Compliance
Preliminary Tax (PAYE)
System where employers deduct income tax from salaries before payment.
Definition
The Pay As You Earn (PAYE) system, referred to as 'preliminär skatt' in Sweden, is a method where employers are legally obligated to deduct an estimated amount of income tax directly from an employee's salary or wages each month. These deducted amounts are then remitted to the Swedish Tax Agency (Skatteverket) on behalf of the employee. This system ensures a continuous collection of income tax throughout the year, rather than a single annual payment by the employee.