5 ms·

Please see this: https://en.wikipedia.org/wiki/Non-wage_labour_costs https://en.wikipedia.org/wiki/Non-wage_labour_costs https://sv.wikipedia.org/wiki/Arbetsg

by berntb 10y ago

Please see this: https://en.wikipedia.org/wiki/Non-wage_labour_costs https://en.wikipedia.org/wiki/Non-wage_labour_costs https://sv.wikipedia.org/wiki/Arbetsgivaravgifter_i_Sverige https://sv.wikipedia.org/wiki/Arbetsgivaravgifter_i_Sverige I wrote "a third of the money the company pays for his wages", so I assume that is ignored in the "taxes" report you reference. Just these "social charges" (as I called them) is 31.42% already (just ten percent lower than the OECD report).

vidarh 10y ago
Those are included in the OECD total tax wedge numbers. EDIT: The reason your numbers don't add up is that you can't just add those numbers together with income tax numbers - you also then need to add the amount paid by the employer to the salary to get the gross amount paid for a worker, and recalculate the percentage from the total base.
- berntb 10y ago
  I know the definition. I also know that just the "hidden" cost not presented to people as "tax" is 31.42% of the salary. The tax rate in itself is generally around 30%. So something is rotten in Den.. Swedish data. :-) Anyway, it doesn't change my original argument really. I ignored lots of other costs per employee to sell repair time. Edit: It is probably that the lowest amount to pay taxes on have been raised a lot since I lived in Sweden. Your data might be correct, at least for people with a low income. (The numbers are too big with 31.42% added to the sum and 30% tax for that to result in 41%.) Edit 2: Regarding total tax and calculation. https://en.wikipedia.org/wiki/Taxation_in_Sweden#Example_of_salary_taxation_through_PAYE https://en.wikipedia.org/wiki/Taxation_in_Sweden#Example_of_...
  - vidarh 10y ago
    > (The numbers are too big with 31.42% added to the sum and 30% tax for that to result in 41%.) Salary is the original "100%" here, but the cost to the business is higher than that, and so if we are to talk about the cost to the business we need to adjust the percentages accordingly. 100% + 31.42% is the total expense to the business. So 30% of salary and 31.42% of salary = 61.42% of salary, but only 46.74% of the total expense. But most people will have well below 30% income tax. E.g. here's the Swedish tax authority's own examples of income tax rates paid: http://www.skatteverket.se/privat/skatter/arbeteochinkomst/sabeskattasdinlon.4.54a3d27615036ac09f316ce.html http://www.skatteverket.se/privat/skatter/arbeteochinkomst/s... Average salary in Sweden is around the ~375,000 SEK, putting typical income tax for someone on an average salary towards the lower end of the 23% range 28% somewhere from that table. Using 23% in the calculation above, we'd end up with a tax wedge of 41.4%. With 28% we end up at 45.2%. This is before any additional deductions. It's close enough to the OECD numbers that if you were to look at the basis data and assumptions underlying the OECD report (it's all public), and/or go through the actual tax calculations that the above table is based on, and make sure the years match up, I'm pretty sure you'd get it to match. So let's say it's in a range somewhere around 41% and 45%. > Edit 2: Regarding total tax and calculation. https://en.wikipedia.org/wiki/Taxation_in_Sweden#Example_of_.. https://en.wikipedia.org/wiki/Taxation_in_Sweden#Example_of_.... That page uses headline rates without actually considering that the tax rates are not applied to the gross salary, but to taxable income, adjusted for various deductions. It totally confuses matters and is clearly written by someone who doesn't understand how tax works. It bears little relation to reality.
    - berntb 10y ago
      Seems totally correct to me -- and is also what I had in the first "Edit:", except the details. :-) The taxes were lowered substantially for ~ the first 18K SEK of monthly income by the previous government. (This boon for low income employees is denounced as a rightwing extreme design by the present lefty government, so it might be solved.) I ignored the details since I didn't really need it for my argument to explain why the total costs make service industry almost impossible.

by berntb 10y ago

vidarh 10y ago

Those are included in the OECD total tax wedge numbers. EDIT: The reason your numbers don't add up is that you can't just add those numbers together with income tax numbers - you also then need to add the amount paid by the employer to the salary to get the gross amount paid for a worker, and recalculate the percentage from the total base.

berntb 10y ago
I know the definition. I also know that just the "hidden" cost not presented to people as "tax" is 31.42% of the salary. The tax rate in itself is generally around 30%. So something is rotten in Den.. Swedish data. :-) Anyway, it doesn't change my original argument really. I ignored lots of other costs per employee to sell repair time. Edit: It is probably that the lowest amount to pay taxes on have been raised a lot since I lived in Sweden. Your data might be correct, at least for people with a low income. (The numbers are too big with 31.42% added to the sum and 30% tax for that to result in 41%.) Edit 2: Regarding total tax and calculation. https://en.wikipedia.org/wiki/Taxation_in_Sweden#Example_of_salary_taxation_through_PAYE https://en.wikipedia.org/wiki/Taxation_in_Sweden#Example_of_...
- vidarh 10y ago
  > (The numbers are too big with 31.42% added to the sum and 30% tax for that to result in 41%.) Salary is the original "100%" here, but the cost to the business is higher than that, and so if we are to talk about the cost to the business we need to adjust the percentages accordingly. 100% + 31.42% is the total expense to the business. So 30% of salary and 31.42% of salary = 61.42% of salary, but only 46.74% of the total expense. But most people will have well below 30% income tax. E.g. here's the Swedish tax authority's own examples of income tax rates paid: http://www.skatteverket.se/privat/skatter/arbeteochinkomst/sabeskattasdinlon.4.54a3d27615036ac09f316ce.html http://www.skatteverket.se/privat/skatter/arbeteochinkomst/s... Average salary in Sweden is around the ~375,000 SEK, putting typical income tax for someone on an average salary towards the lower end of the 23% range 28% somewhere from that table. Using 23% in the calculation above, we'd end up with a tax wedge of 41.4%. With 28% we end up at 45.2%. This is before any additional deductions. It's close enough to the OECD numbers that if you were to look at the basis data and assumptions underlying the OECD report (it's all public), and/or go through the actual tax calculations that the above table is based on, and make sure the years match up, I'm pretty sure you'd get it to match. So let's say it's in a range somewhere around 41% and 45%. > Edit 2: Regarding total tax and calculation. https://en.wikipedia.org/wiki/Taxation_in_Sweden#Example_of_.. https://en.wikipedia.org/wiki/Taxation_in_Sweden#Example_of_.... That page uses headline rates without actually considering that the tax rates are not applied to the gross salary, but to taxable income, adjusted for various deductions. It totally confuses matters and is clearly written by someone who doesn't understand how tax works. It bears little relation to reality.
  - berntb 10y ago
    Seems totally correct to me -- and is also what I had in the first "Edit:", except the details. :-) The taxes were lowered substantially for ~ the first 18K SEK of monthly income by the previous government. (This boon for low income employees is denounced as a rightwing extreme design by the present lefty government, so it might be solved.) I ignored the details since I didn't really need it for my argument to explain why the total costs make service industry almost impossible.