How to hire and pay employees in Sweden

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Sweden Facts and Stats

Currency

Swedish Krona (SEK)

Employer Costs

32.42% – Social security contributions

Languages

Swedish

Population

10.6 million

Payroll frequency

Monthly

Hiring

Grow your team in Sweden

Emerald can hire and payroll your workers, quickly and compliantly with their ready to go entity. Make growing your team simple with Emerald as a global partner.

Pros & Cons of hiring in Sweden

Hiring employees in Sweden offers several advantages and some challenges. On the positive side, Sweden has a highly educated, skilled, and multilingual workforce, known for its strong work ethic and expertise in technology, engineering, and innovation. The country’s stable economy and advanced infrastructure further enhance the business environment, making it easier for companies to operate efficiently. Additionally, Sweden’s commitment to work-life balance and employee welfare can lead to high levels of employee satisfaction and productivity.

However, there are challenges, such as the high cost of labour, including substantial employer social contributions and taxes, which can increase overall employment costs. Additionally, Sweden’s strict labour laws, particularly around job security and employee rights, can make it difficult and costly to terminate contracts. This regulatory framework, while beneficial for workers, requires careful navigation by employers to avoid legal complications. Overall, Sweden offers access to top talent but demands a thorough understanding of its employment laws and cost structures.

Why Sweden is good for remote workers

Employers should consider hiring remotely in Sweden due to the country’s exceptional digital infrastructure and a workforce that is well-versed in remote working practices. Sweden consistently ranks high in global connectivity and internet speed, making it an ideal location for seamless remote collaboration.

The country’s cultural emphasis on innovation and autonomy aligns well with remote work, where employees are typically self-motivated and accustomed to flexible working environments. Additionally, by hiring remotely in Sweden, companies can tap into a diverse pool of highly skilled professionals without the need to navigate the higher costs and regulations associated with physical operations in the country. This allows businesses to benefit from Sweden’s talent while maintaining flexibility in their operations.

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Benefits

Mandatory Benefits

Pension contributions

Workplace insurance

Employment

Probation

A maximum of 6 months

Emerald Technology can onboard employees in Sweden within 48 hours.

Leave Policy
01.

Maternity Leave

A minimum of 60 days before the child’s birth and 29 days afterwards, paid by social security at around 80% of the salary.

02.

Paternity Leave

An additional 10 days outside of parental leave.

03.

Parental Leave (if applicable)

Employees are entitled to a total of 480 days of parental leave, which can be used until the child turns 8 years old. This leave is shared between both parents and can be split into up to three separate periods within a calendar year. Both parents can take leave simultaneously, known as “double days,” for up to 60 days, but these double days must be used before the child reaches 15 months. If parents share joint custody, they can each transfer 45 days of their leave to another person who is eligible for parental leave. In cases of sole custody, the parent can transfer up to 90 days to another insured individual.

04.

Sickness Leave

2 – 14 days are paid at 80% of the salary by the employer. Beyond this period a percentage of the salary is covered by social security for up to 90 days.

Onboarding

Onboarding

As the legal employer, Emerald Technology requires the following employee documents to ensure complete compliance:

Emerald Technology can onboard employees in Sweden within 48 hours.
Termination

Resignation and Dismissal

When an employer dismisses an employee it must be with just cause and they must give them notice. The notice period starts from the day after the employer notifies the employee of the termination. Notice must be given in accordance with the following schedule at a minimum:

30 days if employment is less than two years.

60 days if employment is between two and four years.

90 days if employment is between four and six years.

120 days if employment is between six and eight years.

150 days if employment is between eight and ten years.

180 days if employment is more than ten years.

Severance

If an employee is made redundant, they are entitled to a payment based on years of continuous service.

There are no laws for severance pay in Sweden.

Time off

Statutory Time off

25 days per year for a full-time employee.

Public Holidays

  • New Year’s Day
  • Epiphany
  • Good Friday
  • Easter Monday
  • International Workers’ Day
  • Ascension Day
  • National Day of Sweden
  • Midsummer’s Day
  • All Saints’ Day
  • Christmas Day
  • Boxing Day (Second Christmas Day)
Emerald Technology can onboard employees in Sweden within 48 hours.
Salary / Taxes

Work, Pay and Taxes

01.

Minimum Wage

There is no National minimum wage in Sweden.

02.

Working Hours

40 hours (five days of eight hours)

03.

Overtime

Overtime payment Is not mandatory in Sweden and can be included in the salary. Employees can work a maximum of 150 hours per year.

04.

Salary Payments

Monthly

05.

Bonus or 14th month salary (if applicable)

There is no law suggesting any bonuses are necessary.

06.

Income Tax

Annual Income (SEK) Tax Rate
Up to 20,200 SEK 0%
20,201 – 537,200 SEK 30% (municipal tax)
Over 537,200 SEK 30% (municipal tax) + 20% (state tax)
07.

Health Insurance

Health Insurance in Sweden is publicly funded by the government and through taxes which ensures all citizens and legal residents receive necessary medical services, such as primary care, specialist care and hospitalisation. There is no mandatory health insurance as residents are automatically covered by the system. However, employers contribute to the system through payroll taxes.

Worker misclassification in Sweden

Similar to other countries, Sweden has strict rules on classifying individual contractors and full-time employees differently. Misclassifying your workers can put your business at risk of fines.

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