Payroll and Benefits Guide Sweden
Last updated: May 16, 2023
Employer Payroll Contributions
|31.42%||Total Employment Cost|
Labor Market Fee
General Payroll Tax (10.21% total contribution for employees born between 1938-1955 and 2003–2005)
Employee Payroll Contributions
|7.00% – 8.03%||Total Employee Cost|
Church Tax (the national average for the church tax fee is 1.03% of taxable income. The member of the Church of Sweden on November 1st will pay church fees throughout the following year)
Burial fee (paid by people registered in Sweden on November 1st, the year before the income year)
Employee Income Tax
Please refer to government income tax tables for full range of taxes (in Swedish).
There are six tax tables based on:
• Where the employee lives in Sweden
• Column 1 refers to salaries, fees, and similar remuneration, used foremployees under age 65 (1st of January)
• Column 2 refers to pensions and other benefits and are used for those over age 65
• Column 3 refers to salaries, fees, and similar remuneration, used for employees over age 65 (1st of January)
• Column 4-6 refers to sick pay, unemployment pay, pensions, or other benefits
• For monthly income over SEK 80 000 tables show % rates for tax deductions
State Employee Income Tax
Up to 540,700 SEK (up to the age of 65 at the beginning of the year, a total annual income of 554,900 SEK (540,700 + 14,200) before the state income tax begins to be levied)
540,700 SEK and above (above the age of 65 at the start of the year, a total annual income of 618,700 SEK (540,700 + 78,000) before the state income tax is levied
In Sweden, there is no official national minimum. Minimum wages are stipulated within the collective bargaining agreements through the trade unions of the employee.
MINIMUM WAGE (PER MONTH)
In Sweden, the payroll frequency is typically monthly. Employers usually make the payment of salaries on the 25th of each month.
In Sweden, 13th-month payments are not legally mandatory. Employers can pay bonuses at their discretion.
The standard working week consists of 40 hours over the course of five days, following the commencement of five consecutive working hours, an employee must be allowed a break.
All work more than the standard working hours per week is to be paid as overtime and is regulated by employment contract/collective agreements. When an employee is requested to work overtime or work on holidays, there are maximums in relation to the number of hours allowed. These maximums are 48 hours per week, an average of 50 hours per month, or 200 hours annually over four months.
All overtime hours exceeding 40 hours a week are paid at an overtime compensation rate; this rate is stipulated in the employment contract/collective agreements.
For overtime worked on weekdays before 8.00 pm, hours are compensated at the monthly salary divided by 94 for each additional hour of work. For hours worked after 8.00 pm or on weekends, hours are compensated at the monthly salary rate divided by 72 for each additional hour worked.
Employees who hold a managerial or comparable role or organize their working schedule are not entitled to overtime compensation. Including overtime pay in the gross salary is sometimes an option for non-managerial roles as well.
Paid Time Off
Employees are entitled to 25 days of paid vacation each year after one year of work at the company at a 2.08 monthly accrual. It is common to give 30 days per year.
Once accrued, vacation days can be held for up to five years. Vacation pay accounts for 12% of an employee’s gross annual salary.
Public holidays that fall on the weekend are usually lost.
In Sweden, paid sick leave is compensated to the employee for the 2nd-14th day of sick leave by the employer, and for sickness of more than 14 days, benefits are paid by social security. The first day of sickness is unpaid.
Generally, sick leave is compensated at 75.00% – 80.00% of the employee’s regular pay rate, depending on the length of the sickness.
Mothers receive 14 weeks of maternity leave, which is to be taken seven weeks before the birth of the child and seven after the birth.
PAID MATERNITY LEAVE (DAYS)
In Sweden, fathers are entitled to 10 days of paid paternity leave.
Parents are entitled to 480 days of parental leave, which can be split between the parents or taken by a single parent. Employees can also use their parental leave entitlement to reduce their working hours until the child is eight years of age.
In Sweden, there may be several types of other leave entitlements available as detailed in the respective collective bargaining agreement/employment contract.
This leave is to be approved by the employer and is applicable to members of the employee’s family and close relatives.
The termination process varies according to how the employment agreement and collective agreement are in place and is based on the type of contract and reason for termination. However, no termination due to economic reasons or long-term disability can occur without the Employee Insurance Agency (UWV).
The Employment Service must be notified of an employee’s termination and if their company has more than five employees, companies may have to negotiate with trade unions. Following any negotiations, the employer must provide an employee with a termination notice in writing and in person. If this is not possible, then a registered letter is to be sent to the employee’s home address.
The notice periods in Sweden are outlined in the employment contract and collective bargaining agreement of the Employment Protection Act.
For employers with a collective agreement, notice periods are stipulated in the employment contract following an agreement between the employer and employee. The notice period is commonly one month.
For employees without a collective agreement, the notice period is dependent on the employee’s serenity as follows:
- Less than two years – 1 month of notice
- Two years but fewer than four years -2 months of notice
- Four years but fewer than six years – 3 months of notice
- Six years but fewer than eight years – 4 months of notice
- Eight years but fewer than ten years – 5 months of notice
- Ten years or more – 6 months of notice
Suppose an employer has dismissed an employee without notice due to gross misconduct. In that case, employees with a collective agreement should serve the notice period stipulated within their employment contract, commonly one month. In contrast, an employee without a collective agreement should serve a one-month notice period in accordance with the Employment Protection Act.
Severance is not mandatory in Sweden. However, it might be required if stated in a collective agreement or employment agreement.
In Sweden, probation periods are outlined in the employee’s employment contract/collective agreement. The probationary period can be a maximum of six months. The period can be shorter and the employee can become permanently employed before the probationary period is complete. If a probationary period is not terminated after six months, the employment will automatically become permanent.
The probationary period must be stated in the employment contract. The employee needs to be informed two weeks at the latest before the period ends if he or she will be permanently employed. Salaries and other benefits are the same during a probationary period.
- Private pension (5-10% employer contribution)
- Private health insurance allowance
- Life insurance
- Car allowances
- Home office allowances
- Gym allowance
- Meal allowance
Generally, citizens from countries outside the EU must apply for a work permit to work in Sweden. There are a few exceptions to the rule. Citizens of Australia, Canada, Hong Kong, Japan, New Zealand, and South Korea aged 18–30 can also apply for a working holiday visa for up to one year.
For employment that lasts less than three months, citizens of certain countries must have a work permit and a visa.
To qualify for a work permit, you must have received an official offer of employment from a Swedish employer. The job must also:
- Have been advertised in the EU/EEA for at least ten days
- Offer terms of employment that match those set by Swedish collective agreements or those that are customary within the occupation or industry
- Pay a minimum monthly salary of SEK 13,000 before taxes
You must also hold a valid passport in your home country.
The standard rate of VAT in Sweden is 25.00%.
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Public Holidays Calendar
|Sunday||Jan-1||New Year's Day|
|Tuesday||Dec-26||St Stephen’s Day|