Employer of Record in Sweden

Businesses can only operate smoothly in Sweden if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Sweden below, to avoid any compliance issues.

Employment Contract Requirements

In Sweden, employers must provide a written agreement outlining the specifics of the employment arrangement. They are obligated to communicate the following terms to employees within a week or month of commencing their employment:

• Identification of both parties
• Starting date
• Workplace and working hours
• Contract duration
• Job title and description
• Payment information
• Overtime hours and pay
• Notice period for termination and changes to working hours
• Collective agreement (if applicable)
• Training by employer (if applicable)
• Paid annual leave entitlements
• Rules for termination
• Employers social security contribution

Onboarding Process

We can help you get a new employee started in Sweden quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Sweden

The regular workweek in Sweden spans 40 hours across five days, and after 5 consecutive working hours, employees are entitled to a break.

Overtime in Sweden

According to Swedish Labour Law, any hours worked beyond the standard 40 hours per week qualify as overtime and must be compensated. The monthly limit for overtime is capped at 50 hours.

Although there is no statutory requirement for overtime pay, the compensation details are typically outlined in employment contracts or relevant collective agreements.

Probation Period in Sweden

The employment contract or collective agreement typically sets a probationary period of up to 6 months. If termination doesn't occur within this period, employment automatically becomes permanent. The employer must give a two-week notice before the probationary period ends, with the salary and benefits remaining the same.

Fiscal Year in Sweden

1 January - 31 December is the 12-month accounting period that businesses in Sweden use for financial and tax reporting purposes.

Payroll Cycle in Sweden

The payroll cycle in Sweden is usually monthly, with employees being paid on the 25th of the month.

Minimum Wage in Sweden

There is no established minimum wage in Sweden. They instead rely on collective agreements to determine wage standards, which may vary based on certain factors, such as age, skill level, and seniority.

Bonus Payments in Sweden

In Sweden, there is no legal requirement for employers to provide 13th-month payments; bonuses are left to the discretion of the employers.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 31.42% on top of the employee salary in Sweden.

Employee Payroll Tax Contributions

In Sweden , the typical estimation for employee payroll contributions cost is around 7.00% - 8.03%%.

Individual Income Tax Contributions

Income tax is computed using progressive rates in Sweden. Factors like household status, the number of children, and the employee's municipality of residence, can influence the overall tax rates.

Pension in Sweden

In Sweden, with no set retirement age, employees can start their public pension from 63, work until 69, and receive higher benefits with a later retirement and higher salary. The pension is capped at 7.5 times the annual income base amount. Many also receive occupational pensions from employers, and private pensions are optional.

Mandatory Leave Entitlement in Sweden

The annual leave entitlement in Sweden is 25 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Sweden

Sweden observes 13 public holidays each year, which are separate from the minimum paid leave entitlement and are taken in addition to the annual leave. The following are Sweden's officially recognised national holidays:

Paid Time Off in Sweden

After a year of service with a 2.08 monthly accrual, employees get 25 paid vacation days per year (often 30). Beyond the initial 20 days, excess days can be carried over to the next year. Accumulated vacation days, up to 12% of the annual salary, can be retained for up to five years.

Maternity Leave In Sweden

There is no statutory maternity leave in Sweden due to the comprehensive parental leave system. However, pregnant women who have physically demanding jobs or are working in environments that may pose a risk to their health or the unborn child can take leave before the birth. This benefit can be accessed for up to 50 days before the expected delivery date.

Paternity Leave In Sweden

In Sweden, spouses are elgible to 10 days of paid paternity leave.

Sick Leave In Sweden

Employers in Sweden cover paid sick leave from the 2nd to the 14th day, providing compensation at a rate of 80.00% of the regular pay. Sickness exceeding 14 days is reimbursed by Social Security at a rate of approximately 80%. The first day of sickness is unpaid. If sick leave extends beyond 7 calendar days, a sick note is required.

Parental Leave In Sweden

Employees in Sweden receive 480 days of parental leave, which can be divided between parents or taken by one parent. This leave can also be utilised to reduce working hours until the child reaches 8 years old.

Termination Process in Sweden

In Sweden, terminations without cause are not permitted, but can be initiated by either the employer, employee, or through mutual agreement. Both parties must give proper notice to terminate the contract. Acceptable terminations include:

• Voluntarily by the employee
• Mutual agreement
• Contract expiration
• Unilaterally by the employer (due to reasons like the probationary period, objective justifications, performance issues related to job suitability, misconduct, collaboration issues, or refusal to work)

Notice Period in Sweden

The notice periods are specified in the employment contract or collective bargaining agreements. Individuals covered by collective agreements have a one-month notice period stated in their employment contract. For those without a collective agreement, the notice period is determined by the duration of their employment:

• Less than 2 years of service: 1 month notice
• 2-4 years of service: 2 months notice
• 4-6 years of service: 3 months notice
• 6-8 years of service: 4 months notice
• 8-10 years of service: 5 months notice
• More than 10 years of service: 6 months notice

Severance in Sweden

Severance is not obligatory in Sweden, but it may be necessary if specified in a collective agreement or individual employment contract.