigapay’s fee. The actual employer fees varies depending on the age of the freelancer or gigger. However, for most people we declare and pay 23.91% of the invoiced amount to the Swedish Tax Authorities. This corresponds to 31.42% of the gross salary that employers are responsible for their employees.

Income tax

Finally, we have the income tax. This is the tax that most people are familiar with in regards to receiving salaries. In accordance with recommendations from the Swedish Tax Authorities, Gigapay uses a fixed tax rate of 30%. If too much tax has been paid in, you will be able to claim tax returns by the end of the tax season.

As a company whose bread and butter is to handle taxes correctly we constantly work towards ensuring that taxes are handled and paid in accordance with any applicable laws and regulations at any given time. Therefore we have regular contacts with the Swedish Tax Authorities and follow their directions to ensure that anyone using our services can feel safe and secure.

Please feel free to reach out to us at Gigapay if you have any questions at: info@gigapay.co.

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