What are deductibles?

Self-contributions are social contributions that you operate individual firm must pay on the income of active business activity. Since you as the owner of an individual company make your own withdrawals to pay your salary, you also need to pay your social security contributions yourself, which in an individual company are called self-contributions. These contributions finance your pension, health insurance and parental insurance, among other things.

The deductibles are mandatory for the part of your income generated from your active business. For income that is considered passive, a special payroll tax is applied instead.

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How are deductibles calculated and how much should you pay?

For the 2024 tax year, your own contributions total 28.97% and are calculated on the surplus from your active business activities. In the world of accounting, deductibles are counted as an expense but should not be posted. This is because the deductibles do not belong to your firm but to your private income taxes.

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Reduction of own contributions

If you as an entrepreneur pay the full deductible fee, you have the opportunity to receive a 7.5% reduction for income up to SEK 200,000, provided that your business income exceeds SEK 40,000. The maximum reduction you can get is 15,000 kr.

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Flat-rate deductions for own contributions

When you run a sole proprietorship, both deductibles and the special payroll tax are deductible on your tax return. However, since deductibles are calculated on your final result, which is difficult to know in advance, and to avoid complicated calculations, you can make a flat deduction in your nutrition supplement (NE), which in normal cases can be a maximum of 25% of the income before the deduction.

After this, you will be notified via your final tax slip of the actual deductibles for the year. For the next tax year, you then need to adjust this deduction by returning it to taxation and counting it against the fees charged to you under the final tax decision for the current tax year.

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What fees are included in the deductibles?

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The deductibles are not really a tax, but a composite of several taxes. The total charge of 28.97% includes the following fees and taxes:

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• The old-age pension contribution is 10.21% of income. This contribution contributes to your future pension.
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• The survivor's pension fee is set at 0.60%, and contributes to the financial protection of survivors.
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• The health insurance contribution on 3.64% covers parts of the health insurance system.
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• The Occupational Injury Charge, which is 0.20%, is used to fund compensation in the event of work-related injuries and illnesses.
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• The parental insurance contribution on 2.60% funds parental leave and related benefits.
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• The labor market fee is minimal, only 0.10%, and goes to labour market policy measures.
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• General payroll tax accounts for 11.62% and is a levy that goes to general government funds, but in practice works like a social security levy.

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Do not forget to notify changes in income

To avoid paying too much or too little in taxes, you should report changed income to The Tax Agency. This ensures that you pay an accurate amount of tax during the year and avoid unexpected tax liabilities.

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Quarantine days and health insurance contribution

As an owner of an individual company, you can choose between 1, 14, 30, 60 or 90 days withdrawal period, that is, the time you are left without sickness benefit if you are unable to work due to illness. For the income year 2024, the contribution of health insurance for individual entrepreneurs and employees is established based on the income related to the price base amount and the number of selected quarantine days. The health insurance contribution, which is part of the total deductible contributions, is adjusted according to the number of days you choose to stand without compensation in case of illness - that is, your withdrawal period. The more quarantine days, the lower the fee will be:

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• For a one-day withdrawal period, the fee is 3.77%.
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• If you choose 7 quarantine days, the fee is reduced to 3.64%.
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• For 14 quarantine days, the fee is set to 3.53%.
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• If you choose 30 quarantine days, the fee will drop further to 3.33%.
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• For those who choose 60 quarantine days, the fee is 3.08%.
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• And finally, for a long withdrawal period of 90 days, the fee is 2.91%.

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These percentages apply to earnings up to 10 times the price base amount at the start of the year. For income exceeding this limit, a uniform health insurance contribution of 3.64% is applied. This scale clearly shows how the choice of cut-off date affects the health insurance contribution and gives individual traders flexibility in planning their contributions and financial health.

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Summary

Understanding and managing self-fees is crucial for the individual trader. By taking advantage of available deductions and making accurate declarations of income changes, you can optimize your tax situation. It is also important to consider how the choice of quarantine days affects your health insurance contribution. By navigating these aspects effectively, you can ensure a sustainable financial foundation for your individual firm.

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