This is how we apply the government borrowing rate

The government borrowing rate is a reference rate used in tax law. The Debt Office sets the government borrowing rate every Thursday and the rate is applicable from Friday until the following Thursday.

We also calculate an average value for the government borrowing rate over the year to date. This average is the basis of the average government borrowing rate set by the Swedish Tax Agency each year.

In Swedish, the government borrowing rate is usually referred to by its abbreviation, SLR.

Reflecting the long-term risk-free market rate

The government borrowing rate is set based on the central government’s average interest on long-term loans. It is calculated as the average market rate for government bonds that have a residual maturity of at least five years. The government borrowing rate must reflect the long-term risk-free market rate.

Other uses

The government borrowing rate is also used to calculate tax rates on pension insurance, endowment insurance and investment savings accounts. When tax is calculated for various savings instruments, the government borrowing rate at the end of November is used along with the average government borrowing rate from the previous year.

The government borrowing rate is also used to calculate tax on certain employment benefits.