Car benefits
If you are offered a car benefit by your employer, there are several important things to bear in mind. Read on to find out more.
A car benefit can be offered by the employer in different forms, for example a company car, a leased car or compensation for the use of a private car during working hours.
When you use a company car or service vehicle in your work, your employer is responsible for your work environment and insurance cover. In consultation with you, your employer must ensure that ergonomics, safety and other work environment-related matters are handled appropriately.
If, on the other hand, you are expected to use your privately-owned car in your work, you and your employer need to regulate the fine print regarding costs, liability and insurance cover during working hours in an agreement.
Regardless of the arrangement, it is important that you are aware of the rules that exist at your workplace regarding the use of a company car/service vehicle/private car for work.
Service vehicle
A car that is only used for work and not privately is a service vehicle. Such a vehicle is not normally a taxable benefit.
Company car
A company car that is used privately more than what is regarded by the Swedish Tax Agency as to a minor extent is to be regarded as a car benefit and is therefore subject to taxation. A company car that is used privately is known as a benefit car and is taxed at a flat rate based on the monetary value of the benefit. If the employer pays for fuel for private use, you will also be taxed for the value of that benefit.
See the Swedish Tax Agency's website for more details (in Swedish)
Fuel for a benefit car
Make sure that it is clear how fuel is paid for and by whom – you or the employer – and under what conditions.
Driving log for benefit cars
Keep a driving log to show fuel used for work and for private use: you need to be able to provide a record of mileage driven for work, otherwise you will be taxed on the entire fuel cost, including travel for work.
Reimbursement of fuel costs
Keep a driving log to show your own expenses for mileage driven for work.
Electric car as a company car
The number of electric cars used as company cars has increased in recent years. The Engineers of Sweden members’ magazine Ingenjören has written a useful and interesting article on what to think about if you have an electric company car:
Electric car as a benefit – what to bear in mind (article in Swedish)
Car benefits and taxation
The Swedish Tax Agency's website has detailed information about what is important for you to be aware of (in Swedish).
Car benefits and pensions
If you are offered a car benefit in the form of a salary exchange, i.e. instead of part of your gross monthly salary, this can impact your pension negatively. The precise effect depends on your income level and what occupational pension solution you have.
Points that should be covered by an agreement regarding a company car
- The parties to the agreement: the employer and employee respectively
- The benefit value of the car
- The right to use the company car privately, (i.e. as a benefit car), who is permitted to drive the car and any other restrictions on use need to be stated and described clearly
- Which party, (employer or employee), pays for fuel, and under what conditions.
- Does the employer cover some or all of the other costs linked to use of the benefit car at work and perhaps also privately? For example, matters such as mileage compensation, running costs, service costs, road/bridge/toll charges, parking costs, leasing costs and so on should be specified in the agreement.
- What rules apply during longer leave/absence, for example parental leave, sick leave or exemption from obligation to work? Can you keep the car or do you need to return it while you are away from work? Who covers the cost of the benefit during this period – the employer or you?
- What insurance cover applies and who is liable for the excess/deductible in the event of incidents such as accidents should be stipulated clearly.
- If the car has had previous owners, the agreement should state that the new owner is exempt from liability for previous wear and tear, for example after a final inspection before ownership is transferred.
- Regulate in the agreement whether and how the benefit can be terminated by either party, as well as financial considerations, for example wear and tear costs when the car is returned, compensation instead of the car benefit etc.
