Pension-related tips ahead of the year-end accounts and the new year

Pension costs and tax deductibility are complex issues that require knowledge and clear routines and processes. Some mistakes are more common than others, and you can take steps to prevent them.

Occupational pensions can be complicated, so we want to help you understand the rules and what is particularly important to keep track of ahead of the new year.

How tax deductibility works and common mistakes

When it comes to the tax deductibility of pension costs, the basic principle is that the pension must be secured to qualify for a deduction. This can be done through pension insurance, a pension foundation, a balance sheet provision (which, as with ITP2 through PRI, requires credit insurance or a state or municipal guarantee), or certain foreign occupational pension institutions.

Pensions paid directly are always tax-deductible, in principle without restrictions on age, amount or payment period. However, limits on the amount apply to employees with a controlling interest in closely held companies.

The main rule for tax deductibility allows a maximum deduction of 35% of pensionable salary, capped at 10 price base amounts (for 2026, this is 592 000 kr). The deduction can be based on the pensionable annual salary for either the current or the previous year and normally requires an employment relationship.

The supplementary rule for tax deductibility is used when a pension is insufficiently secured or when a new agreement is made (such as an early retirement pension). It applies only to a single premium and involves a complex calculation based on factors including the accrual period, accrued pension and a defined maximum pension benefit.

Common mistakes relating to tax deductibility include:

• The tax-deductible amount has not been calculated at all, for example for ITP2 through PRI
• The tax-deductible amount has been calculated collectively rather than individually
• The supplementary rule has been applied incorrectly or not applied at all
• Pensionable salary has not been defined, resulting in an incorrect calculation basis

How special payroll tax works and common mistakes

Special payroll tax corresponds to the tax component of employer contributions and amounts to 24,26% of the tax base. It usually follows social insurance coverage, but is a tax. It is always tax-deductible, even if the pension cost is not.

Payroll tax must always be recognised in the period when the pension is accrued, rather than when it is paid.

Some common mistakes relating to special payroll tax that you should pay particular attention to are:

• Incorrect allocation to accounting periods and errors arising from final invoices, advance payments and refunds
• The surplus fund is overlooked, but must be included
• Employees working abroad are handled incorrectly

Specific challenges for employers with employees working abroad

If you have employees working abroad, there are additional challenges to consider, as tax legislation and the design of occupational pensions vary greatly between countries. Depending on the type of employment, length of service, the country in which the employee works, and whether the employee is covered by a collective agreement. Handling employees working abroad incorrectly can be costly for both you as the employer and your employee.

Read more about the challenges of overseas employment.

If you feel unsure about the administration, we at FörsäkringsGirot are here to help. With over 30 years of experience, we now help over 200 clients secure their employees’ occupational pensions.

Contact us to find out how we can help you manage occupational pensions correctly and reduce risks.