Guide to employment, payroll and benefits in


Rivermate offers complete payroll, benefits and compliance services for


01. Overview

Last updated: 

August 19, 2021

Swedish Krona
Ease of doing business
GDP growth

02. Grow your team in


with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in


, particularly if you don't have established local relationships. You can hire employees in


effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Sweden is a Nordic country in Northern Europe, officially known as the Kingdom of Sweden. It shares borders with Norway to the west and north, Finland to the east, and Denmark to the southwest through a resund Strait bridge-tunnel. Sweden is the largest country in Northern Europe, the third-largest country in the European Union, and the fifth-largest country in Europe, with a total area of 450,295 square kilometers. Stockholm is the country's capital. Sweden has a population of 10.4 million people and a low density of 25 people per square kilometer. 87% of Swedes live in towns, which account for 1.5% of the country's total land area. The northern and southern halves of the country have the largest concentration. Fennoscandia is the geographical region that includes Sweden. Due to strong maritime influence, the climate is generally mild for its northerly latitude. Sweden, despite its latitude, has hot continental summers due to its location between the North Atlantic, the Baltic Sea, and vast Russia. Due to the vast latitudinal difference, the general climate and atmosphere differ greatly from south to north, and most of Sweden experiences consistently cold and snowy winters. The southern half of Sweden is mostly rural, while the northern half is heavily forested and contains a part of the Scandinavian Mountains. Since prehistoric times, Germanic tribes have lived in Sweden, becoming known as the Geats and Swedes, and forming the Norsemen, a sea people. In the early 12th century, Sweden became an independent state. The Hanseatic League threatened Scandinavia's society, finances, and languages after the Black Death killed around a third of the Scandinavian population in the middle of the 14th century. In 1397, the Scandinavian Kalmar Union was established, from which Sweden withdrew in 1523. When Sweden joined the Reformist side in the Thirty Years War, it started to expand its territory, ultimately becoming the Swedish Empire. Until the early 18th century, it was one of Europe's great powers. During the 18th and 19th centuries, Swedish lands outside the Scandinavian Peninsula were steadily lost, culminating in Russia's annexation of modern-day Finland in 1809. Sweden's last overt involvement in a war was in 1814, when Norway was militarily forced into a personal union, which was peacefully dissolved in 1905. Since then, Sweden has been at peace, adhering to an official foreign policy of neutrality. Sweden celebrated 200 years of peace in 2014, shattering even Switzerland's peace record. Sweden remained officially neutral during both world wars and the Cold War, though it has freely pushed toward NATO cooperation since 2009. Sweden is a constitutional monarchy and a parliamentary democracy, with the 349-member unicameral Riksdag wielding legislative authority. It is currently divided into 21 counties and 290 municipalities and is a unitary entity.

04. Public holidays

05. Types of leave

Paid time off

After one year of employment, employees are entitled to 25 days of paid vacation every year. Vacation days can be saved for up to five years once they've been accumulated.Vacation compensation makes for 12% of an employee's annual gross wage.

Public holidays

Sweden recognizes thirteen public holidays.

Sick days

For the first 14 days of sick leave, an employer is liable for paying 80% of an employee's wages.Employers must report to the Swedish Social Insurance Office after 14 days, and employees must apply for benefits. On the fifteenth day, social insurance begins to pay for sick leave.

Maternity leave

Mothers are entitled to 240 days of paid leave, which can begin 60 days before the due date.

Paternity leave

Fathers in Sweden are entitled to 240 days of paid leave.

Parental leave

Swedish parents are entitled to 480 days of paid parental leave, with 90 of those days reserved for each parent. Except for the first 10 days after the delivery, leave should not be taken at the same time. The whole 480 days are offered to single parents.

Other leave

Employees in Spain are entitled to ten days of bereavement leave.

06. Employment termination

Termination process

Employers must have a legitimate reason for dismissing an employee.

Prior to terminating an employee, the employer must attempt to place the employee in an other position within the organization.

Employers who have more than five employees are required to notify the Employment Service. Additionally, businesses are required to deal with relevant trade unions.

Following talks, the employer must deliver a written and in-person notice of termination. If this is not practicable, a registered letter to the employee's address may be sent.

Notice period

In Sweden, notice periods are governed by employment contracts, collective bargaining agreements, or the Employment Protection Act. When the employer initiates the termination and there is a collective bargaining agreement, the notice periods should be agreed upon and stated in the employment contract. One month is the most common notice period. However, in the absence of a collective bargaining agreement, the notice period varies according to the length of employment. If the employment relationship is less than two years, at least one month's notice is required. Employees who have worked for more than two years but less than four years are entitled to a two-month notice period. If an employee has worked for the company for more than four but less than six years, they are entitled to a three-month notice period. Employees who have worked for the company for more than six years but less than eight years are entitled to a four-month notice period. Employees who have worked for the company for more than eight years but less than ten years are entitled to a five-month notice period. If the employee has worked for the company for more than ten years, they are entitled to a minimum of six months notice. Employers may also dismiss employees without cause if they have engaged in egregious misconduct. When the employee initiates the termination and there is a collective bargaining agreement, the notice period should be agreed upon and stated in the employment contract. One month is the most common notice period. However, in the absence of a collective bargaining agreement, the notice period is one month under the Employment Protection Act.

Severance pay

While employers are not required to pay severance pay, it may be included in the employment agreement.

Probation period

Sweden does not have a statutory probationary period.

07. Working hours


In Sweden, the standard work week is 40 hours spread over five days. Workers are entitled to a five-hour break after five consecutive hours of work and a one-and-a-half-hour break after every twenty-four-hour period.


Overtime hours should not exceed 48 in a four-week period, 50 in a month, or 200 in a year. Overtime rules should be spelled out in a collective bargaining agreement or employee contract, and are typically compensated through pay or leave.

For weekday overtime worked prior to 8 p.m., the overtime allowance is equal to the monthly salary divided by 94 for each hour worked. For overtime worked after 8 p.m. or on weekends, the monthly salary is divided by 72 for each hour worked. Employees who hold managerial or comparable positions are not eligible for overtime pay, as are employees who schedule their own work hours.

08. Minimum wage


There is no national minimum wage in Sweden. Minimums are established via collective bargaining agreements negotiated by trade unions.

09. Employee benefits


Sweden provides universal health care, with the healthcare system being mostly administered at the county and municipal levels. Although private health insurance is accessible, only a tiny proportion of Swedish citizens have it.

If an employee is a member of a union, the CBA may require that he or she get private health insurance. Private health insurance is utilized to bypass the queue of public health insurance and give cash upfront rather than paying out of pocket and waiting for public health insurance to repay them. In Sweden, this benefit is part of a packaged plan that also includes a pension and certain protective benefits.

Some employers provide food coupons, corporate vehicles, stock incentive programs, and/or additional vacation time

Private pension plans for both employers and employees are also extremely common in Sweden. Non-EU nationals working in Sweden are usually required to have private pension insurance in order to get a Swedish work visa. In Sweden, it is not obligatory for an employer to provide an additional pension, but it is quickly becoming a popular and desired supplementary perk. It is standard practice to provide workers with a private pension once they have completed their trial term. It is customary for them to set aside 5-10% of their monthly gross income.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in


to hire a team takes time, money, and effort. The labor law in


has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into


simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in


give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in


via our Employer of Record / PEO solution.

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