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Taxation and benefits
In terms of taxation, it shouldn't really matter what form your business takes – but there are differences, and there are major advantages to being aware of them. Welcome to LR Revision & Redovisning for sound advice.
In a limited company, you can choose to withdraw the surplus as salary or dividends, and a combination of both is usually preferable. It is important not to miss out on the pension and sickness benefits that withdrawals as salary provide, but only up to certain levels. This is an important safety net that is worth the higher tax rates that this form of withdrawal entails.Â
In a limited company, it is also possible to grant yourself various benefits as an employer, such as health and wellness allowances or gifts on milestone birthdays of up to SEK 15,000.
If you run a sole proprietorship or partnership, social security contributions are slightly lower, but you are taxed not on what you actually withdraw, but on the company's profits. There are also various ways of deferring taxation, which can be advantageous if planned well. Bear in mind that deferred tax will have to be paid at a later date.Â
Salary or dividend – a calculation example:
As a company director in a limited company, you can choose to withdraw the surplus as salary or dividend. How should you approach this?Â
Up to a cash salary including taxable benefits of approximately SEK 42,000 per month, you do not pay state income tax, and your salary provides benefits in the form of sick pay and pension. The rule of thumb is therefore to take a salary instead of dividends up to the level of state income tax or the maximum pensionable income (approximately SEK 550,000).
Higher salaries result in higher income tax. For amounts exceeding this limit, the total tax is therefore lower for dividends than for income tax. There are therefore restrictions on how much a partner in a closely held company can receive in dividends. According to the simplification rule, it is possible to pay out just over SEK 180,000 in dividends.Â
However, it is generally more advantageous to calculate the dividend capacity according to the main rule, which means that the acquisition value of the shares is used as a basis and 50 percent of cash salaries may be added, provided that the shareholders have taken out a sufficiently high cash salary.Â
There are a number of detailed rules and the calculations are complicated. The amounts applicable this year can be found under amounts and percentages.
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Our accounting consultants are experienced, highly skilled and always adhere to the established industry standards for authorised consultants. You can rest assured, knowing that you will receive state-of-the-art support in accordance with effective, quality-assured procedures and applicable laws and regulations.
Authorization via SRF or FAR is further confirmation of the consultant's experience and expertise, and you will find authorized consultants in our collaboration.
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There are different degrees of skill. You can do a lot yourself and someone with some financial expertise can help you with many tasks. There are also areas requiring authorised or approved expertise. Auditing is one such area.
An authorised and approved auditor meets the requirements of the Auditors Act in terms of education, experience and integrity. Performing work "in accordance with generally accepted auditing standards" entails compliance with a legal standard imposing demands on the planning, staffing and execution of your assignments.
Security and safety for you and your company are central. Engaging LR Revision & Redovisning assures you receive quality-assured support from certified and/or approved auditors.
