Sweden

Employer of Record in Sweden

Skuad’s Sweden Employer of Record solution helps with organizations’ expansion into Sweden. It also provides employment services and ensures compliance with labor laws in the country as well as local EOR and staffing solutions. Skuad's integrated and global HR platform offers an all-encompassing solution to the employment needs of your business and enables you to onboard a team of qualified staff while managing their payrolls competently.

To learn more about Skuad, Book a demo today.

Sweden at a Glance

Located in Northern Europe, this Nordic country is richly deposited with natural resources and also boasts of the third-highest employment rate.

Population: 10.3 million

Currency: Krona SEK

Capital City: Stockholm

Languages Spoken: Swedish

GDP: USD 530.83 billion

Employment Rate: 76.2%

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Employment in Sweden

The employment in Sweden is to a large degree self-administered by employee associations and trade alliances. The Swedish employment legal framework is focused on public dictates that supervise maximum perspectives of the employer-employee relationship. Obligatory rules and ordinances in collective bargaining contracts present a complete structure for the sessions and contingencies of employment. Conflicts are ultimately resolved in the Swedish Labor Court, which is the ultimate authority in work-related controversies. Nevertheless, most of the arguments are resolved by the participants on the employment exchange by discussions and compromises.

Skuad’s Employer of Record solution highly adheres to the employment laws laid by the government. The employment laws, according to the Swedish legislation, resemble the laws of other Nordic nations. The legislation of the EU has also been implemented into the official legal framework of Sweden quite swiftly. The Swedish Constitution, its provisions, statutes, case laws, individual employment contracts, collective bargaining agreements, and employer decision-making present the primary sources of employment law in Sweden. The Employee of Record Sweden states that the laws prevent discrimination of the blue-collar and white-collar employees and preserve their individual rights. Skuad’s EOR Sweden solutions can help you navigate through the idiosyncrasies of Swedish employment laws. Book a demo today.

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In order to hire employees for an organization in Sweden, a firm needs to be conscious of all perspectives of Employer of Record Sweden and its consequent employment legislations. However, to ease the process, it is recommended that companies team up with a local employment provider, who is completely informed about the employment laws of Sweden for both regional as well as international employees. A comprehensive list of the major employment laws in Sweden and its explanations are provided below:

Work Hours in Sweden

Forty hours across five days 

Overtime Eligibility

Overtime is solely allotted in case of an extremely significant business requirement and is restricted to an average of 48 hours in four weeks, about 50 hours in a calendar month, and approximately 200 hours annually.

Additional overtime is allotted in an extremely restricted amount of situations. Overtime payment is commonly installed by a collective bargaining contract but is conventionally funded at 150% to 200% of the employee's official wage rate or salary. In a few instances, an employee might further obtain funded time off as a reward for working overtime

Paid Annual Leaves

Employees can obtain 25 days of paid yearly allowance. The holidays are collected throughout a qualifying year, that is, a 12-month duration of consecutive work, and can later be exercised throughout the subsequent vacation year, which commences from April 1 and ends on March 31. Collective bargaining contracts frequently allow extra holiday periods for the employees in Sweden. Employees are qualified to take four continuous weeks of holiday between June and August. An employee with more than 20 vacation leaves might carry over these leaves at the rate of five holidays per annum for the next five years.

Paid Public Holidays

The following public holidays in Sweden are marked as paid holidays for employees.

• New Year’s Day
• Epiphany
• Good Friday
• Easter Monday
• Labor Day/May Day
• Ascension Day
• National Day of Sweden
• Midsummer’s Eve
• Midsummer
• Christmas Day
• Boxing Day

Sick Leaves

Employees are authorized to claim a total of 14 funded sick days. However, the initial day of sick leave is non-funded or unpaid. For the subsequent 13 days during which the employee is unwell, the owner or employer funds around 80% of the employee’s authorized wages, comprising the maximum limit. Following that, compensations are funded by social protection. Payments are usually 75% to 80% of the approved rates of salary or wage that the employee receives, and it also relies on the total duration of leave granted to the employee.

Maternity/Paternity Leave

The employment regulations of Sweden permit female employees to avail maternity leave of up to 14 weeks. Seven weeks of maternity allowance is necessitated before the birth of the child, and the remaining unused vacation can be utilized following the birth. 

Paternity leave is entitled to the other parent (or the father), which is about 10 days.

Employees also obtain 480 days of familial holidays. These leaves can be exercised comprehensively by a single parent as well. In most situations, it is partaken by both the parents. Employees are further authorized to utilize their familial vacation to decrease their working duration in the workplace till the child is eight years of age.

Compensation

Compensations, bonuses, and allowances are awarded to the employees by their respective employers, supervisors, or higher officials. This has been established by the employment laws of Sweden.

Health Insurance Benefits

Sweden has access to reliable universal health and wellness services, with the healthcare practice directed principally at the provincial and national levels. Private health and wellness coverage or insurance is open, but only a small portion of Swedish citizens have access to it.

Employment Termination/Severance

An owner or employer must possess an accurately legitimate purpose to terminate an employee, which can include business purposes, working performance, or productivity, and misconduct related to the workplace. In most circumstances, employers terminate employees with notification depending on the employee’s duration of service in the respective organization. The notice duration can range from a period of 14 days to six months.

There is no sanctioned severance payment or compensation in the Swedish employment regulations, but they might be expected under personal, specific, and collective contracts.

Contractors vs Full-time Employees

An employee in Sweden is categorized as an independent contractor or a full-time employee based on the status of the employee. Employers are responsible for establishing the status of the employee as per taxation laws and employment laws. 

The key difference between a contractor and a full-time employee is that full-time employees are entitled to statutory sick pay, statutory maternity and paternity leaves, minimum notice periods, legal protection from unfair dismissal, statutory redundancy pay, time-off for emergencies, and flexible work requests. Contractors in Sweden, on the other hand, work on a project-to-project basis, have their entity, pay their taxes, works for multiple clients simultaneously, and are not a part of the payroll.‍

Talk to us for assistance with your hiring needs in Sweden.

Hiring in Sweden 

Hiring in Sweden is similar to hiring in other countries. Hiring teams use several online portals such as CareerBuilder, Blocket, Jobbland, Nyteknik, and Netjobs along with websites such as LinkedIn to carry out their recruitment process seamlessly. 

There is no doubt about the various advantages of hiring through apps and websites. Without having to step out to conduct the hiring process, you get access to several candidates based in different parts of the country. However, it’s a hectic and time-consuming process. Moreover, the websites and portals mentioned above cannot claim access to the vast majority of employable candidates in the market.

When expanding your business to a new location, you might want to hire a large number of employees within a limited time. Skuad's unified employment platform enables seamless hiring and onboarding of top talents in Sweden while ensuring compliance with employment laws so that you can focus on other aspects of your business. 

Learn more about Skuad’s Sweden EOR solutions

Probation and Termination

The Swedish Employment Protection Act offers a maximum of 6 months as the probationary period for full-time employees. Until the employer or employee dismisses or delivers notice to discontinue probationary work early, the employment, after the mentioned period, will be permanent. 

Termination of Service

If the employee or the employer decides to dismiss the employment contract between both parties, he must provide notice to the other party in writing. The notice period is defined as per the obligations previously mentioned in the employment contract. However, the following general rules apply:

• Employment of fewer than 2 years requires a 1 month notice period.
• Employment of less than 2-4 years requires 2 months of the notice period.
• 1 extra month is added for every 2-year duration for 6 months.
• For resignation, the employees have a minimum of 1 month notice as per the contract. The Employment Protection Act declares the employee is not committed to providing reasons. 

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EOR Solution

Employer of Record Sweden (Sweden EOR) solution presents it simpler and quicker for companies to expand into Sweden. Preferring the EOR program guarantees the stable and acquiescent operation of payment and additional employment liabilities, devoid of any entity demonstration. Skuad can assist you to maintain monthly payments, employment agreements, business permits and taxation procedures in Sweden for your employees via its unified employment platform.

General Employer of Record Service Terms

Taxes that apply to invoices

• 25% is the standard VAT rate in Sweden
• 12% is for hotel and foodstuff
• 0% is for international transport

Minimum duration of service

Three months

Currency accepted

Krona SEK

Required Details and Documents

• An authentic passport
• Employment proposal/offer
• Declaration from trade union
• Individual or corporate identification number of employees is required, which can be either a Swedish Tax Identification Number (TIN) or co-ordination number provided by the Tax Agency

Connect with Skuad experts to know more.

Types of Visas in Sweden

As an association, when you want to expand in Sweden, you must select an appropriate path. You can either create your in-house team or depend on the services of Employer of Record Sweden to supervise payrolls and employment contracts. Learn more about how Skuad’s EOR solutions can help.

Business Visa

The eligibility to obtain a visa for non-EU citizens who are willing to visit Sweden for a business conference or trip includes the following.

• An authentic passport that has been issued in the last decade and with a minimum of three months of validity
• An official proposal or offer to attend the conference by the host company
• Adequate funds to travel and to afford the cost of living in Sweden, which is approximately SEK 450 a day (a record of the bank statement can verify this)
• Medical travel insurance that covers at least 30,000 EUR
  

A Swedish embassy accepts the VISA applications and requires the following documentation.

• Details of the motive behind visiting Sweden and length of stay
• Family details
• A complete application form
• Two passport photographs
• Invitation letter from the hosting company revealing personal information, the purpose for visit, and source of monetary assistance

Intra-company transfer

Obtaining a visa for this section is greatly common with the procedures of a work permit.

• The Swedish Migration Board, the consulate general, or the closest embassy must receive a filled application.
• After approval, the visa application must be sent to the embassy of the employee’s or individual's home country. This will make the visa supported in the passport.
• A permit for residence is required if the lengths of stay surpass 90 days.

To know more about the visa process in Sweden, speak to our experts at Skuad.

Work Permits

Can Skuad sponsor a work permit in Sweden
Yes

Processing Time
Three months

Work Permit Process

• Step 1: Skuad’s local partner files a visa application to the Swedish Migration Agency.
• Step 2: The Migration Agency will deliver the result of the application within two to five months, given that the employee provides valid information.
• Step 3: On successful application, the Swedish Migration Office will issue a residence permit to the employee.
• Step 4: The Swedish Tax Agency will be notified in case of a non-EU employee.
• Step 4: The employee can obtain the work permit.

Cost of Permit
2000 SEK or 200 dollars

Work Permit Validity
Two years

Where is the Application Processed?
‍In the Swedish Migration Agency or Swedish embassy

Can Spouses work on dependent visas?
If a person is qualified for a work permit, spouses or registered associates, children below 21, and children above 21 who are economically subservient are qualified to stay in Sweden and will need to appeal for residence permits as well.

Skuad teams up with its local partner in Sweden to assist and sponsor foreign employees to gain work permits. As an Employer of Record in Sweden, Skuad shoulders all the responsibilities related to employment. Talk to us.

Payroll and Taxes in Sweden

Employer Taxation

Income Tax rate

• Up to 523,200 - 0%
• From and above 523,300 20%

A 20% flat rate are applied to non-resident employees in Sweden.

Payroll Tax

For employers - 31.42%

For self-employed individuals - 28.97%

Sales Tax

• 25% is the standard VAT rate in Sweden
• 12% for hotel and foodstuff

Withholding Tax

A 30% withholding tax of dividend payments applies to non-residents.

Time to prepare and pay taxes

122 hours

Time Required to Start a Business

Seven days

Employee Taxation

Payroll tax 

Payroll tax is taxed at a rate of 31.42% for employers or 28.97% for the self-employed, although this may differ for individuals under 26 or above 66 to encourage greater labor force participation.

Sales tax 

The sales tax is 25%.

Withholding Tax

Dividends paid to Swedish individuals or corporations are generally not subject to any withholding; however, non-residents are subject to a 30% withholding tax of dividend payments.

Incorporation

The steps to set up a subsidiary or legal entity in Sweden are as follows:

• Register reports of organizations
• Designate a business title
• File for taxes
• Elect a committee of executives and a leading director
• Formulate legal policies and strategies for the committee board, as well as the director
• Select a member bequeathed with the power to sign
  

Setting up a subsidiary in  Sweden is a hectic and time-consuming process. Skuad's EOR solution is a good way to expand your business in Sweden without setting up a separate entity. Our solutions help you to stay focused on your business and leave all business compliances, payroll processing, and complete management work to us. Connect with Skuad to know more!

PEO

A PEO is a Professional Employer Organizer, essentially an association that has accumulated services that are delivered for a company. Services involve profits, payroll, employee allowance, hiring, and contingency administration.

Employer of Record is however different from a PEO as it takes over a certain portion of the HR duties regarding employees and payroll. 

Moreover, you continue the employment agreements when operating with a PEO, on the contrary, an EOR retains the employment record, involving you with an assistance contract.

Companies that possess lawful entities in their selected nations may require facilities that accommodate all their employee’s demands. A PEO is required in this situation.

Whereas working with an Employer of Record will be the most beneficial for businesses that are not expecting significant augmentations in other nations. Skuad, with its EOR solution, adequately comes into assistance here. 

Conclusion

Looking for an efficient EOR solution can be tricky and vital for your company. Skuad with a unified employment platform can direct you to the right talent that will be appropriate to board on your team. Book a demo to learn more about Skuad’s EOR solutions in Sweden.

FAQs

1) What is the employer of record services in Sweden?

Employer of Record (EOR) services in Sweden hire employees legally for clients without setting up a legal entity. An EOR, like Skuad, handles payroll, taxes, benefits, and compliance with Swedish labor laws.

2) What is the EU employer of record?

An EU Employer of Record (EOR) manages employment responsibilities for companies looking to hire workers across European Union member states. An EOR, like Skuad, ensures compliance with local labor laws, manages payroll, taxes, and benefits, and owns the legal obligations of the workforce.

3) How to use an employer of record in Sweden?

To find an Employer of Record (EOR) in Sweden, look for reputable EOR service providers with experience in the Swedish market, like Skuad. Then you may contact the team via their website to learn more about their service and plans.

4) How much does it cost to hire in Sweden?

The cost of hiring in Sweden includes several components, such as gross salary, social security contributions, and benefits. Employers are required to pay approximately 31.42% of an employee's gross salary in social security contributions. Try Skuad’s cost calculator for more insights.