Q&A: What help is available for startups and freelancers in Sweden affected by the coronavirus?
Many people in Sweden who own their own business or work as freelancers are feeling the negative economic effects of the coronavirus crisis, which has disrupted supply lines and led to a decrease in consumption.
On March 25th the Swedish government presented several proposals primarily directed at the self-employed and small business owners.
Here are some of the situations that you may find yourself in, what help is available, and how to get it.
I have fallen ill or my doctor has told me to self-quarantine because I might be carrying the virus.
In case of illness, or if there is a likelihood that you are a carrier of the coronavirus, it is important you stay at home.
The government will temporarily cover the costs of sick pay for employers with a limited company based in Sweden. The usual 'waiting period' (known in Swedish as karensdag) has been suspended under these extraordinary circumstances, in order to reduce the spread of the coronavirus.
This means that you (or your employees) can apply for compensation from the first day of sick leave onwards, and this will be paid by the state. These new rules apply from March 11th to May 31st 2020.
The first day's sick pay will not be quite as high as typical sick pay for many workers, though. Under the temporary rules, all employees will receive 700 kronor before tax on the first day of sickness while all self-employed people will receive 804 kronor before tax, regardless of their salary, whereas usually sick pay is 80 percent of the usual salary.
You can also retroactively seek compensation for past sick days within this timeframe at the website of the Swedish Social Insurance Agency, Försäkringskassan.
If you are self-employed in Sweden you can apply for a standardized allowance for your first 21 days of illness including this first day. For more information and to apply for sick pay or sickness benefits, visit the Försäkringskassan homepage.
Note that the government has also temporarily scrapped the requirement for a doctor's note for sick pay. This means that you or an employee who has fallen ill can stay at home for up to two weeks without having to provide a doctor's note, and still be eligible for sick pay.
If a doctor has stated that you or one of your employees pose a risk because you (or they) might be a 'disease carrier' and therefore has told you to stay in quarantine, you (or your employees) are entitled to compensation in the form of a quarantine or 'disease carrier' allowance. You are also eligible for this allowance if you are self-employed.
In the case of compulsory quarantine, those who are self-employed are entitled to around 80 percent of their usual income and limited company owners may receive 80 percent of their estimated pre-tax salary they usually take from their business. Here you can find more information on what applies to your limited company and here you will find relevant information if you are self-employed.
CORONAVIRUS IN SWEDEN:
Photo: Henrik Montgomery/TT
I have difficulty paying my company's taxes.
Companies based in Sweden that are financially affected by the corona crisis can apply for a tax payment respite, which means that you are allowed to postpone paying (part of) your taxes.
The government has introduced different types of alleviations, including the postponement of employer contributions, deducted tax and VAT. The payment of these taxes can be deferred for up to one year from the day you have received the decision from Skatteverket, the Swedish Tax Agency.
You can request a payment deferral for up to three accounting periods between January and September 2020. In order to apply for a temporary respite, you can use the new digital 'payment respite service' in the My Pages section on the website of Skatteverket.
Those who are self-employed in Sweden and have been affected by the crisis can deduct 100 percent of their taxable profit for the year 2019 in their accrual fund. The maximum is one million kronor.
You will then be able to offset this amount against future losses. This means that many people can get back the preliminary tax they paid in 2019. Read more about how to reclaim preliminary taxes at Skatteverket (in Swedish), or call the agency on the phone.
I'm struggling to pay social security for myself or my employees.
The Swedish government has also proposed to temporarily reduce employers' social security contributions.
That means employers now only have to pay pension fees for yourself and your employees. This regulation is valid for up to 30 workers and exclusively for salaries under 25,000 kronor. It applies to the period between March 1st and June 30th 2020. The regulation enters into force on April 6th and will be overseen by Skatteverket.
Self-employed people based in Sweden are exempted from social security contributions apart from the pension fee, two-thirds of the other deductibles and the general salary contribution over 2020.
Here you can find more information (in Swedish).
I'm struggling to pay my business' rent.
If your company belongs to one of the sectors most vulnerable to the economic hardships set off by the coronavirus, such as the hotel, restaurant, and retail industry, the government has offered support that aims to help reduce your rent costs.
The state has pledged to account for 50 percent of the rent reduction and up to 50 percent of the fixed rent. This support can be applied for retroactively and will cover the period April 1st until June 30th 2020. More information can be found on the government's website.
Photo: Henrik Montgomery/TT
I'm struggling to pay my employees' salaries.
Many companies and employers are having a hard time staying afloat as they see the number of customers dwindle or because of disrupted supply chains.
In order for businesses to retain their staff and be able to get back up and running as soon as the crisis has been resolved, the government has come up with new regulations and allowances concerning korttidsarbete or short-term layoffs.
In case of a short-term layoff or reduced working hours, employees are entitled to around 90 percent of their usual income, even if their hours have been reduced by 20, 40 or 60 percent.
As their employer, you can apply for support at Tillväxtverket and receive up to 53 percent of your employees' salaries from the state. Employers can apply for this so-called korttidspermittering from April 7th onwards and receive compensation retroactively for temporary layoffs dating back to March 16th.
The maximum compensation employers can receive is 44,000 kronor per month per employee.
Labour unions and employers are expected to sign agreements on korttidspermittering, the short-term layoffs, first on a centralized level and subsequently at the relevant company. If there is no collective bargaining agreement in place, at least 70 percent of all employees must approve of and take part in the short-term layoff. The reduction of working hours and wages should be the same for all workers taking part.
The short-time work allowance program will remain in effect throughout 2020.
Moreover, companies that are made dormant in 2020, in the case of unemployment, are exempted from the rule that a company can only be made dormant once during a five-year period.
I could use a loan...
For small businesses operating in Sweden that are short of money during these difficult times, the government is easing up access to financing.
The state will inject 3 billion kronor of capital into Almi Företagspartner AB, which in turn offers loans to small and medium sized companies throughout the country. Almi has 40 offices across Sweden and can be reached by phone or through their website.
In addition to the measures taken by the government, the central bank has announced it will give out loans up to a total of 500 billion kronor. This will take place through the different Swedish banks, in order to safeguard supply, so you can turn to your company's bank to request this financial assistance.
The government has additionally guaranteed 70 percent of all new loans provided by banks to companies that have been affected by the crisis set off by Covid-19, but that are otherwise viable. The guarantee will be issued to the banks, which will provide these guaranteed loans to businesses.
Is there any other support I can get?
Apart from this national support package, most regions have separate regulations and support systems in place to help their local entrepreneurs. Here you can find the available business assistance in your region.
Comments
See Also
On March 25th the Swedish government presented several proposals primarily directed at the self-employed and small business owners.
Here are some of the situations that you may find yourself in, what help is available, and how to get it.
I have fallen ill or my doctor has told me to self-quarantine because I might be carrying the virus.
In case of illness, or if there is a likelihood that you are a carrier of the coronavirus, it is important you stay at home.
The government will temporarily cover the costs of sick pay for employers with a limited company based in Sweden. The usual 'waiting period' (known in Swedish as karensdag) has been suspended under these extraordinary circumstances, in order to reduce the spread of the coronavirus.
This means that you (or your employees) can apply for compensation from the first day of sick leave onwards, and this will be paid by the state. These new rules apply from March 11th to May 31st 2020.
The first day's sick pay will not be quite as high as typical sick pay for many workers, though. Under the temporary rules, all employees will receive 700 kronor before tax on the first day of sickness while all self-employed people will receive 804 kronor before tax, regardless of their salary, whereas usually sick pay is 80 percent of the usual salary.
You can also retroactively seek compensation for past sick days within this timeframe at the website of the Swedish Social Insurance Agency, Försäkringskassan.
If you are self-employed in Sweden you can apply for a standardized allowance for your first 21 days of illness including this first day. For more information and to apply for sick pay or sickness benefits, visit the Försäkringskassan homepage.
Note that the government has also temporarily scrapped the requirement for a doctor's note for sick pay. This means that you or an employee who has fallen ill can stay at home for up to two weeks without having to provide a doctor's note, and still be eligible for sick pay.
If a doctor has stated that you or one of your employees pose a risk because you (or they) might be a 'disease carrier' and therefore has told you to stay in quarantine, you (or your employees) are entitled to compensation in the form of a quarantine or 'disease carrier' allowance. You are also eligible for this allowance if you are self-employed.
In the case of compulsory quarantine, those who are self-employed are entitled to around 80 percent of their usual income and limited company owners may receive 80 percent of their estimated pre-tax salary they usually take from their business. Here you can find more information on what applies to your limited company and here you will find relevant information if you are self-employed.
CORONAVIRUS IN SWEDEN:
Photo: Henrik Montgomery/TT
I have difficulty paying my company's taxes.
Companies based in Sweden that are financially affected by the corona crisis can apply for a tax payment respite, which means that you are allowed to postpone paying (part of) your taxes.
The government has introduced different types of alleviations, including the postponement of employer contributions, deducted tax and VAT. The payment of these taxes can be deferred for up to one year from the day you have received the decision from Skatteverket, the Swedish Tax Agency.
You can request a payment deferral for up to three accounting periods between January and September 2020. In order to apply for a temporary respite, you can use the new digital 'payment respite service' in the My Pages section on the website of Skatteverket.
Those who are self-employed in Sweden and have been affected by the crisis can deduct 100 percent of their taxable profit for the year 2019 in their accrual fund. The maximum is one million kronor.
You will then be able to offset this amount against future losses. This means that many people can get back the preliminary tax they paid in 2019. Read more about how to reclaim preliminary taxes at Skatteverket (in Swedish), or call the agency on the phone.
I'm struggling to pay social security for myself or my employees.
The Swedish government has also proposed to temporarily reduce employers' social security contributions.
That means employers now only have to pay pension fees for yourself and your employees. This regulation is valid for up to 30 workers and exclusively for salaries under 25,000 kronor. It applies to the period between March 1st and June 30th 2020. The regulation enters into force on April 6th and will be overseen by Skatteverket.
Self-employed people based in Sweden are exempted from social security contributions apart from the pension fee, two-thirds of the other deductibles and the general salary contribution over 2020.
Here you can find more information (in Swedish).
I'm struggling to pay my business' rent.
If your company belongs to one of the sectors most vulnerable to the economic hardships set off by the coronavirus, such as the hotel, restaurant, and retail industry, the government has offered support that aims to help reduce your rent costs.
The state has pledged to account for 50 percent of the rent reduction and up to 50 percent of the fixed rent. This support can be applied for retroactively and will cover the period April 1st until June 30th 2020. More information can be found on the government's website.
Photo: Henrik Montgomery/TT
I'm struggling to pay my employees' salaries.
Many companies and employers are having a hard time staying afloat as they see the number of customers dwindle or because of disrupted supply chains.
In order for businesses to retain their staff and be able to get back up and running as soon as the crisis has been resolved, the government has come up with new regulations and allowances concerning korttidsarbete or short-term layoffs.
In case of a short-term layoff or reduced working hours, employees are entitled to around 90 percent of their usual income, even if their hours have been reduced by 20, 40 or 60 percent.
As their employer, you can apply for support at Tillväxtverket and receive up to 53 percent of your employees' salaries from the state. Employers can apply for this so-called korttidspermittering from April 7th onwards and receive compensation retroactively for temporary layoffs dating back to March 16th.
The maximum compensation employers can receive is 44,000 kronor per month per employee.
Labour unions and employers are expected to sign agreements on korttidspermittering, the short-term layoffs, first on a centralized level and subsequently at the relevant company. If there is no collective bargaining agreement in place, at least 70 percent of all employees must approve of and take part in the short-term layoff. The reduction of working hours and wages should be the same for all workers taking part.
The short-time work allowance program will remain in effect throughout 2020.
Moreover, companies that are made dormant in 2020, in the case of unemployment, are exempted from the rule that a company can only be made dormant once during a five-year period.
I could use a loan...
For small businesses operating in Sweden that are short of money during these difficult times, the government is easing up access to financing.
The state will inject 3 billion kronor of capital into Almi Företagspartner AB, which in turn offers loans to small and medium sized companies throughout the country. Almi has 40 offices across Sweden and can be reached by phone or through their website.
In addition to the measures taken by the government, the central bank has announced it will give out loans up to a total of 500 billion kronor. This will take place through the different Swedish banks, in order to safeguard supply, so you can turn to your company's bank to request this financial assistance.
The government has additionally guaranteed 70 percent of all new loans provided by banks to companies that have been affected by the crisis set off by Covid-19, but that are otherwise viable. The guarantee will be issued to the banks, which will provide these guaranteed loans to businesses.
Is there any other support I can get?
Apart from this national support package, most regions have separate regulations and support systems in place to help their local entrepreneurs. Here you can find the available business assistance in your region.
Join the conversation in our comments section below. Share your own views and experience and if you have a question or suggestion for our journalists then email us at [email protected].
Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.
Please log in here to leave a comment.