Changes in payroll-related legislation from 1 January 2026

At the turn of the year 2026, several new regulations will enter into force that affect payroll management and HR administration for Swedish employers. The updated values and legislative changes require organisations to ensure that routines, policies, templates, and internal communication are correctly adjusted.

In this article, we summarise the most significant updates applicable from 1 January 2026 and highlight what employers should consider in order to maintain efficient processes and full regulatory compliance.

The most important legislative changes from 1 January 2026

Strengthened earned income tax credit
The enhancement applies to individuals with employment income, particularly full‑time workers with low and medium incomes. The purpose is to increase incentives to work and improve the financial situation of households with lower incomes. The change results in an average tax reduction of approximately SEK 400 per month for a person with an average salary. This is part of the government’s initiative to make work more financially rewarding, thereby stimulating employment.

Special income tax for non‑residents (SINK)
The tax rate is reduced to 22.5 percent of taxable income (excluding seafarer income). A further reduction to 20 percent has been decided and will enter into force on 1 January 2027. The purpose of lowering the SINK tax is to make taxation fairer for Swedes living abroad who do not use Swedish welfare to the same extent, while also strengthening Sweden’s competitiveness and making it easier for companies to hire international labour.

Tax deduction for donations to non‑profit organisations
Legal entities will be entitled to a tax reduction for donations to approved non‑profit organisations. To qualify for the tax reduction, the donation must be made in money, amount to at least SEK 2,000 per occasion, and the total annual basis may not exceed SEK 800,000. The measure aims to promote corporate social engagement and support non‑profit activities.

Increased threshold for work‑related travel deductions
The threshold for deductions for work‑related travel is raised from SEK 11,000 to SEK 15,000. The change affects deductions for commuting, travel to and from an educational institution, and travel required to report for work. The purpose is to better reflect the increased costs of travel.

Changes to the “växa‑stöd” (growth support)
The so‑called “växa-stöd” (growth support) will no longer be provided through reduced employer contributions but instead through the employer applying retroactively to the Swedish Tax Agency for crediting of already paid contributions. Applications must be submitted one calendar month at a time and no later than one year after the month to which the application refers. The adjustments are made due to EU state aid rules. The changes mean that companies need to review their routines for applications and administration.

New rules to prevent misuse of government support
A new offence, “subventionsbrott” (subsidy fraud), is introduced. Anyone who provides incorrect information or fails to report changes in circumstances may be penalised. It will also be punishable to use the support for purposes other than those intended and approved in the application. The aim is to increase oversight and ensure that government support is used correctly.

Expanded right to VAB (temporary parental benefit)
From the turn of the year, parents will have an expanded right to temporary parental benefit (VAB). The new law means that VAB can be used not only when a child is ill, but also when the parent needs to attend meetings regarding the child’s illness or disability, instruct staff on self‑care at preschool/school, or participate in social services’ investigations regarding the child’s need for support or protection.

Reduced employer contributions where no permanent establishment exists
A foreign employer without a permanent establishment in Sweden pays lower employer social security contributions than Swedish employers. The contribution is reduced by one percentage point to 18.80 percent, as the general payroll tax is increased by the same amount.

Key values for 2026

The price base amount and other key values affect a range of calculations within taxation, benefits, and social security contributions. Here are the established amounts for 2026:

• Price base amount:  SEK 59,200
• Increased price base amount:  SEK 60,500
• Income base amount:  SEK 83,400

These amounts affect, among other things, the calculation of car benefits, meal benefits, student aid, occupational pensions, as well as parental and sickness benefits.

Travel allowances in Sweden:

• Full day: SEK 300
• Half day: SEK 150
• Night: SEK 150
  
  

Meal benefits:

• Full day: SEK 310
• Breakfast: SEK 62
• Lunch/dinner: SEK 124

Highest tax‑free annual income:  SEK 25,041

Housing benefits:

Standardised values per square metre and month:

• Greater Stockholm: SEK 145
• Greater Gothenburg: SEK 131
• Greater Malmö: SEK 140
• Urban areas >75,000 inhabitants: SEK 127
• Other urban areas: SEK 110
• Rural areas: SEK 99

Government borrowing rate as of 30 November 2025:  2.55%.

This rate affects the calculation of car benefits, bicycle benefits, and interest benefits for 2026.

Legislative changes entering into force later in 2026

Temporary reduction of social security contributions for young people

The reduction applies from 1 April 2026 to 30 September 2027. Only the old‑age pension contribution and half of the remaining contributions are paid (20.81%) on remuneration up to SEK 25,000 per month.

• VAT on food
  VAT on food is temporarily reduced from 12% to 6% during the period 1 April 2026–31 December 2027.
• Tax‑free charging at the workplace
  Becomes permanent from 1 July 2026. The benefit of electricity provided by the employer at the workplace will not be taxed.
• Deduction for business travel with plug‑in hybrids
  Expanded from 1 July 2026. Tax‑free mileage reimbursement may be provided even when the plug‑in hybrid is charged free of cost at the workplace.
  

Several additional regulatory changes are under review and are expected to be decided later in 2026.