Temporarily reduced employer contributions – this is how it works
Companies in Sweden can now request reduced employer contributions for up to 30 employees. It is one of the government's support measures to support Swedish companies. How long does the reduction apply and how much can companies save? We describe how the support measure works.
Temporarily reduced employer fees are part of the Swedish government's support package to help companies affected by the effects of covid-19. Employers who make full use of the measure can receive a total reduction of SEK 636,000. Here are some common questions and answers to what the measure covers.
What does the proposal for reduced employer contributions mean?
To alleviate the economic consequences of the spread of the coronavirus the employers’ contribution is temporarily lowered for up to 30 employees per company and on the part of the salary that does not exceed 25 000 per month. The reduction means that companies pay only the retirement pension contribution of 10.21 percent, instead of the total employer contribution of 31.42 percent. This means a reduction of the employer's contribution with 21.21 percent. The employer can then receive relief with a maximum of SEK 5,300 per employee per month. Companies that make full use of the reduction can thus receive a total reduction of SEK 636,000 for the period March to June.
The proposal is expected to bring significant relief to companies that are hit by a sudden loss of income while maintaining the costs for employees.
Which companies are covered by the proposal?
The proposal applies to all companies that have employees, regardless of size, but only for up to 30 employees per company. The reduction can be used by all companies within a group, which means that the maximum number of 30 employees covers each company within the group. All employers are covered by the proposal, which means that, for example, non-profit associations and municipal companies that are employers are covered by the possibility of reducing employers' contributions.
The proposal also includes a reduction possibility for sole traders.
When does it start to apply and for how long?
According to the new law, the reduction applies from 6 April for salary payments during the period March 1 to 30, June 2020. The reduction is thus temporary.
What type of employment does the proposal include?
The company chooses which 30 employees the reduced fees should apply to. There is no requirement for type of employment. This means that the reduction can apply to part-time employment. If the salary exceeds SEK 25,000 per month, the reduction include the salary up to SEK 25,000. The entire employer contribution is paid on the part that remains of the salary. The reduction can also be combined with the proposed rules on short-term work.
How do companies apply for reduced employer fees?
The request for a reduced employer contribution is made by the employer placing a cross in box 062 on the individual assignment “Reduced employee contribution”. The company needs to manually calculate the new employer contribution in its business system and report the new information in the employer declaration.
Companies can avoid unnecessary adjustments by waiting to submit employer declarations until the rules have come into force. If the company has already submitted its employer declaration for March, the company can always request reconsideration and submit a new employer declaration.
Contact our hotline
At PwC we want to help companies through these times of insecurities. We have set up a free hotline where you can call and get answers to your questions related to the government's support measures and other covid-19 related business issues.
Christina Aronson arbetar på PwC:s kontor i Jönköping med skattefrågor rörande bolagsbeskattning, internationell beskattning och ägarbeskattning.
Kontakt: 010-212 52 08, firstname.lastname@example.org
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