Looking for a PEO and EOR service provider in Sweden? You've knocked on the right door! Our European PEO and EOR solutions help companies hire employees in Sweden without establishing a legal entity. Hiring and employment in Sweden can be complex as a foreign employer. We're here to guide you. EuroDev is the leading provider of EOR & PEO solutions in Europe. We partner with North American businesses that want to expand their business into Europe, including Sweden. What should be taken into account when employing or hiring in Sweden?

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How it works - PEO in Sweden & EOR in Sweden

An Employer of Record (EOR) or Professional Employer Organization (PEO) is a company or organization that is legally responsible for paying employees, including dealing with employee taxes, benefits & insurances. As the EOR/PEO of your European or Swedish employees, we provide you with tailored payroll, HR, and compliance services. Through this construction, we decrease all the complications such as compliance issues, setting up a foreign establishment, and setting up employment contracts in a different language. 

Benefits of a PEO in Sweden & EOR in Sweden

  • Expand without an entity 
  • Flexible and cost-effective solution to outsource payroll and HR functions for international expansion 
  • In compliance with foreign local laws & regulations 
  • Minimizes employment liabilities and risks 
  • Reduced risk, as the risks of being an employer fall almost completely on the employer of record 
  • Saves you time to focus on your core business 
  • You manage your employees 
  • EOR and /or PEO takes care of registration and contact with local authorities

Employment Contracts Sweden

The main rule is that an employment contract is indefinite. This means that as long as the parties have not entered into a fixed-term employment contract, the employment relationship will continue until further notice. The Employer and the employee may agree that the first six months of an employment contract for an indefinite period is a probationary period. During this trial period, either party may terminate the employment at any time without giving reasons and without notice. If neither party terminates the employment during or at the end of the probationary period, the employer shall continue for an indefinite period.

PEO and EOR service providers in Sweden will support you with the set-up of a local employment contract.

Employment Termination Sweden - Notice Period Sweden

Aside from job termination by default – that is, in the event of a fixed-term contract – resignation and mutual consent, Swedish labor law lists the following grounds for termination (not complete list).

  • business-related dismissal such as redundancy (if the need for a specific job ceases due to some technical, economical, or organizational reasons such as collective dismissal);
  • dismissal on personal grounds (the employee is not able to perform properly due to some permanent abilities or characteristics);
  • dismissal due to dissatisfaction with probation work (the employee simply did not perform well during the probationary period).

Employers must adhere to the following legal notice periods when dismissing an employee:

  • Less than two years – 1 month of notice  
  • Two years but less than four years -2 months of notice  
  • Four years but less than six years – 3 months of notice  
  • Six years but less than eight years – 4 months of notice  
  • Eight years but less than ten years – 5 months of notice  
  • Ten years or more – 6 months 

In circumstances of gross misbehaviour or a severe breach of the agreed employment contract, an employer may terminate an employee's employment without notice. Employees must notify their employers of their intention to quit at least one month before their scheduled departure date.

Social Security Sweden 

The following tax and social security contribution rates apply to employees and employers in Sweden (as of 2022).

Employer payroll contribution:

Description of Cost Component Percentage 
Health Insurance  3.55%
Parental Insurance  2.60%
Retirement Pension  10.21% 
Survivors Pension  0.60%
Labor Market fee 2.65%
Occupational Injury  0.20%
General Payroll tax  11.62%
Total Employment Cost                       31.42%

 

Employee Payroll Contribution

Description of Cost Component Percentage 
Employee Payroll contribution 7%
Total Employee Cost  7%

Employee Income Tax:

  • Up to 523,200 SEK : 0.00%
  • 523,200 SEK and above: 20%

Average Salary Sweden & Average Employer Costs Sweden

In 2020, the annual salary in Sweden was $42.393. This is lower than the average annual wage in the United States, $65.835,58. As an employer, the actual employer costs are around 31.42% higher than the gross annual salary. Based on a $42.393 annual salary, the employment costs would be $55712.88

To learn more about the average salaries in Europe and the actual employment costs in Europe, we invite you to read this article on the Costs of hiring European employees.

Working Hours Sweden

A regular workweek consists of 40 hours spread out over five days; an employee must be given a break after working for five days in a row. Overtime is compensated for all work done in excess of the usual working hours each week, and it is regulated by employment contracts and collective agreements. Overtime hours in excess of 40 hours per week are paid at an overtime compensation rate, which is spelled out in the employment contract or collective bargaining agreement.

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Paid Vacation Leave Sweden

According to the Swedish Holiday Act, after one year of employment (ie, qualifying year), employees are entitled to 25 days of paid vacation, excluding public holidays. However, 30 days of yearly vacation is standard for white-collar employees and professionals, either by individual contract or collective bargaining agreement. Vacation days can be saved for up to five years once they have been accumulated.
Vacation compensation makes for 12% of an employee's annual gross wage.

To learn more about the average paid vacation days in Europe and how Sweden compares to the rest of Europe, we invite you to read our blog on paid vacation days in Europe.

Public Holidays Sweden

Employees are legally entitled to have these 13 days as holidays in Sweden, including:

  1. New Year’s Day - 1 January
  2. Epiphany - 6 January
  3. Good Friday - 15 April
  4. Easter Sunday - 17 April
  5. Easter Monday - 18 April
  6. May Day - 1 May
  7. Ascension Day - 26 May
  8. Whit Sunday - 5 June
  9. National Day - 6 June
  10. Midsummer Day - 25 June
  11. All Saints Day - 5 November
  12. Christmas Day - 25 December 
  13. 2nd Day of Christmas - 26 December

Add 2022 Sweden Public Holidays to your calendar

Maternity and Paternity Leave Sweden

Sweden has one of the most generous parental leave programs in the world. Parents in Sweden are entitled to 240 days each when the child is born or adopted. In case of multiple births, an additional 180 days are allowed for each additional child in the family. 

It is important to mention that both parents may use the parental leave at the same time during first three months and completely focus on new born. During that period the father is entitled to be home additional 10 days. 

Learn more about PEO and EOR in Europe:

Get in contact or request a quote

 

Learn more about PEO and EOR in other European countries:


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PEO and EOR in
the UK

Currency: Pound Sterling (GDP)
Payroll Frequency: Monthly
Employer Taxes: 13.80%

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PEO and EOR in
Germany
 

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 19% - 20%

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PEO and EOR in
Italy
 

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 29% - 32%

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PEO and EOR in
France 

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 40% - 50%

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PEO and EOR in
Netherlands

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 23.59%

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PEO and EOR in
Spain

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 29.90%

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PEO and EOR in
Poland

Currency: Polish Złoty (PLN)
Payroll Frequency: Monthly
Employer Taxes: 19.48% - 22.14%

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PEO and EOR in
Denmark

Currency: Danish Kronne (DKK)
Payroll Frequency: Monthly
Employer Taxes: 14,892 DKK per year

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PEO and EOR in
Ireland

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 15.05%

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PEO and EOR in
Portugal

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 26.50%

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PEO and EOR in
Belgium

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 25% - 27%

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PEO and EOR in
Slovenia

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 16.10%

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PEO and EOR in
Greece

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 22.54%

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PEO and EOR in
Austria

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 21.23%

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PEO and EOR in
Finland

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 19.85% - 21.25%

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PEO and EOR in
Croatia

Currency: Croatian Kuna (HRK)
Payroll Frequency: Monthly
Employer Taxes: 16.50%

Interested in European expansion? Exciting! I am looking forward to discussing your European HR needs.

Monique Ramondt Sanders

Executive Vice President | HR Outsourcing