SEK)Before hiring employees in Sweden, there are some key things you’ll need to know. Firstly, Swedish employers offer very generous parental leave, with both mothers and fathers eligible to take 240 days of paid leave.
In Sweden, employees accrue vacation pay daily and it equates to 12% on top of their gross salary. It’s paid out when they go on vacation. In Sweden, employees are entitled to 25 days of paid holiday each year.
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Get an overview of what you need to know when hiring in Sweden below.
Employees are entitled to 25 days of paid holiday per year.
For a period of four weeks, the maximum overtime in Sweden is 48 hours, or for a calendar month, a maximum of 50 hours overtime.
Employment agreements are generally agreed beforehand with unions, and so amendments to contracts are not necessarily trivial to make.
Sweden generally has some of the highest social security contributions, but also best social support in the world. Pensions are no exception. In Sweden, there are three types of pensions:
The statutory notice periods to be observed by the employer vary in accordance with the employee's length of service and range from one to six months as follows:
In Sweden, non-compete agreements cannot exceed a maximum period of 18 months. Employers must also compensate the employee for the duration of the restriction at a rate of no more than 60% of the employee's normal wages. The compensation is dependent on the loss of income caused by the non-compete restriction, and it can be reduced to reflect any wages earned in new employment during the period of the restriction.
Employees are entitled to 25 days of paid holiday per year. Besides paid holidays, another six half-days of leave should be allowed for personal needs.
Vacation pay in Sweden is calculated as an additional supplement of 0.43% of an employee’s monthly pay per day when they take vacation. Swedish law also mandates that 12% vacation pay is added on any bonuses, commissions or variable pay.
During summer months (June, July and August), employers are obligated to provide each worker with four consecutive vacation weeks.
In Sweden, it’s up to the employer to decide whether or not to provide sick pay. If they do, for the first 14 days of sick leave, an employer pays sick pay instead of an employee’s regular salary. After that, employees can apply for sickness benefits from Försäkringskassan. If an employer does not pay sick pay, employees can apply for sickness benefits from Försäkringskassan for the full sick period.
Employees in Sweden may be eligible for maternity, paternity, adoption, or carer’s leave.
Mothers receive 240 days of paid leave with the right to start 60 days before the expected birth. Fathers are also entitled to 240 days of paid leave.
Employers in Sweden are taxed 31.42% on top of each employee’s salary.
Employees in Sweden who make a salary of less than 509,300 SEK do not have to pay income tax. Employees who earn over 509,300 SEK are taxed 20%. Employees also pay a municipal tax of 32%. Employees who earn an income of 538,700 SEK per year also pay for pension insurance of 7%, but this is normally offset against other taxes and so effectively zero for the employee.
In Sweden, there are no statutory rights to severance payments. The employee is entitled to normal wages during the notice period.
Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast.
We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities.
With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.