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Sweden
As a well-developed export economy, Sweden’s economy offers a number of opportunities for international businesses looking to expand.
If you are interested in expanding your business or looking to employ workers within Sweden, we are pleased to provide the below key information about the Swedish employment market.
Expanding into Sweden
Key facts
Contract Types
In Sweden contracts can be Fixed Term or Indefinite. Fixed Term contracts with the same employer, exceeding 2 years during a 5-year period, automatically become permanent. Contracts are often governed by Collective Bargaining Agreements (CBAs).
Probation
The maximum probation period is 6 months for those on indefinite contracts. The employee must be given notice a minimum of two weeks before the end of probation if the contract is not going to be permanent.
Working Hours
Normal working hours are 40 hours over a 5 day week.
Overtime
The maximum hours which can be worked are 48 hours per week. Overtime is paid at 15 to 200%, or time off in lieu can be given. Contracts can state that gross salary includes overtime and overtime rules do not apply to managerial roles.
Other Financial
Salaries are paid on a monthly basis on the 25th of each month. Any benefits offered must be offered to all employees. There is no 13th month salary requirement in Sweden.
Tax rates valid for: 2024
Corporation Tax: 20.6%
Consumption Tax: 25%
12% and 6% reduced rates on certain products
Employers’ Social Security: 31.42%
Employees’ Contributions: 7% – normally fully tax creditable so effectively nil
Income Tax Rates
Tax free allowance: Up to 614,000 SEK – 32%
Lower rate: Over 614,000 SEK – 52%
Non-residents: Flat rate – 25%
Comment:
Depending on the place of residence, municipality tax of 29.08-35.15% is also due, for example in Stockholm the rate is 29.8%, before calculating income tax. The maximum deduction is SEK 36,700.
Average municipality taxes are included in the income tax rates above.
Notice
The notice period will be set out in the contract or CBA and is typically 1 month. If there is no notice stated in the contract, or there is no CBA, then notice periods are dependent on service and are as follows:
- Less than 2 years – 1 month
- 2 to 4 years – 2 months
- 4 to 6 years – 3 months
- 6 to 8 years – 4 months
- 8 to 10 years – 5 months
- More than 10 years – 6 months
Payment in lieu of notice is subject to agreement and the employment contract.
During Probation
14 days’ notice is required by both parties during probation.
Severance Pay
There is no mandatory severance payment in Sweden, but it may be included in the CBA or the employment contract. It may also be offered to secure a mutual agreement to termination; typically, 3 months’ salary would be offered.
Redundancy
No redundancy can take place without notification of the Employee Insurance Agency. This is also the case for terminations due to long term disability.
Employers must attempt to find an alternative role for those being made redundant and must ensure the selection criteria for those being made redundant are fair and objective to avoid claims of discrimination.
If an employee is a member of a trade union, if the company has a collective agreement or if there is a trade union in the workplace, the trade union must be invited to negotiations before the dismissal takes place.
Should the employee sue for wrongful dismissal and demand reinstatement and the employer refuses, then damages could be 16 to 32 months’ salary.
Paid Public Holidays: 11
New Year’s Day – 1st January 2024
Day Given in Lieu – No
Epiphany – 6th January 2024
Day Given in Lieu – No
Good Friday – 29th March 2024
Day Given in Lieu – NA
Easter Monday – 1st April 2024
Day Given in Lieu – NA
Labour Day – 1st May 2024
Day Given in Lieu – No
Ascension Day (Thursday 40 days after Easter) – 9th May 2024
Day Given in Lieu – NA
National Day – 6th June 2024
Day Given in Lieu – No
Midsummer ‘s Day – 22nd June 2024
Day Given in Lieu – No
All Saints’ Day – 2nd November 2024
Day Given in Lieu – No
Christmas Day – 25th December 2024
Day Given in Lieu – No
Boxing Day – 26th December 2024
Day Given in Lieu – No
Comments:
Public holidays falling on Sunday not included
Paid legal entitlement (working days)
In Sweden, the standard annual leave entitlement is 25 days. Employees are required to utilize at least 20 days of paid holiday each year, with any unused mandatory leave days carrying over to the following year, along with any additional days stipulated in the contract.
Normal paid entitlement
It is common for employees to receive 30 days’ leave, but the CBA may provide for more. Leave is often linked to age or special agreements.
Carry over permitted
20 days must be taken and 5 days (or more if the entitlement is over 25 days) can be carried over each year for a maximum of 5 years.
Timings
The vacation year is from the 1st April to 31st March. It is common that vacation taken is earned in the previous year, but companies may choose to allow holiday to be taken in the year of accrual. In this case, when an employee starts during the year, the number of days from this date can be pro rated.
Payment in lieu allowed
Unused leave of 5 days can be paid out rather than be carried over, and all unused accrued leave must be paid out on termination.
Holiday Allowance
A daily vacation premium of 0.43% of the employee’s monthly salary is paid in addition to salary in the month following the leave.
Some companies also pay holiday allowance which is 12% of the employee’s gross annual salary; this is only paid if the employee is not paid usual salary during his vacation.
Sick
There is no pay for the first day of sickness. From the 2nd to the 14th day the employer pays sick pay at 80% of salary, thereafter, it is paid by the social insurance office. Parents who miss work to take care of a sick child up to the age of 12 can also receive compensation for lost income.
Maternity, Paternity and Parental Leave
New mothers must take 2 weeks’ maternity leave after the birth. Fathers are entitled to 10 days within 2 months of the birth.
Additionally, both parents in Sweden are entitled to 480 days of leave between them. 90 days are reserved for each parent, but the rest can be allotted as the couple see fit. Parents can only take 30 days of this leave at the same time. The leave can be taken in a maximum of 3 blocks per year and is available until the child is 12. Parental leave is paid at two rates, 390 days are paid at sickness benefit rate which is 80% of salary (capped) by Social Security. A basic rate is paid for the remaining 90 days. Many employers will top up the amounts paid during parental leave. There is an additional 180 days available for twins.
Adopting parents are entitled to the same leave.
Employees should give 2 months’ notice of the intention to take leave.
Bereavement
Employees have the right to leave from work but not for paid leave. However, many employers will grant paid leave of up to 10 days after the death and burial of a relative.
Other
Employment contracts and the CBA will often provide for other types of leave.
Supplementary pensions are the most common benefit given in Sweden with employers typically contributing 5 to 10%. Medical and life insurance are occasionally given as benefits.
We make expansion in Sweden simple
Employing people compliantly across international borders can be challenging but we make it simple, bringing down barriers and making light work of the complexities. We offer the full range of compliant global expansion solutions so that wherever, whenever and however you want to employ people, we can support you.
EOR Services
Employ people compliantly in 180+ countries – without setting up new entities. We’ll shoulder responsibility as Employer of Record (EOR), making sure all your international employment is fully compliant.
We can also take care of your global HR from multi-country payroll to onboarding and offboarding.
Payroll Solutions
Getting global payroll right is one of the hardest challenges for any business expanding into new countries. We can shoulder this burden, freeing up valuable in-house resource to focus on growing your business.
Consider us an extension of your HR team, ready to answer all your questions large and small.
Global Mobility
Mobilise your people across borders with ease. Relocating to work abroad can feel daunting. But with Leap29 at your side, your employees can feel safe and supported.
We’ll guide your employees through the complexities of working in another country, helping them settle in fast.
Entity Services
Follow the opportunities to grow your business – wherever they take you.
We lighten the load of establishing and managing foreign entities and can help you solve all your entity challenges from running compliant, accurate multi-country payroll to local accounting and financial reporting.
PEO Solutions
Employ international talent wherever and whenever you need it – and enjoy the peace of mind of knowing you’re fully compliant. Our Professional Employer Organisation (PEO) services allow you to focus on growing your business while we handle compliance, multi-country payroll and your global HR.
Support & Advisory
The help you need to make your global growth effortless – trusted guidance and advice on your expansion challenges large and small.
HR Support
When you’re employing people in lots of different countries, answering just a simple query can take a disproportionate amount of time for your in-house HR team. Our HR Support service reduces this burden, saving you time and money and giving you the confidence of knowing your employees are well looked after, whatever their location.
Contractor Payroll
Enjoy compliant contractor payroll that meets all local requirements for tax, social security and employment legislation. We understand the importance of compliant contractor payroll to the success of your business and will pay your contractors on time, every time.
Start hiring today – and onboard within hours.
Pricing
Budget confidently with transparent, competitive fees and no hidden costs.
Want us to shoulder employer liability and take care of your global HR through our EOR solution? No problem. Just want global payroll? You can have that too. Pick the solutions that your individual business needs.
We’re a people business with employee management software, not a software business that works in employee management!
At Leap29 we offer access to the latest technology and software to easily and effectively manage your employees from anywhere in the world.
Our bespoke online portal LeapForward helps ensure a smooth onboarding process, manages monthly payroll and easily facilitates additional bonuses and expenses. By streamlining your processes through our online portal, it will help you attract and retain great talent and take the pain out of payroll management.
Integrated fully with our global EOR services, LeapForward comes at no additional cost to you but is guaranteed to save you time and money whilst simplifying your employee management procedures.
Sweden
Expansion Resources
Want to find out more about Sweden? Check out our Sweden employment resources below.
Our Recruitment Services
A global recruitment partner you can trust
We solve global recruitment challenges for businesses large and small. Whether you’re building out a new team, expanding into another country or looking for a confidential executive level hire, you can trust us to deliver.
Need 80 contractors in Brazil? Looking for just one very special permanent hire? Want us to take care of your global HR? It’s all in a day’s work at Leap29.
Whatever and wherever your mandate, we can help.
Permanent Recruitment
Connect with great permanent talent to drive your business forward. We help you find both key strategic hires to lead organisational growth and project specialists to deliver on deadlines and budgets.
Workforce Management
Reduce the complexity of managing workers in different countries and save yourself time, energy and money.
Local expertise, global reach
Employ people compliantly in 180+ countries – with or without your own foreign entities. We can help you set up and manage foreign entities – or act as an Employer of Record. We can also help with multi-country payroll and all your HR management. Wherever, whenever and however you want to employ people, we can help.
180+
India
France
Belgium
Germany
USA
Italy
Turkey
Brazil
Spain
Romania
Talk to an expert today
Whatever stage you’re at in your global expansion journey, we can help.
Contact us today to see how Leap29 can be the trusted partner that supports your global expansion.