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Hiring in Sweden? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Sweden
Employment Norms in Sweden
Sweden's labor market is built to protect workers and promote work-life balance. With high unionization and collective bargaining agreements, employment norms are set to ensure fair wages and working conditions for most workers. Plus, Sweden's generous policies on parental leave, sick leave, and vacation time make it a great place to work. If you need help managing your employees, EOR services can assist with legal compliance and effortless employee management.
General Information:
- The Sweden currency is the Swedish Krona (SEK).
- Stockholm is the capital of Sweden.
- Swedish is the official language of Sweden. Documentation like contracts and other legal documents is done in both Swedish and English.
- As of 2022, the GDP of Sweden is estimated to be around SEK6.1 trillion or approximately USD708 billion
Table of Contents
- Agreements
- Onboarding Process
- Visa
- Minimum Wage
- Payroll Cycle
- Annual Bonus
- Health Benefits
- Working Hours and Overtime
- Leaves
- Social Security
- Taxes for Employers
- Taxes for Employees
- Probation
- Termination
- Severance Pay
- Employees or Contractors
- Final Words
AgreementsOnboarding ProcessVisaMinimum WagePayroll CycleAnnual BonusHealth BenefitsWorking Hours and OvertimeLeavesSocial SecurityTaxes for EmployersTaxes for EmployeesProbationTerminationSeverance PayEmployees or ContractorsFinal Words
Agreements
- These agreements can help to foster a sense of ownership and commitment among employees, which can lead to improved performance and productivity.
- In Sweden, legal contracts are typically written in Swedish.
- The most common types of employment contracts are permanent contracts, fixed-term contracts, probationary contracts and freelance agreements, common for self-employed individuals.
- Employers must provide a written employment contract within one month of the start of employment, outlining terms such as salary, working hours, and notice periods.
Onboarding Process
- Employee onboarding in Sweden typically involves providing new employees with information about the company and their role with training and support to ensure a smooth transition into the new role.
- Mandatory documents to be submitted for onboarding include employment contracts, tax forms, and proof of identity.
- In the absence of established onboarding process laws, best practices may include providing a detailed introduction to the company culture, offering a tour of the workplace, and assigning a mentor to guide the new employee.
Visa
Sweden has several types of Visas:
- A short-term employment work visa for foreign nationals is offered for up to 6 months.
- A long-term employment work visa for foreign nationals is offered for more than 6 months and can be extended for up to two years.
- A self-employment visa is for foreign nationals to start a business or work as a freelancer in Sweden.
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Minimum Wage
Sweden does not have a legal minimum wage, but most workers are covered by collective bargaining agreements that set minimum wages ranging from SEK13,000 to SEK24,000 per month.
Payroll Cycle
In Sweden, payroll cycles are typically monthly, with payments made at the end of each month. Employers are required to deduct taxes and social security contributions from employees' salaries, and to report these deductions to the Swedish Tax Agency.
Annual Bonus
There's no legal requirement for an annual bonus in Sweden. Best practices include considering company performance and employee contributions.
Health Benefits
- Employers in Sweden provide occupational healthcare services for their employees as a legal requirement.
- Best practices for health benefits include offering flexible working hours, healthy meal options, and ergonomic workstations to promote employee well-being.
Working Hours and Overtime
- Work hours: The standard workweek in Sweden is 40 hours with a maximum of 8 hours per day.
- Break: Employees are entitled to a break of 30 minutes for every five hours of work.
- Overtime: Overtime work is voluntary, limited to 48 hours per week, and compensated with extra pay or additional time off.
Leaves
Sick Leave
Employers are responsible for paying 80% of the employee's sick leave for the initial 14 days. For more than 14 days of sick leaves, employees must apply for long-term illness benefits at Swedish Social Insurance Office.
Parental Leaves
- Paternity and maternity leaves are counted as parental leaves in Sweden and both parents have the same rights.
Maternity leaves
- Female employees can avail of maternity leaves of 240 days. They should take 49 days before the child's birth and 49 after the birth of the child. The remaining days of leaves are divided with the partner.
- 80% of the employee's salary is given to them for the first 195 days. After that, they are paid 180 SEK per day for the rest of the 45 days. Swedish Social Insurance Agency pays for these leaves.
Paternity leaves
- Employees are allowed to take 240 days of paternity leave. They are allowed to take leaves of 10 additional days either after or before the child's birth. The payment for paternity leave is the same as it is for maternity leaves. 80% salary is given for the initial 195 days and then for the remaining 45 days, employees get 180 SEK per day, paid through Swedish Social Insurance Agency.
Annual leaves
- Regardless of the number of hours worked per week, annual leave in Sweden is a minimum of 25 days per year.
Public Holidays (for the Calendar year 2023)
- January 1 - New Year's Day
- January 6 - Epiphany
- April 14 - Good Friday
- April 16 - Easter Sunday
- May 1 - May Day
- May 25 - Ascension Day
- June 6 - National Day
- June 24 - Midsummer's Day
- November 4 - All Saints' Day
- December 25 - Christmas Day
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Taxes for Employers
- General Payroll Tax - 11.62%
- Contribution to Health Insurance - 3.55%
- Parental Insurance - 2.60%
- Retirement Pension Contribution - 10.21%
- Contribution to Survivors' Pension - 0.60%
- Labor Market Fee - 2.65%
- Occupational Injury - 0.20%
The total employer contribution is 31.42%.
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Taxes for Employees
For employees, taxes are calculated based on their income.
These tax rates are progressive and based on many factors such as employee status, the total number of children, and the employee's residential location or municipality.
- For employees with gross income is upto SEK 598,500:
- National Tax Rate: 0%
- Municipal Tax Rate: 32%
- For employees with gross income is upto SEK 598,500:
- National Tax Rate: 20%
- Municipal Tax Rate: 32%
- Social : 7%
Probation
In Sweden, a probationary period is a defined period during which an employer can evaluate a new employee's performance and suitability for the job and lasts usually for 1-6 months. It allows employers and employees to end the employment relationship without notice or compensation.
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Termination
- Termination of employment in Sweden can occur for reasons such as redundancy, poor performance, or misconduct
- Employers must follow strict legal procedures and provide valid reasons for the termination. Employees have the right to challenge the termination in court if they believe it was discriminatory or unjustified.
- When an employee resigns in Sweden, they must give written notice and are entitled to receive accrued vacation pay and other benefits.
Severance Pay
- Severance pay was not mandatory in Sweden, but it can be provided if it was included in the employment contract or collective bargaining agreement.
- However, there may be changes to the law or agreements in the future that could affect severance pay in Sweden.
Employees or Contractors
- In Sweden, conventional employment contracts are the most common type of contract used by employers.
- These contracts outline the terms and conditions of employment, including job duties, working hours, compensation, and benefits.
- Misclassifying an employee as a contractor or vice versa can result in penalties such as fines, back payments for unpaid taxes and social security contributions, and potential legal action by the misclassified worker.
- It is essential to ensure proper classification to avoid legal and financial consequences.
Final Words
Sweden offers a great environment for both employers and employees. With a strong social welfare system and generous benefits, employees enjoy good working conditions, work-life balance, and ample opportunities for career growth. Employers benefit from a highly skilled workforce, flexible employment laws, and a stable economy. Overall, Sweden is a great place to work and build your career!
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