Employing staff in Sweden or bringing staff here from abroad

Most companies with operations that employ people in Sweden are obliged to register as employers. They also need to declare and pay employer contributions, and deduct tax from the salaries and benefits paid to their employees. There are, however, exceptions to these rules for posted staff.  

Guide for foreign companies with operations in Sweden at the Swedish Tax Agency

Guide for foreign sole traders with business in Sweden at the Swedish Tax Agency

Businesses and employers at the Swedish Tax Agency

New tax regulations from 2021 regarding work in Sweden

Posting of employees

In certain cases, companies that bring employees to Sweden do not need to pay employer’s social security contributions in Sweden. This is because the employees are usually considered to be posted, and will belong to the social security system in their home country. The rules vary depending on the country from which the employees are posted and how long they will stay in Sweden.

For a company to be exempt from employer’s social security contributions in Sweden, a certificate is usually required, confirming that the employees belong to another country’s social security system. For employees in the EU/EEA and Switzerland, the certificate is called A1 or E101. For employees from a country with which Sweden has a social security convention, it is called a convention certificate. The employer must inform the social security agency in the country whose social security system the employees belong to.

Select the form of employment

There are two forms of employment – indefinite employment and temporary employment. Indefinite employment is the same as permanent employment. The main principle according to the Swedish Employment Protection Act is that an employment contract is in effect until further notice. In practice this means that employment is always indefinite unless otherwise agreed.

If the employment is to be temporary, this must be stated in a written agreement in order to apply. There are also other employment alternatives – you may engage temporary workers from a staffing agency, for example. Contact the Swedish Public Employment Service (Arbetsförmedlingen) or recruitment companies.

Write an employment contract

An employment contract may be oral but the employer must always provide written information about the terms of employment, according to the Swedish Employment Protection Act. It is always appropriate to establish a written employment contract as soon as a person is hired, and regulate all that concerns of the employment within that contract. This complies with the requirement for written information.

The Swedish Employment Act requires you to provide written information containing the following particulars when you employ someone for more than three weeks:

• personal data, the workplace and the commencement date of the employment
• description of the employee's duties, occupational designation or title
• form of employment and period of notice
• pay, employee benefits and the intervals at which the pay will be paid
• length of the paid annual leave and length of the normal working day or week
• applicable collective bargaining agreement, where relevant

It may also be worth including information about any insurance you have taken out for the employee. All this information should be written down and signed by you and your employee in an employment contract.

Swedish Contracts Act

Unreasonable terms in an employment contract may be modified or declared invalid under the provisions of the Swedish Contracts Act.

Collective and tie-in agreements

If you are a member of a trade association, you may be bound by a collective agreement. A collective agreement is an agreement between an employer and an employees' organization which defines the conditions that will apply in areas such as salaries and employment. Collective and tie-in agreements are considered part of the personal employment contract and you are required to inform your employees of their content.

Illness

In the event of illness, an employee must report sick. This will involve making a claim for sick pay. You as an employer need to ensure that you have determined the correct sick pay. Sick pay is 80% of the employee’s salary and other benefits. A deduction is made from sick pay on the day that the employee becomes ill.

Calculating deductions from sick pay

What happens if your employee becomes ill? Information at the Social Insurance Agency

Salaries and employer contributions

You pay your employees according to the employment contract. The most common form is salary paid on a specific date each month, but you may have other terms in the employment contract.

Employer contributions and employees' tax deductions must be paid into your tax account by the 12th of the month. The employer contribution is composed of several different fees which provide the basic social security cover. For 2022 the employer contribution is 31.42 per cent. For employees who are born 1938-1955 the employer contribution is 10,21 per cent, while employees born in 1937 and earlier do not pay employer contributions at all. For young people who receive a salary of less than 25 000 SEK and att the beginning of the year turned 15 but not 18 years old, the employer pays 10,21 procent in employer´s contributions.

PAYE form

Every month the Swedish Tax Agency sends out a PAYE form to registered employers. You are required to report salaries, employee benefits, deducted tax and employer contributions in this form.

When you submit the form, you also pay the tax and contributions into your company's tax account at the Tax Agency. Employers are from the 1 of januari 2023 required to report the workplace adress and city in the PAYE form,  if the employee only has had one location for the accounting period.

How to fill in the PAYE tax return per employee – Box by box

Submit PAYE tax return

PAYE for non-established businesses

Employing people from other countries than Sweden

Special regulations apply to certain occupations and citizens of certain countries. Most citizens of non-EU countries need a permit to work in Sweden. If you plan to employ a person who is not a Swedish citizen, please contact the Swedish Migration Agency (Migrationsverket) for more information.

About work permits at the Swedish Migration Agency´s website

Foreign employers

If you are a foreign employer and want to employ a temporary worker from other countries than Sweden, you must report the posting as well as a contact person to the Swedish Work Environment Authority (Arbetsmiljöverket). The employee is then subject to certain provisions in Swedish law and collective agreements during his or her work period in Sweden. The Swedish Work Environment Authority can also give information about employment conditions in Sweden.

Report a foreign posting at the Swedish Work Environment Authority

Guide for foreign sole traders with business in Sweden 

Appoint employee representatives to the board

Larger limited companies must have employee representatives on the board. This applies to companies with more than 25 employees. It is the union that appoints employee representatives.