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Tips for Spring Investing
2/5/2024
Tips

Tips for Spring Investing

Spring is an exciting time in general and for entrepreneurs in particular. The days are getting brighter, the weather is getting warmer and it's a time when you, as well as your employees and customers, feel motivated to set new goals and work towards them. For many industries, spring also marks the beginning of the high season and is also a natural time to evaluate the first months of the year, make the necessary adjustments to the strategy and plan for the rest of the year. There is therefore much to be gained from making investments in the spring to lay a foundation for growth. In this article, we are going to give tips on investments that lend themselves well to making in the spring.

Premises

Spring is the perfect time to overhaul the premises of your company. This can range from simple aesthetic improvements to major renovation projects or simply finding new premises. If your premises do not meet the requirements of your company, there is a risk that your resources will not be maximized and that your company's productivity will be negatively affected. An inspiring work environment will also help foster creativity and productivity among your employees. For companies where customers stay in the premises, the premises become even more important. They are an extension of your company's brand and identity and a welcoming, inspiring and professional environment can enhance the customer experience.

Technical tools

Another area worth reviewing is your technical tools. Developments in both hardware and software are moving at a breakneck pace, and spring is a good time to evaluate whether the tools your company uses are doing the job or not, and whether there are new solutions that can automate and streamline processes. Investing in new hardware and software can benefit if the current one still works. But if that means your business is missing out on productivity and efficiency by not upgrading, look at the opportunity cost. Because if the value you're missing out on exceeds the cost of the investment, that means your business loses out on not upgrading. One area that is particularly important to review is your company's cyber security to ensure that your systems and data are protected and that you have backup of everything.

lager

For any company that sells products, the warehouse strategy is paramount to ensure that there are enough goods to meet customer demand, without having to be left with unsold products when the season ends. Analyze your company's data to forecast demand, identify which products are performing best, and make sure you have enough of them. That way, you can strike a balance between keeping popular products in stock while giving you room to test new products. For companies with large seasonal variations, this becomes especially important for planning ahead of the high season.

Campaigns

Spring, as I said, is a time when motivation and optimism are generally at their peak, which makes it a great opportunity to launch marketing campaigns to take advantage of the positive winds. It can be both longer-term brand-building efforts, as well as more short-term sales drive efforts. The best thing is to do a combination of both parts to build loyalty and preference while increasing sales in the here and now.

Expansion

If you take your eyes off campaigns, there are even more ways to grow your business that require a little more planning and consideration. If your business is stable and you want to take the next step, it's a good time to start planning to expand by broadening either your offering, your geographic presence, or both. However, expansion can also involve exploring alternative business models to complement or replace your current one, or entering into partnerships with other companies.

Sustainability

The focus on sustainability is no longer something that only the interested are dedicated to, but it is a necessity for all modern businesses. As legislation around sustainability will cover more and more companies, there is much to be gained from being at the forefront as entrepreneurs. Investing in sustainability initiatives and working to reduce the company's climate impact does not have to mean spending resources on something that does not yield returns, rather the opposite. In many cases, this can result in your company actually being able to save money, become more efficient, and gain a competitive advantage over competitors. So take the spring to see if there is an opportunity to switch to fossil-free transport, if there are more sustainable alternatives in your production chain or if you can reduce your waste.

7 mistakes you want to avoid when starting your own
1/5/2024
Tips

7 mistakes you want to avoid when starting your own

Although starting your own business is both fun and developing, any self-employed person can testify that it is not always a dance on roses. Like a living creature, a company has needs that must be met to ensure the growth of the business. And along the way to success, you will make some mistakes.
Do not be afraid of mistakes.
Failure is a natural part of life as an entrepreneur, especially at the beginning of your career. By making mistakes and learning from them, you can develop both yourself and your business. Therefore, it is important that you are not afraid to fail, but at the same time you should beware of making the same mistake several times.
Although you should always see your failures from a positive point of view, there are some mistakes that are extra common among startups. By avoiding these, you, as just starting your own, can increase your chances of success faster. Below we list seven common mistakes among startups and how you can avoid them.

Weak business idea

The most important step towards successful entrepreneurship is to have a unique and well-thought-out business idea. Unfortunately, many companies choose to invest in a business idea that does not have as much potential as they themselves think.

Therefore, it is important that you have clear what to sell, to whom and in what way. Above all, investigate whether your idea already exists and how, if so, you can improve it to stand out. Do not forget to keep a close eye on your main competitors.

One tip is to do a survey among family and friends before you decide to make your idea a reality. This way you can get valuable feedback and even ideas on improvements or changes.

Starting your own for the wrong reason

In difficult times of rising unemployment and few jobs, many people are thinking of starting their own. A common misconception is that entrepreneurship is all about comforts, such as being your own boss and making money from rolling bands.

Few are aware of the hard work that an own business requires. It is not uncommon for self-employed workers to work more hours than full-time employees, especially at the beginning. In addition, starting a profitable business takes time, which requires patience — something not many people counted on.

If you want to start your own business, make sure you have an eye on what is actually required of you, both in the short and long term.

Flawed economy

You will need money to be able to make money, especially in the start-up of your business. Many start-up entrepreneurs believe that the income of the company will roll in immediately, but, of course, this is not the case. It takes time to build a stable turnover.

In other words, during the start-up phase, incomes will be small and expenses large. After all, now you need to make investments in everything from websites and equipment to premises and possibly employees.

For this reason, it is important that you plan the company's budget carefully in advance. How much start-up capital will you need to get by during the startup? When will the company start making money? How big will the spending be?

If you have a job at the moment, it may be a good idea to keep it, or lose it on time, while you start your business. In this way, you get financial security, which is especially important in the start-up phase because start-ups often lose money in the first few years.

No business plan

It is not uncommon for entrepreneurs to believe that a good business idea is enough to run a business. The business idea is certainly important, but it is nothing without a thorough business plan.

A business plan should contain a detailed description of your idea and goals of the business. It should also include information on everything from competitors and marketing strategy to budget and funding.

With the help of the business plan, you can easily plan a strategy for developing the company in the desired direction. In addition, the plan can facilitate meetings with potential investors or in business loan negotiations with the bank.

Learn more about business loans and how they can help your business grow Lånjakt.se.

Weak digital profile

Digital presence is becoming increasingly important in our digitized society. Nevertheless, studies show, such as this one made by ClutchToday, only 64% of small business owners have a website. This means that many companies are actually losing customers due to a weak digital profile.

No matter what industry you are in, a website is now a must. On the one hand, a website opens up completely new marketing options, such as search engine optimization, while it can improve your trust with potential customers.

You should also be active on social platforms such as Instagram and Facebook, given the large audience that is there. The more active you are online, the better chance you have of reaching out to the right audience and building a strong brand.

Fear of change

A common phenomenon among entrepreneurs is that they stay in old patterns, whether things are going well or not. In other words, few people choose to develop their business further, despite the fact that this may affect profitability.

If the company is doing well, think about how it can do better. If the results do not meet expectations, evaluate and reflect to find opportunities for improvement. Maybe you need to change direction? Or maybe it's time to invest in external expertise?

As an entrepreneur, you should never be afraid of change. Dare to question old patterns and find new opportunities.

I want to do everything myself

One of the most common mistakes among self-employed and entrepreneurs is that they always try to do everything themselves. A common reason for this is because “they do it best themselves”.

Apart from the fact that this attitude can create psychological stress - which in turn can lead to a deterioration in work performance - it can also slow down the development of the company.

Daring to ask for help is important, partly for your own sake, but also for the company's. For example, by hiring external consultants with expertise in specific areas, you can reduce the workload effectively. At the same time, you stimulate the growth of the business because the work will get done faster.

Also, don't be afraid to consult with people around you. This is where a wide network can be extra appreciated.

Summary

Running a business is a multifaceted process and sometimes you get it wrong. Never be afraid to fail, but make sure not to repeat past mistakes several times. If you do, it's a sign that life as a self-employed person may not be for you.

Why multiple investments may need to be made at the same time
19/4/2024
Investment

Why multiple investments may need to be made at the same time

Are you thinking about investing, but are not sure what return it would bring? Or have you made an investment that did not quite bring the desired result? In both cases, it is good to keep track of what marginally diminishing returns mean, to ensure that none of the company's resources take out anyone else.

Every company has resources to deal with. These resources are called production factors and control how much a company can produce. As an entrepreneur, it is good to have a general understanding of how they affect and are related, in order to be able to plan their investments and to ensure that the investments give the best possible results. There are, of course, a variety of factors and variables that affect a company's output, but generally speaking, it is generally said that there are two basic factors of production that apply regardless of what the company produces — labor and capital. Labor is the employees of the company and what they contribute to production, while capital is what is used in production itself, such as machinery, premises and cash. How much labor and capital are then invested in production, respectively, controls how much the company produces of a good or service.

The benefit of adding another resource

Adding, or removing, a unit of a factor of production will affect the quantity that the company produces. The change in the quantity of production implied by the changing factor is called marginal product. For example, the marginal product of labor is the change in the quantity of production that the increase or decrease of a worker would result; all that most often companies strive to increase their capacity, which is why one chooses to increase either the labor or capital of the company. Increasing a factor of production will in most cases lead to increased utility for the company. However, if one factor of production continues to increase, while keeping the others constant, it will in the long run lead to a slowdown in the rate of production. The result is then that the benefit, or return, of adding an additional unit of the same factor of production will be less than the previous one. That is, production yields marginally diminishing returns.

Marginally diminishing returns are something you should consider when you intend to invest, as it can have an impact on whether or not you get the maximum benefit from the investment. This does not mean that you need to do a lot of economic analysis before each investment you make in the company. But it is good to keep in mind how an investment that adds a factor of production to your company can affect other factors. Let's take a hair salon to exemplify this. A hair salon that has four hairdressing chairs, but only one hairdresser, the marginal rate of return will be the same for each additional hired hairdresser up to the four chairs being filled. If the salon employs a fifth hairdresser, the marginal return for them will be less than for hairdressers 2—4. The fifth hairdresser will still provide some increase in production as he can do other tasks and cover for the rest when they have lunch or are sick. However, since there is no barber chair for him to use, the production increase will be less than it was when the salon employed the other hairdressers. Does the salon then continue to employ hairdressers without investing in more hairdressing chairs or a larger venue it will eventually come to a point where production actually drops. Should they, on the other hand, invest in an additional barber chair for each hairdresser hired, the marginal rate of return would be constant.

How it can affect your investments

The reality is of course more complex than the example above, but the principle can be applied to most investment situations your company may face. When investing, it is good to have an understanding of how the company's resources interact with each other. If you plan to expand, you can expect that it will require investments in both labor and capital, to have the desired effect on the company's output. And if you feel that a recent investment has not quite yielded the result you had hoped for, it may be that the marginal product of the resource you invested in has shifted to being waning and that you need to balance up by investing in any other of the company's production factors with. Being aware of marginally diminishing returns can therefore help you plan your investments, identify the needs of your business, and subsequently make decisions that will allow you to get the maximum return on your investment.

Does your company need help with financing?

Froda was founded in 2015 with a clear idea — to give SMEs the same opportunities to grow as large ones. With our service, we make it easy and affordable for entrepreneurs to invest in their ideas. By digitising the process, we have made it possible to help more companies with tailored financing according to their unique business and its needs. A smarter business loan, simply.

Today we are one of Sweden's fastest growing fintech companies and have helped more than 15,000 companies grow. Froda is a credit institution covered by the State Deposit Guarantee and is supervised by Finansinspektionen (FI).

Equity or external financing
8/4/2024
Financing

Equity or external financing

In order for businesses to grow, investment is required. These can be financed either by reinvesting the company's own resources, or by raising external capital. But how should you think as an entrepreneur when faced with the choice of whether to finance an investment with equity or external financing?

Equity

Equity is the difference between a company's assets and liabilities. When a company generates profit, it increases its equity. In order for the company to continue to grow and hopefully generate higher profits in the future, it is often a natural choice to reinvest all or part of the profits in the business. This can be done by the company making investments, paying off debts or increasing cash flow to improve liquidity. Using the equity and current income, it is The most common way to finance investments among Swedish entrepreneurs.

External Financing

Access to capital is a prerequisite for enabling companies to grow. However, for many small and growing companies, equity is not enough to invest, and external capital needs to be used to finance the investments. There are several different forms of external financing, but most of them are business loans The most common way to finance investments.

Investing with equity or external financing?

Whether it is best to invest with equity or with the help of external financing may differ from company to company and from investment to investment. It is therefore important to have an understanding of how they differ, how they affect key indicators in the company and when the investment is expected to yield results. This is so that you can choose the financing that will allow your company to get the maximum return on investment.

Solidity

When investing, the solvency of the company will increase or decrease differently depending on whether you reinvest the equity or if you use external financing. Solvency is a measure that indicates the proportion of assets financed using equity and is used to describe the long-term solvency of a company. When equity is reinvested in the company, the solvency will increase and, correspondingly, it will decrease if the investments are made with external financing.

Therefore, when you are going to invest, it is good to make sure what solidity you have in the company. If your company has low solvency, investment using equity is preferable. On the one hand, solvency will increase, and secondly, because the company's own money may generate a better return than if it were simply lying in the company's account. However, investing with equity is relatively expensive compared to, for example, a business loan as most entrepreneurs want to generate a higher percentage return than the interest rate that the loan has. Therefore, if the company has a high level of solvency, it is preferable to finance the investment with external financing.

Type of investment

The type of investment you intend to make can also have an impact on which financing may be preferred. Reinvesting profits in the company is, as I said, an important part of healthy entrepreneurship, but a relatively expensive way to finance investments. Investing with the company's own capital also means withdrawing the cash, which affects the short-term solvency of the company. If the investment is made in an asset that can be quickly turned over and generate income for the company, equity can therefore be a good way to finance the investment. If the investment is instead made in an asset that will be used for a longer period, it is usually better to finance it with external capital. This way you do not risk the liquidity of the company and thus the short-term solvency. However, it is not only the ability to pay the company's debts that affects whether to look at liquidity and which financing you should choose. Virtually all companies are run for profit and with the goal of generating returns for the owner. Therefore, if your company has good solvency and liquidity, financing with, for example, a business loan can allow you to both drive growth in the company, while at the same time, as an owner, you can use part of the cash to distribute part of the profits to yourself and get a return on your work.

Invest in time

Another aspect to consider is when the investment needs to be made. Most Swedish companies are restrictive when it comes to indebtedness and choose to use their own capital and save for investments, which is not optimal. If companies save for investments, the investment risks being made too late and thus not having the desired effect. When you wait with the investment, you also miss out on the expected return while the investment is pending. This not only means that you as an owner miss out on increased profits and potential dividends, but also that the growth of the company deteriorates when the returns could have been reinvested in the meantime.

When you need to boost your company's liquidity
10/3/2024
Financing

When you need to boost your company's liquidity

When the renovation becomes more expensive than planned, when the unexpected happens or simply when the company needs an injection to reach the next peak. Then liquidity can become a barrier to growth.

What is liquidity and how to increase it in the company?

Liquidity is a measure of your company's short-term solvency, or availability of cash, relative to short-term liabilities, such as a supplier debt. Improved liquidity means, in short, improved solvency. For example, if the company incurs unexpected expenses that exceed its short-term solvency, liquidity problems arise.

Common with temporary liquidity problems

In some industries, revenue varies widely depending on the season. For example, many service and tourism companies are fully booked during high season, only to have almost no customers at all a few weeks later. As a small business owner, it can be difficult to deal with these big swings. In addition, sometimes the weaknesses become deeper than budgeted for, which causes problems.

Liquidity problems in the off-season can be doubly problematic, as this may be when you have time to invest — so that way you can grow at peak times.

Then a loan might be the solution. Think carefully about the need before you borrow so that you are sure you can repay. Just borrow exactly what you need.

When the unexpected happens

Small businesses are particularly vulnerable to unexpected expenses. The consequences are often greater the longer it takes to find a solution. The cafe owner whose awning falls down in the middle of peak season needs a new awning immediately to make the impact as small as possible. The restaurant owner with an oven that has broken down needs help immediately.

If you haven't had time to build up a buffer for unexpected expenses, external financing is an opportunity that gives you quick access to cash when the unexpected happens.

Sometimes wise to settle accounts payable with loans

Unforeseen events can set it up properly and it can get really boring when you find it difficult to pay your supplier invoices. A business loan is often a better solution than risking the company's relationships with a non-payment. If you run an otherwise well-run business, settling single accounts payable with a loan need not be a problem.

Increase liquidity with a loan -- but consider this

If you run a small business that suddenly loses turnover or has unresolved accounts payable, you should carefully analyze what it is due to. Some things to ponder might be:

  1. How are the competitors doing?
  2. Does the downturn only touch you?
  3. Do you have a profitability problem that can be corrected?

Maybe you need to invest in order to reach more customers. This could be a new product, new equipment or marketing to an important customer group to increase sales. Think carefully about the need before you borrow. Are you sure this particular investment is the right one? Count on your space to repay the loan.

Taxes and deductions for the self-employed
16/2/2024
Business economics

Taxes and deductions for the self-employed

In collaboration with Bokio



Once you have started your own business, there is a lot to think about, ranging from how your business idea should generate profits in the best way and how you should find new customers for your business. Learning about taxes may not be what you look forward to most when you start your own business — but it's an essential ingredient to success. Learn everything you need to know about taxes as an entrepreneur with the help of this guide.

How much tax do you pay?

There is no simple answer to this question. The amount of tax you pay depends on many different factors, including how much income you have, your age, where you live, what form of business you run, what deductions you are entitled to, and more. If you earn less than $22,300 in one income year, you pay no tax at all and if you earn more than $613,900 in one year, you pay roughly 50 percent tax. After reading this article, you will hopefully have a better understanding of how different taxes affect your income.

Different types of income affect the tax you pay

When you talk about taxes, it is good to first be familiar with what the different types of income mean. There are three different types of income that determine which taxes you will pay, differentiating the income law can make it easier to understand the big picture surrounding your tax situation. Within each type of income, there are many different taxes that are added, so you can see the income categories as overall categories.

Income type Business activity

The income category of business activities is a relatively broad tax class that includes all types of business activities, such as sole proprietorships, trading companies, limited partnerships and limited liability companies. Thus, the income category business includes companies and not individuals (although the limit is fluid for, for example, an individual company).

Income type service

Income from service includes money earned through an employment or assignment. If you run a limited company, you pay tax in the income category of business activities on behalf of your limited liability company and tax for the income class service for your salary as an individual.

Income type capital

The income class capital includes income and expenses incurred in connection with the transfer or sale of capital. This can be, for example, interest costs or rental of real estate. For shareholders, a common contact with the income beat is capital when they withdraw dividends from their limited liability company and pay corporation tax.

Taxes in individual firms

When you run an individual business, it is you who make sure that the tax is paid, unlike if you are an employee and the tax is automatically deducted from your salary. The first tax you need to familiarize yourself with as an individual trader is F-tax (business tax). If you have an employment alongside your individual firm, you pay F-tax with conditions, known as FA tax.

Own contributions in an individual company

Part of the tax that you pay in your individual firm corresponds to the social security contributions that employers pay to their employees. In an individual firm, these are called self-contributions and consist, among other things, of health insurance contribution, parental allowance, old-age pension contribution and more. Since you pay self-contributions, you are entitled to sickness benefit when you are sick, parental allowance when you have children and more, even when you are self-employed.

Own withdrawal individual company

When you run an individual company, you do not have a salary in the same way as when you are employed or run a limited company. All your surplus in the company, that is, the amount that remains after expenses have been deducted from income, is counted as income in the taxable sense and can therefore be equated to salary.

Once you have paid preliminary tax on your excess, the rest of the money is free to be transferred to your private account. When you withdraw money from your individual firm in this way, it is called own withdrawal. When you make your own withdrawal, your withdrawals are not taxed per se, but the money is already taxed as the firm's earnings.

When you make your own withdrawal, it is an expense that should be recorded, but no expense that affects the firm's bottom line. For example, if you have a surplus of SEK 50,000 and choose to withdraw the entire amount as your own withdrawal, the result report will still show a profit of SEK 50,000. The only thing that happens is that your private account gets more money while the corporate account gets less money and your cash balances decrease.

Taxes in Limited Liability Companies

Many people tend to advocate limited companies as a form of business when the idea is for the company to grow, thanks to the favorable tax opportunities. Below we review the most common taxes for limited liability companies.

F-tax

Limited liability companies pay F-tax in the form of preliminary tax charged. Based on the preliminary income tax return or last year's earnings, you pay in f-tax each month. When you receive your final tax return, you will either pay the tax arrears to the Swedish Tax Agency or you will receive a tax refund.

Employer's fee

Before a salary ends up in the wallet of an employee, a significant amount has already been taxed from the company's payroll payment. Employer's contribution is a tax that ensures that the employee receives a salary in the event of illness, parental leave or when he retires. In total, employer contributions in 2022 amount to 31.42 percent of gross wages.

Corporate tax

Corporate tax is a tax paid on the profit made by a limited company in a financial year, so in the case of a loss year, no corporation tax is payable. The corporation tax for 2023 stands at 20.6 percent and is paid in the form of preliminary tax each month.

At the end of the year, the tax paid will be reconciled against the final tax. Corporate tax also covers capital gains in limited liability companies, such as dividends. Corporate tax is thus part of the first tax stage for limited liability companies. When you receive a salary as an employee of your own limited liability company, you are also taxed as an individual in a second tier.

State income tax

For high-income earners earning above a certain amount, the state income tax is added. That means you need to pay an additional 20 per cent tax on that sum in excess of the cut-off point.

There are various limits to keep an eye on when you are near the limit of being subject to state income tax; the layer limit and the cut-off points. For 2023, the tax limit is SEK 598,500, that is, if your taxable earned income, after deducting the basic deduction, exceeds SEK 598,500, you are subject to the state income tax.

Because it can be difficult to know exactly how big the basic deduction is, you can instead start from the highest income you can earn before the basic deduction is deducted. This is what you call the cut-off point for state income tax, and there are two different cut-off points depending on whether you are over or under 66 years of age.

For persons younger than 66 years, the cut-off point for state income tax is SEK 613,900.

For persons who are 66 years of age or older at the beginning of the year, the cut-off point for state income tax is SEK 683,200.

The difference is due to the fact that the basic deduction is higher for retirees.

Preliminary tax

The F-tax is usually paid monthly in the form of a pre-tax charge. How much you pay is based on how much tax you paid last year or the amount that you listed on your preliminary income tax return. At the end of the financial year, your paid tax will be reconciled against your final tax.

When do you get a tax refund?

If you have paid more provisional tax than you should, you will be reimbursed by the Swedish Tax Agency. There are many people wondering when you get money back from the tax, and the answer varies depending on when you filed your income tax return.

If you filed your tax return before March 30, you will receive a refund on the tax April 5—7.

If you filed your tax return after March 30, you'll receive a tax refund between June 8-9.

Basic deduction

Basic deduction is a deduction made to lower your taxable income and thus reduce tax. If you run a sole proprietorship, the basic deduction is deducted from your income from business activities, and if you run a limited company, the basic deduction is deducted from your salary. You do not need to apply or register for the basic deduction — this will be deducted automatically.

The purpose of the basic deduction is to reduce the tax rate for the income earner and to equalize the tax between different income groups. The basic deduction is higher for low- and middle-income earners and lower for high-income earners. For people earning less than 22,300 in the 2023 income year, the full amount falls away under the basic deduction -- meaning you don't have to pay any taxes at all. For an accurate list of the basic deductions of different income ranges: visit Swedish Tax Agency's website.

Job Tax Deduction

The job tax deduction is another deduction that reduces your tax base. Like the basic deduction, the employment tax deduction is not something that you need to apply for, but it is deducted automatically by the Swedish Tax Agency.

In order to qualify for the employment tax deduction, you need to receive your income through work or business activities, if the income comes from sickness benefit, parental allowance, income tax or the like, you are not eligible for the employment tax deduction.

The job tax deduction may only be deducted from the council tax, the deduction does not apply to the state income tax, the property tax or the real estate levy. How big the job tax deduction is depends on how high your income is.

Municipal tax

Municipal tax is a tax that goes to your municipality and county council registered as a citizen. Municipal tax is the largest tax paid by income earners, amounting to just over 32 per cent on average in Sweden in 2022. There are variations around the country with a minimum listing of just under 29 per cent and the municipality with the highest council tax having just over 35 per cent.

Moms

VAT is a value-added tax found on the majority of goods and services bought and sold. There are three different VAT rates: 25%, 12% and 6%, the first of which is the most common. For you as an entrepreneur, it is important to keep track of VAT, as you add the VAT rate to your price. For example, if you want to invoice 1000 SEK for a work, you need to add 25 percent to the invoice to get the right amount.

VAT is not a tax that affects a company's bottom line because you will always break even in the end. If your outgoing VAT costs are greater than your input VAT income during a VAT period, you will receive a refund from the Swedish Tax Agency, and if your input VAT is greater than your outgoing VAT, you will need to pay the difference to the Swedish Tax Agency.

Marginal tax

The name “marginal tax” is somewhat misleading as it is not a tax that you pay. Marginal tax is a term for the total tax you pay in the event of an increase in income. It is usually said that marginal tax is the tax that you pay on your last earned crown.

For example, if your salary increases by 1000 SEK and 700 SEK lands in your payroll account, the marginal tax is 30 percent. Typically, marginal tax tends to be about as high as council tax, but as you approach the limit of state income tax, marginal tax increases significantly.

If your salary exceeds the cut-off point for state income tax of 20 percent, the marginal tax usually lands up toward 50 percent. If your salary increase of SEK 1000 means that you receive SEK 500 more in your salary account, the marginal tax is 50 percent.

Benefit taxation

Sometimes employers provide compensation to their employees in addition to salary, if such compensation costs a private cost of living it is called a benefit. One of the most common types of benefits is company car. Like cash compensation, benefits also need to be taxed, both by employers and workers. Employers pay employer contributions for the benefit and the employee pays taxes.

As a rule, all benefits are taxable, but there are exceptional cases that are regulated to be tax-free, such as health care allowance.

Excise

In addition to all the taxes already mentioned, there are specific taxes on specific goods and services, known as excise taxes. Excise taxes are an effective way for the state to regulate consumption in a desirable direction and, in addition, provide increased tax revenues. The tobacco tax, the alcohol tax and the tax on plastic carrier bags are all examples where you want to influence consumption through a higher price.

Bokio makes tax easy

In Bokio's accounting software, you hardly have to think about the tax. When paying wages, the tax is calculated automatically and the correct amount is deducted. After that, an employer declaration is generated, which you can easily submit to the Swedish Tax Agency.

In cooperation with Bokio, you as a Froda customer receive a 20% discount on Bokio Premium.

Go to the offer.

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