Background information

In order to mitigate the economic impact of the COVID-19 outbreak for companies, a temporary reduction of employers’ social security contributions has been introduced for the period 1 March to 30 June 2020. To provide equivalent relief to sole traders, a reduction of individual contributions was also introduced. This measure can also be used by companies that receive short-term work allowance, new-start job subsidies and other types of financial support from the central government.

Content of measure

The temporary reduction in employers' social security contributions means that employers are now only obliged to pay the old age pension contribution (ålderspensionsavgift) (10.21%). This reduction applies to up to 30 employees and on that portion of the employee’s wage that does not exceed SEK 25,000 per month. This entails tax relief of up to SEK 5,300 per employee and month. To provide equivalent relief to sole traders, a reduction of individual contributions has also been introduced. The proposal’s cost to public finances are estimated to SEK 33 billion.

The rules came into force on 6 April. But if tax returns were submitted before then, a new one can be submitted to receive the reduction.

Use of measure

As all companies can benefit from the reduction for up to 30 of their employees and the reduction is applied for (almost) automatically, the use of the measure is expected to be widespread.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Consulted	Consulted
Form	Unknown	Unknown

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: Peak or cross-sectoral level

Involvement

No information available.

Views and reactions

Confederation of Swedish Enterprises (Svenskt Näringsliv) wants the duration of this measure to be extended in order to prevent a further economic downturn after the COVID-19 crisis.

The Swedish Trade Union Confederation is against this idea. They argue that this measure has been both expensive and ineffective.

Sources

• 06 April 2020: Tillfälligt sänkta socialavgifter med anledning av coronaviruset (www.regeringen.se)
• 16 April 2020: Information for companies in connection to the coronavirus (www.skatteverket.se)
• 11 June 2020: Confederation of Swedish Enterprises: extend the duration of the crisis support (Svenskt Näringsliv: Förläng krisstöden för corona) (arbetet.se)