Engage In Sweden

Table of Contents

About Sweden

Capital City

Stockholm

Population

As of March 2024, the estimated population of Sweden is 10,612,086 people.

Currency

The currency in Sweden is the Swedish Krona (SEK). The currency symbol is kr.

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Overview

Sweden, officially known as the Kingdom of Sweden, is a Scandinavian country in Northern Europe. It is renowned for its stunning landscapes, rich culture, and high standard of living. With a population of approximately 10 million people, Sweden is one of Europe’s largest countries by land area. The country is known for its remarkable balance between modernity and nature, boasting vibrant cities and vast expanses of unspoiled wilderness. Swedish, known as Svenska, is a North Germanic language closely related to Danish and Norwegian. Stockholm, the capital of Sweden, is a dynamic city where innovation and tradition seamlessly blend. Sweden is famous for its progressive social policies, promoting gender equality, quality education, and a robust welfare system. The country has significantly contributed to design, technology, music, and literature. Swedish cultural heritage is celebrated through various traditions, including the Midsummer Festival and the Nobel Prizes awarded annually in Stockholm. Whether it’s exploring picturesque landscapes, indulging in Swedish cuisine, or experiencing the unique Swedish way of life, Sweden offers a captivating and enriching experience for visitors and residents alike.

Employment Relationship

Permanent Employment

As per Sweden's Employment Protection Act, employment is usually for an indefinite term except as otherwise agreed. Employment contracts that are valid for an indefinite term can be terminated by the employer or the employee, with effect following a certain notice period. Such contracts can also include a probationary period of six months. During probation, contracts can be terminated without notice. 

Fixed-Term or Specific-Purpose Contracts

A fixed-term contract may be concluded for specific fixed-term employment (project-driven or fixed duration employment), temporary substitute employment (cover for when an employee is on leave), seasonal employment, and when the employee has reached the age of 67. A fixed-term contract is allowed for a maximum of 12 months over a 5-year period. A fixed-term employee who is employed by the same employer for more than 12 months in five years is considered an indefinite term employee if the second term of employment began within six months of the last day of the previous employment period. The contract is not transformed into an indefinite term contract for employees who have reached 67 years of age. An employee employed for a fixed term and whose contract is not renewed when the employment ends must be notified by the employer not less than one month before the employment period's expiration.

Temporary Employment Contratcs

Employees are allowed to hire temporary employees through a temporary staffing agency. A temporary work agency must guarantee the employees the same basic working and employment conditions as those of the employees directly hired by the user undertaking for the same job. The agency cannot prohibit a temporary worker from accepting a direct employment offer made by a user undertaking. The user undertaking must provide temporary workers access to collective facilities and amenities under the same conditions as workers employed directly by it.  The Employment Protection Act also allows a temporary substitute employment contract, a type of fixed-term contract concluded to substitute an absent employee.

Probationary Period

Probationary periods cannot be longer than six months. Provided that a two-week notice is provided, either party can terminate the employment relationship at any time and for any reason (except those discriminatory in nature) during the probationary period.  An employer may decide not to offer indefinite term employment to a worker on probation. In this case, during the probationary period, the employer must provide the employee with at least two weeks' notice of the intention not to continue employment on the probation's expiry. In the absence of such notice, upon expiry of the probation period, employment will be for an indefinite term.

Working Hours

In Sweden, the normal working hours of full-time employees are 40 hours per week. If due to the nature of the activity, an employee must be at the workplace waiting to carry-out work as needed, the employee may claim on-call time to a maximum of 48 hours over four weeks or 50 hours per calendar month. While Sweden does not have a specific legislation regarding remote working in place, the Work Environment Act states that employers are responsible for an employee's work environment even if they are working from home. Employers must do everything necessary to prevent the employee from being exposed to ill health or accidents. In addition to the statutory breaks, employees must be able to take shorter breaks that count towards working time.

Holidays / PTO

Statutory Holidays

New Year’s Day (nyårsdagen): January 1, Epiphany (trettondedag): January 6, Good Friday (långfredagen): The Friday before Easter Sunday,Easter Sunday (påskdagen): The Sunday closest after the full moon that occurs on or closest after 21 March, Easter Monday (annandag påsk): The day after Easter Sunday, International Workers’ Day (första maj): May 1, Ascension Day ( Kristi himmelsfärdsdag): Sixth Thursday after Easter Sunday, Pentecost (pingstdagen): Seventh Sunday after Easter Sunday, National Day of Sweden (Sveriges nationaldag): June 6,Midsummer’s Day ( midsommardagen ): The Saturday during the period 20–26 June, All Saints’ Day ( alla helgons dag ): The Saturday during the period 31 October–6 November,Christmas Day ( juldagen ): 25 December, Boxing Day ( annandag jul ): 26 December.

Paid Annual Leave

Employees are entitled to 25 days of paid annual leave per year, starting from the first year of employment. A worker has the right to carry over five days of annual leave per year for up to five years to take a longer holiday in a given year. Saturdays, Sundays, and public holidays are not counted towards annual leave days unless the employee usually works on weekends, and leave is shorter than five days. Annual leave pay depends on how an employee is compensated. For employees paid weekly or monthly, the same-pay rule applies with certain exceptions. The holiday supplement for weekly-paid employees is 1.82% of weekly pay. The holiday supplement for monthly-paid employees is 0.43% of monthly pay. If the employee has variable pay components, the holiday pay is 12% of the employee's aggregate variable pay that fell due during the annual leave year.

Sick Leave

Employees who are absent from work due to sickness are entitled to sick pay for the first 14 days of sickness except for the first day, known as the "waiting day." The employer is required by law to pay sick pay to the employees during days two to 14 of illness. After two weeks, employees can apply for sickness benefits from the Swedish Social Insurance Agency (Försäkringskassan). The maximum benefit is SEK 1,027 (Swedish krona) per day. If an employee is on sick leave for more than a year, their benefits are reduced to 75% of the income. In case of serious illness, benefits continue to be 80% of the income.

Maternity Leave

Female employees are entitled to full leave in connection with their child's birth during a continuous period of at least 7 weeks before the estimated time for delivery and seven weeks after the delivery. An employer is not under obligation to pay employees during maternity leave, in which case maternity benefits are covered by the Swedish Social Insurance Agency. Benefits are paid as 80% of income, up to a maximum of SEK 837 (Swedish krona) per day up to the eleventh day before the expected delivery date. Employees can also request to start the benefits 60 days before their estimated date of delivery if they cannot carry out the job and cannot be transferred to any other job. If the employer has banned an employee from continuing work due to risks in the work environment, she can receive pregnancy benefits from the day the ban applies.

Paternity Leave

In Sweden, the non-pregnant partner can take a temporary leave of ten working days in connection with childbirth or adoption of a child under 10 years of age. The leave is doubled for twins and tripled for three kids, and so on. This leave can be used at any time during the first 90 days after childbirth or placement. Paternity leave is paid at 80% of the income. Payments come from the Swedish Social Insurance Agency. Employees can also choose to reduce their working hours, claim compensation for 25%, 50%, or 75% of their regular working hours, and increase the duration of leave from ten days to 20 days.

Termination of Employment

Notice Period

The notice period for indefinite term employees is calculated as follows: Zero to two years of employment: one month's notice Two to four years of employment: two months' notice Four to six years of employment: three months' notice Six to eight years of employment: four months' notice Eight to ten years of employment: five months' notice More than ten years of employment: six months' notice Notice must be given in writing, given personally to the employee, and contain certain formalities (particularly, the reason for termination and how the employee should proceed if they wish to challenge the termination). In the case of fixed-term employment contracts, when the contract of an employee employed for at least 12 months in the last three years ends and will not be renewed, the employer must provide at least one month's notice before the contract's expiry. 

Severance Benefits

Sweden has no statutory severance pay requirements relative to the termination of an employment contract. Severance pay is usually stipulated in individual employment contracts and collective agreements. The collective bargaining foundation, TRR Trygghetsrådet, assists employees whose employment has been terminated due to a shortage of work or illness. In this case, both the employer and employee must apply for benefits. Employees who are above 40 years of age and under 65 years, have worked for 5 consecutive years at a TRR-affiliated company, have a monthly salary of at least SEK 35,800 (Swedish krona), and permanently employed at the time of termination are eligible for severance pay (Avgångsersättning-AGE).   AGE provides 70% of the previous salary, including compensation from the unemployment insurance fund. AGE is payable from 6 months up to 18 months after cessation of employment, depending on the employee's age.

Social Security

Pension

According to the Social Insurance Law of Sweden, the standard retirement age is 66 years, regardless of gender. Sweden has three pension types available for retirees: general pension, supplementary pension, and guaranteed pension. The general pension is an earnings-based pension model financed by contributions from employees or self-employed persons. A minimum pensionable income of three years is required to be eligible. The amount of the earnings-based pension is calculated by dividing the money in the employee's pension account at the time of retirement by the number of years a person of that age can be presumed to have survived. Supplementary pension is available to people born in 1953 or earlier, as a part of their general pension, calculated on the price base amount applicable for the year. If the calculated general pension is less than SEK 14,882 per month for a single person or less than SEK 13,477 per month for a married person, they may be entitled to a guaranteed pension. The guaranteed pension depends on residence in Sweden and does not differentiate between employees and self-employed individuals. The amount of guaranteed pension is 2.13 times the price base amount (SEK 9,781 per month) for a single person and 1.90 times the base amount (SEK 8,855 per month) for a married person.

Dependents/Survivors Benefit

According to the laws of Sweden, relatives of a deceased insured person are entitled to social insurance benefits payable as a transitional pension, orphan's pension, and widow(er) pension. A transitional pension is paid for 12 months after the death. The period can be extended for an additional 12 months if a survivor has custody of a child under 18 or continues until the youngest child attains 12 years of age. The orphan's pension ranges between 30-35%, depending on the child's age (12-18 years). If there is more than one orphan, the pension ranges between 20-25%. The transitional pension is 55% of the deceased person's accrued pension rights.

Invalidity Benefit

Insured employees are entitled to sickness benefits for temporary disability: 80% of the insured person's lost earnings will be paid from day 15 until day 364 in a 450 day period. The period is extendable to 550 days, in which case 75% of the insured person's lost earnings will be paid. Employers pay a sickness benefit during the first 14 days (except for the first day, which is considered a "waiting period"). From July 2021, employees will not receive disability compensation at three levels depending on how much help they receive and how much additional costs they have. They will be eligible for Additional Cost Allowance if they fulfill certain conditions and have additional expenses due to a disability that can be presumed to last at least a year. Additional expenses include costs beyond the costs common for people of the same age who do not have a disability and one-off expenses related to healthcare and diet, wear and cleaning, help in day-to-day life, assistive devices, and other purposes. The benefits are calculated depending on the employee's total additional expenses approved by the Social Insurance Institute.

Taxation of Compensation and Benefits

Personal Income Tax

An individual who is considered an unlimited tax resident is taxed on worldwide income, while a limited tax resident is liable to pay taxes only on income sourced in Sweden. On the other hand, Swedish citizens and foreigners who have been residents for at least ten years are deemed residents for income tax purposes until they can prove that all important ties with Sweden have been broken. The employment income of non-residents is taxed at a flat rate of 25%. Business income and residents' employment income are subject to both municipal income tax and national income tax. The present average municipal rate is 32.37%. National income tax is levied at a rate of 20% on the portion of earned income exceeding SEK 614,000 (Swedish krona).

Immigration

Types of Visas

With the exception of nationals of the UK, Australia, Canada, U.S.A., individuals require a Schengen Visa to visit Sweden. This visa allows an individual to stay in Sweden for up to 90 days. Those who wish to stay longer than three months require a visitor's residence permit. A Schengen Visa may be granted for the following purposes: Visiting relatives or friends (requires an invitation from the host) Business or conference visits, seminars, or similar arrangements (requires an invitation from the host company) Tourism Medical treatment (requires a medical certificate detailing the treatment and proof that money has been deposited in Sweden for the same) Religious purposes (requires an invitation from a religious organization/assembly) Studies and research (requires an invitation or proof of acceptance from a university in Sweden) Internship or volunteering (requires an invitation from the internship/volunteer organization) EU citizens don't need a permit to visit, work, or live in Sweden. EU nationals may stay for an unlimited period but must register with the local authorities if staying longer than three months.

Work Permit

Citizens of countries outside the EU must have a work permit to work in Sweden. To obtain such a permit, a person must have a job offer from an employer in Sweden. The employer must have prepared the offer of employment and advertised the job in Sweden and the EU for at least ten days (this applies to new recruitment). The terms of employment must be at least on par with those set by Swedish collective agreements or those which are customary within the occupation or industry.  A work permit is valid for up to 1 year and is renewable. A new entry visa known as a D-visa has been introduced. The entry visa makes it possible for a person who has applied for an extension to their residence permit to go on a business trip outside Sweden during the processing time. EU and EEA citizens do not require a visa. They have the right to work in Sweden without work and residence permits. However, if EU or EEA citizens want to stay longer than three months, they must register with the Swedish Migration Board. 

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