Making money in Sweden can be quite a tricky task, but we have 3 tips on how to make money in Sweden for you. To many people’s surprise there is no legal minimum wage in Sweden meaning that all salaries are based on the free market. Despite this, salaries in Sweden tend to be quite high compared to other European countries. The median salary in Sweden during 2020 was 32,400 SEK (approximately 3,500 USD or 3,100 EUR).
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High wages, high tax burden
Although Sweden has relatively high wages it also has a rather high tax burden. The average income tax rate of 29-35%, a VAT rate of between 6-25% (depending on the goods), and a capital gains tax of approximately 30%. However, these taxes provide a lot of social security for the people that live here. Pension, healthcare, unemployment benefits and schooling are all funded by taxes so the financial safety net that you need to have in Sweden is significantly lower than in many other countries.
Since Sweden can be quite an expensive place to live we have created a short guide on our top tips for how to make (and more importantly save) money in Sweden.
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Get a good paying job
This one is quite obvious so not much needs to be said here. Finding a well paying job can sometimes be quite difficult so we would recommend that you read our article here on how to find a job in Sweden as a foreigner.
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Find a cheap place to live
What many foreigners don’t know is that Sweden has rent control. This means that if you own an apartment, you can’t rent it out for however much you want. The owner can only add on an additional 15% to their own costs if they are renting out a furnished apartment. If you see housing ads where the monthly rent is 20,000+ SEK for a small apartment, in most cases having that kind of rent will be illegal. It is therefore best to avoid these places. If you are looking to rent an apartment in Sweden we would recommend using blocket.se as they have many listings with reasonable prices. If you are instead looking to buy an apartment the best website to use is “Hemnet” (only available in Swedish). Buying an apartment in Sweden will generally result in a cheaper monthly cost but it will require a rather large amount of money up front (15% of the sale price).
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Investing
Investing is by far the best way to make money in the long run. In Sweden investing has been made quite easy as most banks provide investment services and the banking apps you can download on your phone generally have a easy interface. For investing we would recommend using Avanza as they have great customer service and a very user-friendly app. However, if you are a US citizen (or hold a green card in the US) you will not be able to use Avanza. In this case we would recommend using Nordnet instead
When choosing to invest in Sweden there are generally two types of accounts that you can open up. The first is a standard stock trading account (“Aktie- och fondkonto”) or a stock savings account (“investeringssparkonto”/ISK). As previously mentioned, the capital gains tax in Sweden is generally 30% meaning that a standard stock trading account can be quite expensive. The ISK account is therefore a good option where you are instead taxed on average 1-2% annually on your total account balance. We would recommend that you look into both of these options when opening an investing account with a bank.