Self-employmentThe page was last modified:
Self-employment is an option if you want to carry out temporary assignments for various customers without starting your own business. As a self-employed person, you are affiliated with a self-employment company that operates in a similar way to an employer and handles the administrative side of your assignments for a commission.
How does self-employment work?
A self-employment company operates in a similar way to an employer, dealing with administrative functions such as invoicing, payroll and taxes. The self-employment company is also approved for F-tax. You are responsible for finding your own customers and assignments. Your employment with the self-employment company will end when you have completed your assignment.
Self-employment companies are also known as platform companies, invoicing companies or personal employment companies.
Enter into a contract with the self-employment company first
When you become affiliated to a self-employment company, you do the work but the self-employment company is the contractual partner with your customers.
It is important for your customers to know that the self-employment company is their legal contractor and is approved for F-tax purposes, even though you are the one who will be doing the work. This is why you have to become affiliated with the self-employment company first, and agree to the assignments that they are to invoice before you agree on remuneration with your customer.
Payroll and invoicing
When you have completed the work, you usually submit invoice data to the self-employment company, which sends an invoice to your customer.
Your customer pays the self-employment company, which then pays you a salary after deducting commission, outlay for any expenses, employer’s contributions, and preliminary tax. The agreement that you have with your self-employment company determines when your salary will be paid to you.
It is important for you to read the terms and conditions carefully so that you know what you are agreeing to and how much you will be paying to the self-employment company.
You claim tax relief under “other expenses” in your tax return on the costs that were necessary for the assignment you completed and that you paid yourself. However, these costs are only deductible for the part exceeding SEK 5,000 of the total costs for the year according to a special limitation rule. These expenses could relate to tools, work equipment, increased mobile phone costs or specific computer software, for example. However, as a rule, you cannot deduct the cost of the computer or mobile phone itself, or the subscriptions for these.
If you had to use your own furniture and fittings or other equipment, you should first allocate the cost between business and personal use. If you had to use your own furniture and fittings or other equipment for an assignment, in some cases the company may pay you “tax-free” reimbursement, i.e. without tax deductions.
If the company has reimbursed you for incidental expenses incurred in the course of your work, such as for consumables you bought for a specific assignment, and you have provided the company with the receipt or other supporting documentation, you do not normally have to account for this in the employer’s tax return.
The self-employment company pays employer’s contributions on your salary, so pension contributions are also paid into your state pension. How much is paid into your pension depends on how much you earn.
Besides the state pension, employees usually receive an occupational pension as well, which self-employed workers may not receive. If there is no occupational pension scheme for your self-employment, it is a good idea to compensate for this by saving money yourself. If you save about 4.5 per cent of your income in a long-term savings account, this is equivalent to what is paid into most employees’ occupational pensions.
If you are a parent or become ill
You can get compensation from the Swedish Social Insurance Agency if you are on parental leave or become ill. This compensation is based on how much you have earned. You are employed by the self-employment company, so they also hold employer responsibility for you.
Unemployment benefit fund
As a self-employed person, you may find there are times when you have no assignments to work on. Your entitlement to compensation between assignments is determined by means of an individual assessment. Ask your unemployment benefit fund what rules apply to you. The self-employment company may also be able to tell you what rules apply to you with regard to the unemployment benefit fund on the basis of the terms of your contract with them.
Responsible: Swedish Agency for Economic and Regional Growth