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Country Guide

Sweden

Hiring employees in Sweden at a glance

CURRENCY
Swedish krona (SEK)
WORKING HOURS
40 hours
PUBLIC/BANK HOLIDAYS
13 days
CAPITAL
Stockholm
LANGUAGE
Swedish
REMOTE WORKERS
1,127,214
MINIMUM HOURLY SALARY
No minimum wage
TAX YEAR
Any 12-month period, but commonly the same as the calendar year
DATE FORMAT
DD / MM / YYYY
MISCLASSIFICATION PENALTIES
fines include backpay for statutory employee benefits and rights (vacation, overtime, etc), plus additional penalties for not fulfilling their employer obligations, presenting incorrect data and misclassification of the employee.
FUN FACT
Sweden is the country with the highest number of patents per capita in Europe.

Taxes

Employer taxes: 

31.42%

Social insurance: 31.42%, which includes General payroll contribution, Retirement, Health insurance, Labour market fee, Parental Insurance, Survivors Pension, and Work Injury

Employee tax: 

37%-62%

Pension 7%

Income tax:
Income
Progressive National Income tax
Municipal Income Tax
Up to SEK 613,900
0%
32%
More than SEK 613,900
20%
32%

Sweden Employment Cost Calculator

Use our handy calculator to understand what are all the employment costs you have to consider in Sweden.

Provide us with some extra details and we will send you a full breakdown of the salary costs.

Employer of Record in Sweden

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While an Employer of Record is the most typical way for legally employing a worker in a different country where the company doesn't have an entity, in Sweden we directly employ your worker. Doing this, we take care of all Sweden compliance aspects of employment, including payroll, taxes, statutory benefits, employment contracts and more.

the employer of Record is responsible for:

Ensuring their employment is compliant with Swedish employment laws
Processing local payroll
Filing employment related taxes and returns
Issuing payslips to the employee
Distributing salary payments

How employment in Sweden works

COMPANY

Maintains a direct relationship with the employee, allocates them work tasks, and manages their performance.

BOUNDLESS

Takes care of payroll, taxes, benefits, ensuring the employee and the company are compliant with all legal regulations.

EMPLOYEE

Signs an employment contract with Boundless and fulfils all of their obligations as a worker for the company.

Statutory Benefits in Sweden

Pension

In Sweden, all residents are entitled to a state-financed guaranteed minimum pension.

Workers' compensation insurance

Swedish Employers are required to cover all employees from the possibility of suffering an injury in the workplace by setting up a workers’ compensation insurance fund.

Common Non-mandatory Benefits in Sweden

Private healthcare plan
Work flexibility
Sabbatical leave
Supplementary pension
Training
Relocation package
Gym membership
Flexible working hours
Fika break

Employee Rights and Protections

Written employment contract
Payslip
Equal pay
Health & Safe working environment
Reasonable accommodation
Right to priority for re-employment
Written job conditions
Personal information protection
Protection from harassment and discrimination

Leave

Paid time off: 25 days + bank holidays

Paternity leave: 10 days

Sick leave: 90 days. The first 14 days are covered by the employer and the reminder by Försäkringskassan (the Swedish social insurance office), for which the employee has to apply

Parental leave: 480 days

Maternity leave: 14 weeks

Probationary period

The probationary period in Sweden can be a maximum of six months.

Payment Frequency

Sweden employees get paid monthly.

End of Employment

Swedish companies must have objective grounds (not defined by law) in order to dismiss an employee.

Alongside a valid reason for termination, companies must also present the notice of dismissal in writing at least 2 weeks in advance, containing information regarding the existence of priority to re-employment and how the employee should proceed if they wish to challenge the termination.

Before a company can proceed with an employee’s termination, they must explore other employment alternatives, such as relocating or changing roles in case of redundancy.

Employees who become unemployed or partially unemployed are entitled to unemployment benefits (ersättning från a-kassa) for up to 300 days.

Frequently Asked Questions

What are my options if I want to hire a worker in Sweden?

While there are generally four ways of employing people across borders, not all are legal or sensible. Here is an overview of each way to employ a worker in Sweden, outlining the potential cons.

 

HQ country employment & payroll

While the person is in Sweden, they are employed and payrolled directly by the company’s HQ entity.
Cons: This may appear attractive, but it generally isn't legal in the long term. HQ payroll won't be possible if the person is not a tax resident in the HQ country.

 

Independent contractor agreements

People are locally registered as sole traders or limited liability company owners in Sweden and invoice for their work. There is no direct employment relationship.
Cons: In Sweden, this is not a compliant or legal way to engage full-time workers who work solely for your company. There will be challenges in attracting and retaining talent.

 

Direct local employer setup

The company sets up as a fully-compliant local employer. This often involves setting up a local entity and local tax registration.
Cons: Expensive, time-consuming, high-level of complexity. Unknowns around how obligations and costs will evolve over time. There will be a need to stay on top of changes in regulations.

 

Employment through a local entity established by an Employer of Record for the purposes of employment

Employment is handled by a platform that specialises in employing people on behalf of customer companies. The Employer of Record helps to hire and pay employees.
Cons: For some countries, the ongoing costs may be higher than direct employment. Some education is needed to inform employees about how the employment relationship will work.

How long does it take to set up a company in Sweden?

Setting up a local company in Sweden is relatively straightforward. However, the difficult part comes after the initial setup when payroll needs to be calculated and run every month, taxes filed, benefits extended, change of rules and regulations followed. Here is an overview of everything an employer in Sweden needs to do for their Sweden employees.

Can I employ people as independent contractors in Sweden?

While many employers practice employing remote workers as independent contractors, it's a bad practice. If an individual is giving their full and undivided attention to your company in Sweden, treating them as an independent contractor is a likely breach of Swedish employment laws and of those in your country.
 
Your company could be liable for fines on owed holiday pay, sick pay, social welfare payments, paternity benefit, maternity benefit, or other legal measures. Since the individuals you are working with do not receive the benefit of local employment laws and protections that are often afforded to people working full-time hours.
 

What does HR compliance mean in Sweden, and why does it matter?

When you hire employees in Sweden, you have certain obligations as an employer. HR compliance is about ensuring your policies and procedures respect all applicable laws and regulations regarding employment and work practices. Complying with local employment law in Sweden is fundamental for the correct running of your business - not only because these laws are in place to protect employees and guarantee their rights are safeguarded, but to minimise your risk of liabilities as an employer. Being compliant means respecting and following all local labour laws, sick leave and illness benefits, annual leave, minimum wage, tax credits, working hours regulations.

How much does it cost to employ someone in Sweden?

As with every other country, certain costs are associated with employing a worker in Sweden that come on top of the gross salary you are offering. A Swedish employer must make social security contributions based on each employee’s total taxable remuneration monthly. To view the exact percentages and amounts given the salary you are planning to offer, you can use our handy calculator tool.

What does Employer of Record mean in Sweden?

While an Employer of Record is the most typical way for legally employing a worker in a different country where the company doesn't have an entity, in Sweden, the model doesn't exist. Instead, an Employer of Record directly employs a worker through a company specifically established for that purpose. The employee then provides their services to the client company. We are responsible for:

  • informing you about any pre-employment requirements
  • ensuring their employment is compliant with Swedish employment law
  • informing you about the length of the maternity leave, paternity leave, public holidays, illness benefits, medical benefits
  • providing a locally compliant employment agreement
  • processing local payroll
  • filing employment-related tax returns
  • issuing payslips to the employee
  • distributing salary payments
  • payments to the local tax authorities
Customers that work with Boundless in Sweden are responsible for the following:
  • sourcing and recruiting their own workers
  • managing the employee’s day-to-day work load
  • contributing to the personal / professional development of the employee through their work
  • following any guidance we give on employment and HR best practices or legal obligations in Sweden, such as the employment contract, public holidays, annual leave, sick leave, maternity and paternity benefits, probationary periods, overtime pay, statutory redundancy payments, liability insurance and many others
  • ensuring that payroll bills relating to their team are paid to Boundless before the cut-off point in each pay cycle

Who is responsible for filing and paying employees' taxes and social insurance contributions in Sweden if employing through an Employer of Record?

Boundless as the Employer of Record Sweden that has established an entity specifically for the purposes of employing on behalf of customers, files all pertinent taxes and contributions as they relate to the compliant employment of an individual in Sweden.

How does Boundless as a company employing workers in Sweden ensure HR compliance?

We carefully choose employment lawyers or advisories to partner with in each country we operate in, including Sweden. They ensure the Sweden employment contracts, and any other relevant documents required for new employees comply with the local jurisdiction. We have thorough discussions on specific norms such as payroll services, social protection, data protection, notice period or work-from-home regulations. Whenever a potentially sensitive issue arises in Sweden, our internal team contacts the relevant firm to ensure all steps are taken to resolve it promptly.

What are the legal responsibilities of a company when they use an employing company such as Boundless in Sweden?

The company remains responsible and informs employees of the day-to-day management of the people and teams that are employed through Boundless, including any disciplinary or performance issues.
 
Boundless ensures compliance with Sweden-specific procedures, practices and labour laws while employing people and teams on behalf of the company.

Do employees get all their rights and benefits when employed through a separate employing entity in Sweden?

Any new employee that is locally employed through an Employer of Record that has set up a company specifically for the purposes of employing on behalf of customers, gets full employment rights and benefits as specified in Swedish employment law. They get a locally compliant employment contract, statutory maternity leave, annual leave, illness benefits, any relevant tax credit, and many more. 

What taxes do I need to pay in Sweden?

In , both employers and employees have to pay taxes. Swedish employers make social security contributions, which includes General payroll contribution, Retirement, Health insurance, Labour market fee, Parental Insurance, Survivors Pension, and Work injury. Employees make pension contributions, and pay national income tax and municipal income tax. To get a clear overview of both employee and employer taxes, use our salary breakdown calculator, submitting any additional data needed and get a downloadable pdf like this one.

Choose Boundless as your employment partner in Sweden
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