Employing foreign nationals in Sweden
When you employ a foreign national to work in Sweden, different tax rules apply depending on how long the employee will stay in Sweden. As a general rule, Swedish social insurance applies.
Perhaps you have just hired someone with special knowledge of a particular culture or language for your business. The differences between the home country and the country of work can be significant for the newly arrived employee. The new employee may therefore need help with some practical details at the beginning, such as contact with the Swedish Social Insurance Agency, bank, telephone company, insurance company and so on.
To avoid culture clashes in the workplace, or at least reduce the risk of them, you should appoint one or more supervisors to guide the newcomer. Paying attention to issues such as work culture, social interaction and procedures can make the introduction process easier.
Involve your other employees in the introduction of the new employee. Could they perhaps be responsible for different parts of the introduction process?
Introductory job – support for those hiring a new arrival to Sweden
You can receive financial subsidy from the Swedish Public Employment Service if you employ a person who is new to Sweden and is aged 20 or over. This support is ideal when you need to recruit for a profession with a shortage of trained labour. The person you choose to employ can combine their time in your company with training/education that meets your needs as an employer.
Introductory job at the Swedish Public Employment Service (in Swedish)
Tax liability
If, as a Swedish employer, you employ a foreign person to work here in Sweden, the question of taxation is determined by how long the employee will be staying in Sweden. However, the income may be exempt from taxation under tax treaty provisions.
Check what applies to you and your employees in the Swedish Tax Agency's overview of international employment.
If the employee is resident in a non-EU country, you must also check that the person has the right to work and reside in Sweden. You must also notify the Swedish Tax Agency using the form Notification – Employment of a foreigner (SKV 1160).
What you as an employer must check with the Swedish Migration Agency (in Swedish)
The Swedish Tax Agency's overview of international employment (in Swedish)
Swedish Tax Agency form Notification – Employment of a foreigner (SKV 1160) (in Swedish)
Shorter than six months
An employee who stays in Sweden for a maximum of six months can choose between two ways of being taxed, either with special income tax for non-residents (SINK) or in the same way as a person resident in Sweden, i.e. as specified in the Income Tax Act.
SINK is a 25 percent tax that you, as the employer, deduct from the employee's gross salary. The employee then does not have to file an income tax return, but is also not allowed to make any deductions from the income.
You or the employee must submit an application for SINK to the Swedish Tax Agency. If the employee wishes to be taxed under the Income Tax Act, you should clearly state this under “Other information and requests” on the application. When they apply to be taxed under SINK, the employee will be issued a coordination number.
How to apply for SINK at the Swedish Tax Agency (in Swedish)
Longer than six months
Normal taxation rules apply when you employ someone who lives abroad and is in Sweden for six months or more. This means that the employee is subject to the same tax rules as people resident in Sweden.
The employee applies for A-tax and must submit an income tax return. Even if the employee is not registered in the Swedish population register, they must register with the Swedish Tax Agency to obtain a coordination number.
About coordination numbers at the Swedish Tax Agency
Staying in Sweden for one year or more
An employee who will be staying in Sweden for more than one year must normally be registered in the Swedish population register. Citizens of another EU country who come here to work or study have an automatic right of residence in Sweden. Other non-Nordic nationals need a residence permit from the Swedish Migration Agency.
The employee must personally visit the Swedish Tax Agency to apply to be registered in the Swedish population register, and apply for A-tax at the same time. Normal taxation rules apply and the employee must submit an income tax return.
Moving to Sweden at the Swedish Tax Agency
PAYE tax return
When you are registered as an employee, you will automatically receive the PAYE tax returns and the information you need to report remuneration and pay employer's contributions and deducted tax. As an employer, you are responsible for reporting payments and tax deductions per person in the PAYE tax return each month.
What does it cost to have employees?
Employer’s contributions and tax deductions at the Swedish Tax Agency (in Swedish)
About the PAYE tax return at the individual level at the Swedish Tax Agency (in Swedish)
Social insurance
The employee can only be covered by one country's social insurance system, normally the insurance of the country of employment. You therefore will normally have to pay Swedish employer's contributions on remuneration to employees who are resident abroad but work in Sweden. This also applies when they are taxed under SINK (with a few exceptions).
However, if the employee works in several countries for one or more employers, there may be exceptions to the main rule. In such cases, ask the employee to produce a certificate stating which country's social insurance they belong to. If you are not sure in which country you should pay social security contributions, contact the Swedish Social Insurance Agency.
If an employee presents a certificate stating that they are covered by another country's social insurance (A1 certificate/E101 certificate), this means that you, as the employer, must pay social security contributions in the country in which the employee is covered by social insurance. It is possible to contract for the employee to pay their own social security contributions, but this does not normally relieve you of your obligations if the employee fails to comply with this contract stipulation.
Contact the Swedish Social Insurance Agency (in Swedish)
Use posted workers
If your company plans to use workers employed in other countries to carry out work in Sweden, it may be a case of what is referred to as posting. In such case, there are a few things you need to do to avoid the risk of having to pay a sanction charge.
What is posting?
Posting to Sweden means:
- an employer in another country sends a worker to perform a service in Sweden for a limited period of time
- there is a recipient in Sweden of the service that the worker is to perform.
A service is any form of work that the worker is to perform for remuneration. The person purchasing the service and thus using the posted worker is called the recipient of the service.
You are also a service recipient if you temporarily contract workers from a company in another country to perform the service. The workers may be contracted to you directly from an employer abroad or indirectly via another company abroad.
More about posting at the Swedish Work Environment Authority
What do I have to do if I use posted workers?
The employer abroad who posts workers to you must notify the Swedish Work Environment Authority of the posting. The employer must also provide you with documentation stating that they have reported the posting no later than the day the employee starts work in Sweden.
If you have not received any documentation, you must notify the Swedish Work Environment Authority no later than three days after the work in Sweden has started. If you fail to do so, you may have to pay a sanction charge.
Why should I do this?
The Swedish Work Environment Authority needs to be able to check that employers who post workers to Sweden have reported the posting. The aim is for the Authority and the labour market partners to ensure that posted workers in Sweden receive the working and employment conditions to which they are entitled under Swedish law and collective agreements.