Hire in Sweden
Sweden PEO &
Employer of Record
Hire & manage teams remotely in Sweden without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
Business Language
Swedish, English
Salary Currency
Swedish Krona (SEK)
Payroll tax
31.42%
Payroll Cycle
Monthly
Time zone
UTC +2
Capital city
Stockholm
Hire Employees in Sweden
The NNRoad Advantage ☺
Pay as you go
Global account manager
Compliance
Fast Onboarding
Foreigner Visas
Platform
Employer of Record in Sweden
01.
Candidate Selection
02.
Employee Onboarding
03.
Compliance & Payroll
04.
Payroll Reporting
Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, coordination for interviews, and assistance for salary negotiation.
Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).
On-boarding and off-boarding employees following labor law practice.
Complete payroll solution and benefit administration
Employee management – employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law.
Mandatory insurance compliance (i.e. pension, labor and health insurance) according to the local labor laws.
Payment management (Invoicing customers/clients and vendor payments).
Work VISA application assistance, if needed.
Local individual income tax reporting.
Payroll & PEO in Sweden
01.
Compliance & Payroll
02.
Payroll Reporting
Registering the necessary company and personnel information for payroll calculation in the payroll software and system
Monthly Payroll Processing
Year-End Adjustment and Annual Declaration
Taxes & Payroll in Sweden
Employee Income Taxes:
The tax rate ranges from 32% to 57%, depending on the level of income, with an additional municipal tax that varies by location. Sweden also has a generous social welfare system, which is partly funded by tax revenue.
As such, individuals can benefit from various public services, including healthcare, education, and parental leave. However, it is important to note that Sweden has a complex tax system, with various deductions and exemptions that individuals need to be aware of. It is advisable for individuals to seek the guidance of a tax expert to ensure compliance with Swedish tax laws.
Tax Brackets
Sample Calculation
Employer Costs in Sweden
Individual income taxes in Sweden are among the highest in the world, with a progressive tax system that aims to promote income equality. The tax rate ranges from 32% to 57%, depending on the level of income, with an additional municipal tax that varies by location. Sweden also has a generous social welfare system, which is partly funded by tax revenue.
As such, individuals can benefit from various public services, including healthcare, education, and parental leave. However, it is important to note that Sweden has a complex tax system, with various deductions and exemptions that individuals need to be aware of. It is advisable for individuals to seek the guidance of a tax expert to ensure compliance with Swedish tax laws.
Employer Contribution
Payroll contribution: 11.62%
Retirement pension: 10.21%
Health insurance: 3.55%
Unemployment insurance: 2.64%
Parental insurance: 2.60%
Survivor’s pension: 0.60%
Occupational injury insurance: 0.20%
Total costs: 31.42%
Employee Contribution
Pension insurance: 7%
Total cost: 7%
Benefits & Insurance in Sweden
Mandatory BenefitsPension Fund
Mandatory contributions in Sweden refer to the payments that every citizen or resident must make towards the country’s social security system. These contributions are deducted from an individual’s salary or income and are used to fund programs such as healthcare, pensions, and unemployment benefits. The Swedish social security system is known for providing a comprehensive safety net to its citizens, and mandatory contributions play a crucial role in financing it.
The amount of contribution is based on a percentage of an individual’s gross income, and the rates vary depending on the type of benefits covered. The Swedish government also provides additional support to low-income earners to ensure that mandatory contributions do not become a financial burden.
Employees are required to make a 7% contribution to social security, this contribution is included in income tax and is deducted by the employer at source together with preliminary income tax.
Employees do not need to pay general pension fees on the part of their income that exceeds SEK 501,000 (2020).
All employers in Sweden pay statutory social security contributions on behalf of their employees, consisting of charges for pensions, health insurance and other social benefits. These contributions amount to 31.42 per cent of gross salary. For employees between 15 and 18 years of age the contribution is reduced to 10.21%. Employer contributions come on top salary costs and are payable for any employee or contractor who has earned SEK 1,000 or more during the year.
Working Hours in Sweden
Working hours and overtime laws in Sweden are designed to promote work-life balance and ensure fair compensation for employees. The standard workweek in Sweden is 40 hours, with a maximum of 48 hours per week, including overtime. Overtime is typically compensated at a higher rate, with a minimum of 50% higher pay for work performed outside of normal working hours. Swedish law also mandates rest breaks, with a minimum of 30 minutes for every six hours worked.
Employees are entitled to at least 25 days of paid vacation per year, as well as paid sick leave and parental leave. Employers must ensure compliance with these laws to avoid penalties and litigation. However, it is important to note that flexible work arrangements, such as part-time and remote work, are becoming increasingly popular in Sweden, and employers are encouraged to offer these options to promote employee satisfaction and productivity.
Working Hours Per Week
Regular working time may not exceed 40 hours per week. In certain industries when it is necessary for the employee to carry out work activities, on-call time may be claimed up to a maximum of 48 hours per employee over a period of 4 weeks or 50 hours per calendar month.
Overtime
If overtime is required, it can go up to a maximum of 48 hours per employee over a period of four weeks, or 50 hours over a calendar month, with a maximum of 200 hours over a calendar year.
Termination Laws in Sweden
Termination laws and severance pay in Sweden are governed by the Employment Protection Act, which is aimed at protecting employees from unfair dismissal. Under this act, employers must have a valid reason for terminating an employee’s contract, such as redundancy or poor performance. If an employee is terminated without a valid reason, they can seek compensation through the labor court.
Additionally, employees who have worked for at least 12 months are entitled to severance pay, which is calculated based on their length of service and salary. The amount of severance pay is a minimum of two and a maximum of 24 months’ salary, depending on the length of service. Employers are also required to provide notice periods of up to six months, depending on the employee’s length of service.
The termination procedure varies depending on the terms of the Employment Agreement and Collective Agreement, as well as the type of contract and grounds for termination. However, without the Employee Insurance Agency, no termination for economic reasons or long-term incapacity can occur (UWV).
The notice periods in Sweden are outlined in the employment contract, collective bargaining agreement of the Employment Protection Act.
Severance
Severance pay is outlined in the employees’ employment contract/collective agreement; there is no legal obligation to pay any severance.
Notice Period
| Duration of employment | Notice period |
| Less than 2 years | 1 month |
| Two years but less than four years | 2 months |
| Four years but less than six years | 3 months |
| Six years but less than eight years | 4 months |
| Eight years but less than ten years | 5 months |
| Ten years or more | 6 months |
Employment Contract in Sweden
Employment Contract
An employment contract in Sweden is a legally binding agreement between an employer and an employee that outlines the terms and conditions of their employment. The contract must comply with Swedish labor law and cannot be less favorable to the employee than what is stipulated by law or collective bargaining agreements. The contract typically includes details such as the job title, job description, working hours, salary, benefits, notice periods, and termination conditions.
The minimum notice period required by law is one month, but longer notice periods may be agreed upon by the parties. An employment contract in Sweden may be for a fixed term or an indefinite period, but if an employee has worked for the same employer for more than 12 months, they are entitled to a permanent contract. Employers are required to provide a written employment contract within one month of an employee starting work.
Indefinite term
If no fixed term is specified, the employment relationship will continue unless further notice is given. The probationary period for an open-ended employment relationship is six months.
Fixed-term
The general fixed-term employments and temporary substitute contracts will be automatically transformed into indefinite-term employment when the employment exceed 2 years during a 5-year period.
Probation Period
The Employment Protection Act permits probationary employment for a period of no more than six months. If the employment is not terminated before the expiry of the probationary period, the employment will automatically become employment for an indefinite term.
Types of Leaves in Sweden
Annual Leave
Fulltime: 25 full days of annual leaves every year regardless of age or employment type.
If employee enter into new employment after 31 August in any given year, then he is only entitled to 5 full days of vacation until 1 April the following year.
As a general rule, the employer decides when the employees are to take their annual vacation. In some workplaces, the main annual vacation is decided by the local union club and employer. The employer must notify the annual vacation dates no later than two months before the start of the employee’s vacation.
Sick Leave
In order to obtain sick pay, you must be employed for at least 1 month or have worked continuously for 14 days. If you are away from work for more than 7 days due to sickness, you must provide a medical certificate.
| Compensation | Amount (% of income) |
| Sick pay from employer | 80% |
| Sickness benefit at normal level | 80% * 0.97 (max. SEK 810 per day) |
| Sickness benefit at continued level | 75% * 0.97 (max. SEK 759 per day) |
Maternity & Paternity Leave
Parents in Sweden are entitled to 480 days of paid parental leave when a child is born or adopted. Each parent (if there are two of them) is entitled to 240 of those days. A single parent is entitled to a full 480 days.
Public Holidays in Sweden
Public holidays in Sweden are regulated by the Swedish Holiday Act and consist of both Christian and secular celebrations. There are a total of 11 public holidays in Sweden, including New Year’s Day, Epiphany, Good Friday, Easter Monday, May Day, Ascension Day, National Day, Midsummer’s Eve, Christmas Eve, Christmas Day, and Boxing Day. Many Swedes celebrate these holidays with family gatherings, traditional foods, and various cultural activities.
Some of the most important public holidays in Sweden are Midsummer’s Eve, which falls on the Friday between June 19th and 25th and is celebrated with outdoor festivities and the raising of the maypole, and Christmas, which is a major holiday season that spans from December 24th to January 13th. Public holidays in Sweden are observed nationwide, and most businesses and public services are closed on these days.