Earned income tax credit (jobbskatteavdrag)
Jobbskatteavdrag (the work tax credit) is a reduction in the tax you pay, given only on income from work, salary and business profit, and never on pension or benefits. It is a big reason take-home pay in Sweden is higher than the headline tax rates make it look.
How it works
The credit grows with your work income up to a point and then levels off, and its exact size depends partly on your municipal tax rate. You never claim it, Skatteverket applies it automatically. You do not see a line called “jobbskatteavdrag” in your pay; you see it as tax that is simply lower than the rate alone would give.
Why pension is taxed harder than salary
Pension income does not get jobbskatteavdrag. Pensioners get a larger grundavdrag instead, but the two do not fully cancel out, so the same amount of money is usually taxed a little more as pension than as salary. It is worth keeping in mind whenever you compare working income with pension income.
Where it shows up
- Net salary
- Tax comparison
- Salary sacrifice
Grundavdrag shrinks the income that gets taxed. Jobbskatteavdrag shrinks the tax itself, and only on work income. You get both, and together they are why the tax on a normal salary is well below the raw municipal rate.