Your pension as self-employed

The amount of pension you receive from the Swedish Pensions Agency depends on how much you have paid in taxes and contributions to the Swedish Tax Agency. There are two different pension contributions that you have to pay as a self-employed person: the old-age pension contribution, which corresponds to the contribution that employers pay for their employees, and the public pension contribution, which you pay as a wage earner through your taxes.

Public pension

To start earning money for your public pension, you must have an annual income of at least SEK 24. 238 (2024). There is also an upper income limit for pension entitlement that corresponds to a salary of SEK 51. 208 per month (2024). If you can draw that salary or that net profit, you maximise your public pension.

For sole traders, trading partnerships or limited partnerships

When you run a sole trader business, a trading partnership or a limited partnership, the net profit that you declare and pay tax on is what entitles you to a general pension. The smaller the net profit you are taxed on, the smaller your public pension.

You pay old-age pension contribution of 10.21% of the net profit from your active business activities. The old-age pension contribution is part of the 28.97% in self-employed social security contributions you pay on your net profit. Like ordinary wage earners, you also receive credit for the public pension contribution, which represents 7% of the net profit on which you pay tax.

For limited companies

When you run a limited company, you have to draw a salary to receive a pension. It is the salary you draw and pay taxes on that give you your public pension.

If you run a limited company, the company pays old-age pension contribution at 10.21% of your salary. The old-age pension contribution is part of the employer's contributions totalling 31.42% of your salary which the company pays to the Swedish Tax Agency. Like ordinary wage earners, you also receive credit for the public pension contribution, which represents 7% of the salary on which you pay tax.

Private pension savings

Most employees receive an occupational pension from their employer, in addition to the public pension they receive from the state. As a self-employed person, you will have to make up for the loss of occupational pension by saving for your own pension. As a rule of thumb, you should save about 4.5–6 % of your salary or surplus. This is equivalent to what most employers pay into their employees' occupational pensions.

If you take out a salary or surplus that is higher than SEK 47,625 a month (2024), you need to save 30-31.5 percent of what exceeds that amount in order to receive the equivalent pension that an employee with a collective agreement receives.

Tax-deductible savings

For sole traders

Unlike ordinary employees, if you have income from active business activities, you can pay in and make deductions for your private pension savings. You can deduct up to 35% of your business income for private pension savings. To be able to make deductions, you must invest in a pension insurance or a pension savings account. The deduction may not exceed 10 times the price base amount, i.e. it is maximum SEK 573,000 (2024).

For limited companies

Unlike ordinary employees, if you run a limited company you can pay into and make deductions for pension savings in different ways. You can let your company save in an occupation pension for you. If you don’t use the opportunity to save in an occupational pension You can instead make deductions for private pension savings up to 35% of your salary in your income tax return. To be able to make deductions, you must invest in a pension insurance or a pension savings account. The deduction may not exceed 10 times the price base amount, i.e. it is maximum SEK 573,000 (2024).

As usual, your company pays employer's contributions on the entire salary, but you avoid income tax on the part corresponding to the deduction because the savings are deductible in your tax return.

Sustainable pension savings

Ask your pension provider how they can make it easy for you and your employees to choose sustainable funds and investments.

Search and compare funds with the Swedish Pensions Agency (in Swedish)

Your pension during parental leave

Are you an entrepreneur and planning for parental leave? It is a good thing to be aware of what happens to your pension during this time. Here are some things to think about:

• Parental allowance counts towards the public pension.
• The parent who earns the least receives extra contributions to the public pension during the child's first four years.
• If you have a private pension savings/occupational pension, it is good if you can continue this payment even during parental leave.

A tip is also to share parental leave and possible part-time work after the parental leave.

You can find more about how early childhood can affect your pension at the Pensions Authority (in Swedish)

Continue to run the company when you turn 66

If you want to continue running your business after the age of 66 you can earn more money because you get tax benefits. You can continue to run the company even if you have started withdrawing part or all of your pension.

Increased employment tax credit

From January of the year you turn 67, you get an increased employment tax deduction and then pay less tax on your earned income.

Lower employer contribution or personal contribution

From the year you turn 67, your employer contribution or personal contribution is reduced. You will then only pay the old-age pension fee, which is 10.21 percent.

If you are a sole trader you can reduce your own contributions from the age of 63 or 64. You can do this by withdrawing your entire state pension.

Increased basic deduction

From the year you turn 67, you get an increased basic deduction. This results in lower taxes on income and on pensions.

More detailed information and pension tips for entrepreneurs of all ages can be found on the Swedish Pensions Agency's website.

Earn money by running the company after 66 on pensionsmyndigheten.se (in Swedish)