A guide to where our tax money goes and the pros and cons of a high tax society.
Sweden has a progressive income tax and income thresholds are regulated each year. For earnings above this threshold, you will also pay national income taxes, with the money going to the state.
Tax on an income up to approximately 625,800 kr is subject only to municipal tax. This is around 32 %, depending on where you live.
An income above 625,800 kr per year will be taxed an additional 20 % in national income tax.
These taxes apply to employment income only.
Where do our taxes go?
Swedish Public Spending can be broken down into 6 categories. The largest share, 42%, going to Social Protection. Education and General public services are both at 13%, 8% goes to Economic affairs, 3% to Public Order & Safety, 2% to Defence and the remaining 4% to other needs addressed by the nation. This includes police and fire services, law courts and prisons. It also covers sick leave, disability care, housing, social protection and unemployment benefits. In short, Sweden provides us with just about everything.
Reaping the family benefits
Sweden is one of the few countries in the world that uses taxes to provide financial support to every parent, no matter their income.
As a parent, you are entitled to an allowance (barnbidrag) of 1250kr per month per child. This continues until the child turns 16. Student allowance and loans are available after the age of 16. Among all the benefits of being a parent in Sweden are the 480 days of parental leave that everyone is eligible to take.
Whether you split the time with your partner or are a single parent, you will receive 80% of your income for 390 days of your parental leave. The remaining 90 days you will receive 180kr per day.
Healthcare, is it as good as we think?
Sweden is built up of 21 different regions (also known as landsting), and taxes found most public healthcare services. As of 2019, county councils now cover dental care costs for all residents up to the age of 23. After 23, the state subsidies dental care. In some regions dental care is covered until the age of 26. On top of dental care – care for older people, disabled care, school healthcare and mental illness support are also provided through Sweden’s healthcare system.
To learn more about Sweden’s first mental health ambulance follow this link
Did you know? The average life expectancy of a women in Sweden is 84 years old, and for a man 81. Sweden strives to promote good health for the entire population and due to this, Sweden has one of the highest numbers of older people in all of Europe – you can definitely say it pays to promote a healthy lifestyle!
Cons of the healthcare system
Every affordable healthcare system, has its flaws. Before my move from Canada to Sweden, I believed that Sweden offered free healthcare. I was in fact wrong! Patients pay for every doctor’s appointment or hospital visit, which usually costs between 200kr to 500kr (€19-€30) However, Sweden caps an individuals healthcare fees at 1150kr per year.
For newcomers to Sweden, booking an appointment 3-6 weeks in advance may feel absurd. Healthcare providers usually encourage patients to book well ahed in order to secure an appointment.
My personal experience with the Swedish healthcare system has been somewhat neutral. I have felt neither overwhelmingly happy about my healthcare guidance nor disappointed. One thing I will say is that Sweden does not offer the “free” healthcare system that people so commonly portrayed.
Education in Sweden
Among the many brilliant ideas Swedes have come up with such as Seat belts, Spotify, IKEA – the list is endless! – the one thing that really struck my eye was the subsidised pre-schooling.
With low-income families paying little to nothing and higher-income families paying a maximum of 1425kr per month (around €135/month) it gives every parent the chance to send their child to preschool!
In 1992 the Independent School Reform made it possible for families to send their child to any school, state-run or independent. The law states that children have an equal right to education regardless of gender, ethnic or political background and economic status of their families. By providing free education from age 6 to 19, the education system creates an environment where everyone is welcome.
Alongside free schooling, books, bus passes and meals are provided for each and every student until they are in their last year of high school. If a student chooses to continue their education, free post-secondary is also provided to any EU national.
No matter your age, as a resident of the European Union, you can study to as many bachelor degrees, masters programs and PhD’s as you would like – without paying a dime (for those North Americans who know what a dime is!)
Sweden is very unique in the sense that the state finances all education through taxes, while both public and private-owned schools compete for future prospect students.
Other tax money benefits…
Moving to Sweden is in my opinion, a step in the right direction, no matter where you come from! When you first arrive the authorities asign you a personal identification number, which makes you a resident of Sweden for as long as you live and work here.
The government founds Svenska för invandrare, or commonly known as “Swedish for Immigrants” and offers free Swedish courses for all who are interested in learning the language. Although the classes have mixed reviews, I think it is a great way to start integrating yourself into Swedish culture and life. After all, Swedish is the national language of Sweden!
The 3 levels of tax: State, Regional and Municipal
In Sweden, there are three (3) separate government bodies, State, Regional and municipal. The state taxes we all pay in Sweden go towards social security, higher education, national infrastructure, military defences, Sweden’s legal system, migration and a small fraction of the healthcare system. Regional taxes pay for all other aspects of health care and Swedens regional infrastructure. Municipality taxes pay for city schools and other localised facilities.
For generations, majority of Swedes have accepted the high tax society they call home.
“What is perhaps more surprising to most people than Sweden’s high tax rates, is the average Swede’s tolerance and respect for the taxation system and the government agency that handles it.”
Although the tax percentage is high, Swedes have, in my opinion, one of the best qualities of life. No matter the circumstance, Sweden continues to look after its people and provide them with the best possible care.
For more information regarding Sweden’s tax system or frequently asked questions please refer to the links below.
