October 05, 2022

A salary cap will apply to Sweden’s collectively agreed upon occupational defined contribution pension (ITP1) from 1 January 2023, applicable to all employees born after 1978. 


  • Introduction of a salary cap for individuals born after 1978 who are accruing an ITP1 pension. Individuals will not receive pension contributions on earnings that exceed 30 income base amounts (equivalent to SEK 177,500 per month in 2022). The ITP1 cap is the same amount applicable to defined benefit (ITP2) for individuals born before 1979.
  • Increased age for accruing an ITP1 defined contribution pension to 66 — the age applicable to ITP2 defined benefit pensions is unchanged.
  • Increased eligible age for an ITP disability pension to age 66 for both ITP1 and ITP2 pensions.

In addition:

  • ITP1 pensionable salaries are reported on a monthly basis, which means that employees paid a yearly bonus could exceed the salary cap for that particular month, and will not be entitled to pension contributions on bonus payments exceeding the salary cap.
  • As the ITP1 is part of a collective agreement, employers are not legally required to compensate employees for "“lost” company contributions, unless a separate contractual agreement is in place. 
  • Employees eligible for the ITP2 defined benefit who earn a salary exceeding 10 income base amounts can currently elect to switch to ITP1 if their employer allows it. Some higher paid employees may have switched to benefit from the absence of an ITP1 salary cap.


ITP1 is a defined contribution pension that covers salaried employees who were born in 1979 and after beginning at age 25. Currently, ITP1 employer contributions equal 4.5% of salary up to SEK 44,375, and 30% of the amount exceeding SEK 44,375. IPT2 is a defined benefit pension that covers salaried employees born in 1978 or before. The ITP occupational pension scheme was agreed to by the Council for Negotiation and Cooperation for Salaried Employees (PTK) comprising 27 trade unions representing 860,000 private sector salaried employees, and the Confederation of Swedish Enterprise representing 49 member organizations and 60,000 member companies.

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