Changes in the law that will affect employers as of 1 January 2022

Changes in the law that will affect employers as of 1 January 2022

Sweden’s parliament has approved expenditure limits and estimates of revenue in the central government budget for 2022 in accordance with a joint proposal from the opposition parties. Here we summarise the important changes that we already know will affect employers as of 1 January 2022.

Tax relief for employer-provided bicycles

Bicycles provided for employees by their employers can, under certain limits, be a tax-free benefit for the employee. The tax exemption applies for bicycles up to a market value of SEK 15,000 and for up to SEK 3,000 in taxable benefit per tax year. The relief only applies to push-bikes and electric bikes, and only if the benefit is offered to all permanent staff on equal terms at the workplace in question.

Simpler tax rules for temporary assignments in a different location

Remuneration relating to travel and increased living costs in a different location for temporary employees will be tax free provided that the employment or assignment is intended to last for no longer than one month and that the distance between the workplace and home is more than 50 kilometres.

Expanded rules on tax relief on employee stock options in certain cases 

Since 2018, the employee stock option benefit has not been included for taxation in the “service” income category if certain terms are met. Neither does the employer, therefore, have to pay social security contributions in these cases. Instead, taxation takes place in the “capital” income category, and only when the person liable to pay tax (i.e. the employee) sells the shares they have been able to buy by exercising their employee stock option.

The qualifying limits for the beneficial rules regarding employee stock options will be increased so that they can be applied at companies with a maximum of 150 employees and a maximum of SEK 280 million in net sales and total assets. The terms are also being expanded to include board members and deputies who are not employed by the company.

Follow Azets’ blog to read ongoing updates about other changes to the law.