Salary and tax deduction for a nanny in Sweden

Are you new in Sweden and considering hiring a nanny for your kids? Or are you planning on moving to Sweden and bringing your nanny along? Diretto.se is a digital payroll bureau for people who hire help at home. We will explain what you need to know about, paying salary and tax for your nanny in Sweden. Also, did you know that you can get a tax deduction called rutavdrag when you employ your own nanny? We’ll explain how.

“Rutavdrag” – tax deduction for your nanny in Sweden

If you have an income in Sweden you would be entitled to a tax deduction called rutavdrag. It applies to childcare, cleaning and certain other household services. The maximum allowance is 75,000 SEK per person, as a couple you have 150,000 kr. When you employ your own nanny in Sweden you get to deduct the cost of the employer’s tax (a compulsory tax that the employer has to pay on top of the gross salary). If you pay your nanny 120 sek per hour it would cost you 120 sek after rut tax deduction.

This is different from when you buy childcare services from an agency then you get to deduct 50% of the cost but the agency needs to add VAT so it’s still cheaper to employ on your own.

Link to calculate your estimated maximum rutavdrag (sorry but it’s in Swedish)

Employing a nanny vs hiring through a childcare agency

You can choose between employing a nanny yourself or hiring a babysitter via an agency. If you only need help with babysitting occasionally, then it’s convenient to contact a company that provides babysitting services. The advantage is that the company would do the recruitment and selection process for you so it saves time. However if you need many hours of child care you would save a lot of money if you employ the nanny yourself. Then you just pay the salary without the profit markup that the agency would add. Here is a typical example of the difference in cost:

What salary do I need to pay a nanny in Sweden?

Surprisingly Sweden has no minimum salary. However in order to know what’s a fair salary for a nanny in Sweden there are collective agreements that can provide guidance.

Here is a link to recommended minimum salaries for a nanny /babysitter based on the collective agreements. It’s in Swedish but hopefully you can google translate it. How much do I pay the babysitter?

Special rules for non EU au pair

Do you want to bring or employ a nanny who is not from the EU? Then the best thing is to apply for a visa as au pair. The minimum salary to get a visa as an au pair is 3,500 sek + free food and accommodation. You also need to provide opportunity for the au pair to study Swedish and you need to provide insurances.

The purpose of the au pair concept is cultural exchange. The au pair should learn about Swedish culture and be treated equally to a family member. Only light household work + babysitting is permitted for an au pair. There is a limit of 25 hours of work per week. There are less regulations for au pairs from EU who do not require a visa.

The tax rules are the same for a nanny and an au pair in Sweden. See also: Paying salary to an au pair in Sweden with rut tax deduction

A live-in nanny is a practical and economical solution

If you have an extra room, hiring a nanny who lives in your home is a practical and economical solution. The ordinary work hours of a nanny should not exceed 40 work hours per week (on an average of three weeks). If you live in Stockholm or some of the major cities providing accommodation for your nanny is a valuable benefit and makes recruitment easier. The value of a place to stay is worth 5-6,000 per month so the salary that you need to offer can be reduced by the value of the benefits that you provide.

As an example if you hire a nanny for 30 hours per week in Stockholm and provide free food and accomodation + a gross salary of 7,500 sek, this would be equivalent of 120 sek per hour. The cost for you would be 7,500 sek per month excluding the cost of vacation (vacation costs are about 13%)

Free food and accommodation are considered taxable benefits in Sweden. The taxable value for these benefits are 1500 and 600 sek respectively. This is way lower than the market value of these benefits and this is also why it’s the most economical solution. If the tax rate for your nanny in Sweden is 20%, then the tax on these benefits would be 420 sek per month.

How much tax does a nanny pay on the salary in Sweden?

You should not make employment agreements based on net salary for your nanny in Sweden. This is because the level of tax for a nanny can vary a lot based on factors that are not controlled by you as an employer. If you hire a nanny who is a Swedish resident it’s pretty straight forward, you can calculate how much tax the nanny would pay at Skatteverkets website (the tax office). As an example, a part time nanny who makes 8,000 sek per month would pay 11% tax. It’s the employer who deducts the tax.

If your nanny or au pair recently moved to Sweden it’s a bit more complex to estimate the tax. The level depends on length of stay in Sweden and if the nanny will make money in another country in the same year as making money in Sweden. You are welcome to create an account with us and we will help you at support@diretto.se

Monthly employer’s tax declaration and payslip

As an employer of a nanny in Sweden you would have to send an employer’s tax declaration every month. In this document you declare the nanny’s salary and any benefits, the tax you have deducted from the nanny’s salary + the employer’s tax and the rut tax deduction. The declaration and the tax that you have deducted from the nanny’s salary should be sent to the tax office.

If you pay a babysitter less than 1,000 sek in one year there is no tax and no need to send the declaration but as soon as it’s over 1,000 sek the salary needs to be reported to the tax office.

There is also a requirement to give the nanny a payslip stating the gross salary, the benefits and the tax deduction.

Diretto – makes it easy to handle tax for any household employees

Do you find this complicated? Then you are welcome to use the services of Diretto.se. You create an account and add information about your employee. You will be guided step by step through the process. We make it easy to handle the tax for your nanny – completely by the rules in Sweden. If you get stuck we have support in English.

Do you need a template employment contract in line with Swedish employment law? Welcome to contact us and we’ll send you our template!