High standard of living
The Swedish welfare system — often referred to internationally as The Swedish Model — can be described as providing lifetime benefits for all citizens. It is a social and economic system whose guiding principles are full employment, equal pay for equal work and the collective welfare of society as a whole. Salaries are comparable with other industrialized countries and Swedish residents enjoy a very high quality of life, consistently placing Sweden near the top of the United Nations Human Development Index.
A good life
By most standards, life is comfortable in Sweden. Education is free from six years of age to university, and most health care and pension benefits are paid for by employer and income taxes. Take, for example, an average couple in Sweden who both work full time. They are likely to have a three-room apartment and may have a small summer cottage in the countryside. The couple is able to afford a car and a yearly vacation abroad.
Like all other workers in Sweden, they also enjoy a minimum of five weeks of paid vacation per year, along with paid sick leave. If they have a child, they are entitled to up to 480 days of paid parental leave. The couple is also allowed up to a combined 120 days of paid leave per year to care for sick children.
During adulthood, parents in particular are able to enjoy a good balance of work and family life. After retirement, elderly citizens are supported by pensions and services made possible by the taxes and contributions paid during their working years.
Sweden sees many of these benefits as necessary rights for everyone, regardless of income or social status. They help to make sure that all children are educated and healthy, and that people from all parts of society are offered equal opportunities. But it's also understood that people have to contribute to make this inclusive system work, and most Swedes seem content with what they get for the taxes they pay. It is a collective effort; if everyone contributes, everyone benefits.
Paying taxes in Sweden is very straightforward: employers pay payroll taxes on top of your salary every month, income taxes are deducted directly from your monthly salary and value-added taxes are included in the price of food, goods and services. Every person is taxed individually, even when married. If everything appears correct on your mandatory annual tax declaration, reporting your taxes can be as simple as sending a text message from your cell phone to the Swedish Tax Agency to confirm this.
While Swedish residents tend to pay relatively high taxes, the rewards are generous. And surprisingly for some, Sweden has neither inheritance tax nor wealth tax, and the real estate tax rate is lower than in many other developed nations.
It is also easy to see where your tax money goes in Sweden. Health care, education and public transport are widely seen as among the best in the world. Government military spending is quite low, while peacekeeping missions and foreign aid are top priorities. And despite relatively little spending on prison systems and law enforcement, life in Sweden is very safe.
So-called key foreign personnel are also offered a 25 percent tax break, where 75 percent of their salary is taxed according to Swedish tax laws, and the remaining 25 percent is entirely tax-free for the first three years of residency. Key foreign personnel include those holding vital positions in a company, experts, engineers, scientists in a broad range of fields and those able to offer unique expertise that is not readily available in Sweden.
Sweden spends more of its gross domestic product (GDP) on social services than any other country in the world, according to recent OECD statistics. The money goes to fully tax-financed education and heavily tax-subsidized health care, among other things. Everyone who lives in Sweden is entitled to extensive tax-funded services and benefits.
All Swedish residents have access to medical services, education is tax financed from the age of six and all elderly people receive a basic pension guaranteed by the state. For those who lose their jobs, unemployment insurance is available, and many continuing education and retraining programs are entirely tax-financed.
On top of these basic benefits, many workers enjoy other advantages based on their salary, sector or workplace. Certain white-collar workers or management-level employees, for example, can earn significantly higher pensions due to the nature of their work.
Sweden’s solidarity doesn’t stop at the borders. Sweden is a global leader in foreign aid contributions, measured in per-capita spending. Sweden supports sustainable development, public health projects and peacekeeping missions around the world.