How does occupational pension in Sweden work?

Despite being a widespread market practice, occupational pension contributions in Sweden is not mandatory. The occupational pension covers life, disability, waiver of premiums, and workplace accident insurance. Membership in the occupational pension scheme is open to employees aged 18 to 65.

As the Customer, if you decide to offer this to employees, then it must be offered to all employees on your team. The Customer pays all the contributions and no contributions are required from employees.

Contribution rates

• 4.5% on pensionable salary between 0 and 7.5x the Income Base Amount (IBA).
• 30% on pensionable salary between 7.5 and 30x the Income Base Amount (IBA).
• No contributions are payable on pensionable salary above 30x the IBA.
• The IBA for 2023 is SEK 74,300.

Example: An employee with an annual salary of 800,000 SEK. In Sweden, the 2023 IBA (income base amount) is 74,300 SEK. 7.5 IBA x 74,300 is 557,250. Therefore, up to a salary of 557,250, the employee receives 4.5% contribution (from the employer) and above 557,250 (up to 800,000) they have a 30% contribution. There is also a roof of 30% IBA, so if an employee has an annual salary over 30 IBA (2,229,000 SEK), there would be no contribution beyond that level.