Taxes, tax returns and social security

Professional artists often have different types of income, such as income from employment, from business activities or from hobby activities. Since many social benefits are designed on the basis of permanent employment, understanding taxes and benefits can be tricky.

Get an overview of what you need to know in terms of taxes, tax returns, unemployment insurance, pension, housing allowances, housing supplements and more.

You can read more about the different topics in the Artist’s Guide handbooks, accessible from the grey boxes. You can also order a printed copy.

Report your income and pay taxes

Income can be taxed according to three categories: personal earned income, capital gains and business income. This distinction is made because there is a difference in how these different income types are taxed.

Sole proprietorships (unincorporated businesses)

Profit in a sole proprietorship is taxed as business income, including income tax and social security contributions or a special payroll tax, depending on whether you have an active or a passive business.

Limited liability companies

As a working owner in your company, you are employed in the limited liability company and can take out a salary. When you receive a salary from your limited company, it counts as employment in terms of both taxes and compensation from the Swedish Social Insurance Agency, such as for sickness and parental benefits.

Read more about other business structures and taxation in the handbook Business Planning for Professional Artists (in Swedish).

Some grants are taxable

Multi-year grants (long-term working grants) awarded by the Swedish Arts Grants Committee and the Swedish Authors’ Fund are taxed as earned income from employment. This mainly applies to periodic grants that are paid out for a period longer than two consecutive years.

On the other hand, so-called one-off grants, such as our one- and two-year working grants, are tax-exempt. The grantor does not deduct preliminary tax and does not pay employer’s social security contributions. If you receive a tax-exempt grant, you should not include the grant amount in your income tax return.

If you are unsure of what you need to think about in terms of tax liability when you have received a grant from us, you can read more about it on Konstnärsnämndens stipendier, skatt och trygghetssystem.

Income from employment

Salary and other benefits paid by an employer or client are considered earned income from employment. It does not matter whether the work is temporary or permanent.

The following income sources are also taxed as income from employment:

Compensation from, for example, the Swedish Social Insurance Agency (Försäkringskassan) and pensions
Sickness benefits based on income from business activities.

Hybrid income

Many artists have income from employment and their own business at the same time. Such people are often referred to as hybrid entrepreneurs.

Example 1: You are employed as an art teacher and get paid for that job. At the same time, you have an assignment as a freelance artist to design a public space.

Example 2: You are an actor who alternates being employed with projects you carry out in your own business.

Capital gains

Interest, dividends or rent you receive when renting out are examples of capital gains. If you have income from employment and, for example, receive rent for equipment that you have lent out, you might owe tax on the capital gains.

Note: If, on the other hand, you are running a business and have invested money in equipment that you rent out, you should report that rent as business income.

Hobby activities – occasional income

Hobbies are not your main occupation. If you only expect to receive a few individual assignments, it is not considered a business activity, even if the assignments are carried out independently and you do them with the intention of making a profit. Such temporary income can be regarded as income from a hobby.

You declare profit from hobby activities as income from employment, and you pay your own social security contributions. If you have a loss, you do not need to report this at all.

About hobby activities – Swedish Tax Agency (Öppnas i ett nytt fönster)

Income tax returns and VAT

Once a year, you must file a tax return with the Swedish Tax Agency (Skatteverket) where you report your income and expenses. If you have a business that must pay value-added tax (VAT), you must charge VAT to your customers or clients.

Health insurance and parental insurance

For artists, who often have fluctuating incomes, the social security regulations are complicated. Learn more about sickness benefits and parental benefits.

Unemployment insurance

Unemployment insurance can provide you with financial support for a limited period of time while you are looking for jobs and assignments. This is important for artists to know since they often have short-term contracts and sole proprietorships.

Pensions

If you have your own business, or combine a business with employment, you need to think a little more about your future pension and often supplement it with some form of personal savings.