4. Types of leave

There is no information about the types of leave for this country.
Learn more about 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

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.

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.

5. Employment termination

There is no information about employment information for this country.

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.

Probation period

Sweden does not have a statutory probationary period.

Severance pay

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

6. Working hours

There is no information about the working hours for this country.

General working schedule

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

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.

7. Minimum wage

There is no information about the working hours for this country.

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

8. Employee benefits

There is no information about the working hours for this country.

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.

9. Taxes

There is no information about the working hours for this country.

Corporate tax

Unless tax treaties or specific exclusions exist, resident legal entities must pay tax on their global revenue. Non-resident entities are taxed on income considered to have originated in Sweden.

From January 1, 2021, taxable income is subject to corporate tax at a fixed rate of 20.6 percent. Till 31 December 2018, the corporation tax rate was 22% (effective since 2013), and it will be 21.4 percent until 31 December 2020.

All corporate income is considered as business income.

Individual income tax

Swedish residents are subject to both a municipal income tax and a national income tax.

If the income of the taxable person is less than SEK 523,200, the taxable person is exempt of the national income tax.

If the income of the taxable person is over SEK 523,200, the taxable person is subject to a 20 percent national income tax.

The municipal income tax is imposed on a flat rate of 32 percent.

Non-residents working in Sweden for a Swedish employer or a foreign employer with a permanent establishment (PE) in Sweden are taxed at source at a flat rate of 25%. When a pension is paid from a Swedish source to a person who is not a tax resident in Sweden, the same rate applies.

Non-residents working in Sweden for a non-Swedish employer who does not have a PE in Sweden are subject to Swedish taxation if the beneficiary of the employee's labor is a Swedish entity and the work is done under the direction and control of the Swedish entity. The tax rate is set at 25%. An exemption applies if the employee works in Sweden for fewer than 15 consecutive days and less than 45 total days in a calendar year.

VAT, GST and sales tax

The Swedish VAT system is in accordance with EU regulations. Most products and services are subject to a general VAT rate of 25%. Hotel accommodations, foodstuffs (excluding alcoholic beverages), restaurant meals, and low or non-alcoholic drinks (12 percent), as well as newspapers, magazines, books, e-books, passenger transportation, maps, musical notes, some cultural services, ski lift transportation, and so on, are all subject to reduced rates (6 percent ). Certain financial and insurance services are VAT-free.

VAT returns are submitted, and taxes are paid on a monthly or quarterly basis. If the VATable turnover exceeds 40 million Swedish kronor (SEK), VAT returns must be submitted monthly (estimated yearly sales excluding any reverse charge or import acquisitions). Companies with a VATable turnover of less than SEK 40 million must submit VAT quarterly. Companies with a VATable turnover of more than SEK 40 million must report VAT monthly. VAT is reported annually in the VAT return for businesses with a revenue of less than SEK 1 million, and these companies may also opt to submit VAT quarterly or monthly.

10. VISA and work permits

There is no information about the working hours for this country.

Citizens from countries other than the EU, in general, must apply for a work permit in order to work in Sweden. There are a few of exceptions to this rule. Citizens of Australia, Canada, Hong Kong, Japan, New Zealand, and South Korea between the ages of 18 and 30 may also apply for a one-year working vacation visa.

Citizens of certain countries must obtain a work permit and a visa for employment that lasts less than three months.

To be eligible for a work permit, you must have received an official job offer from a Swedish firm. The position must also be advertised for at least 10 days in the EU/EEA. It should also include employment conditions that are comparable to those established by Swedish collective agreements or those that are usual within the profession or sector. Before taxes, the minimum monthly wage should be SEK 13,000 per month.

In addition, you must have a valid passport in your native nation.

11. Employer Of Record service terms

There is no information about the working hours for this country.

Employment contracts

Employment contracts may be either oral or written, however it is highly advised that all employment contracts be in writing. A written contract does not have to have any particular form, however employment contracts often include the following information:

Names and addresses of both the employer and the employee

The start date of the employee's employment.

The work environment

The employee's job title and responsibilities

Whether the contract is indefinite or fixed-term, as well as the contract's term, if it is fixed-term.

The duration of the probation term, if one exists (the maximum time allowed is six months)

Contract termination notice periods

Salary and other components of the employee's pay

The yearly leave allotment of the employee

Typical working hours (per day or per week)

Any pertinent collective bargaining agreements are included.

Minimum assignment length

There is no set length for assignments. This is usually indicated in the employment contract for fixed-term employments.

Payment currency

Swedish Krona

13.Opening a subsidiary in Sweden

There is no information about the working hours for this country.

How to set up a subsidiary

Once you've decided to incorporate in Sweden, you'll need to consider a number of aspects, including where you'll put your headquarters and which languages your workers will need to be fluent in. You should also think about your sector and any crucial pre-existing trade partnerships.

Because Sweden is made up of islands and coastal cities, picking on the best site is critical to the success of your new branch. The majority of the population speaks Swedish, however there are several Sami and Finnish-speaking settlements. However, a significant fraction of the population speaks English well. The nation has a progressive social culture, and many of its citizens are immigrants. As a result, Sweden is recognized for being open to outsiders and for embracing diversity.

A private limited liability corporation is the most prevalent kind of subsidiary. It will take around two weeks to formally establish this sort of Sweden subsidiary, and approximately four weeks to open bank accounts in the nation. The following are the stages to forming a limited liability company:

1. Articles of incorporation should be filed.

2. Register a business name

3. Fill up your tax forms

4. Establish a board of directors as well as a managing director.

5. Create procedures for both the board and the director.

6. Determine who has the authority to sign.

Subsidiary laws

The subsidiary laws of Sweden varies depending on whether you organize as a private or public limited liability company.

A board of directors with at least one person is required for a private limited liability structure. If you have more than two directors, you must nominate at least one deputy director. Your board of directors will need at least one Swedish resident to serve as the company's agent for service of process. Private limited liability firms must also have a minimum share capital of 50,000 SEK to be started.

A public limited liability company must have a minimum share capital of 500,000 SEK and at least three board members. Subsidiary rules in Sweden require these entities to have a managing director and an auditor. A private limited liability business cannot sell shares to the general public, but a public limited liability corporation may.

13. Why choose Rivermate as your Employer of Record / PEO in Sweden

Establishing an entity in

Sweden

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

Sweden

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

Sweden

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

Sweden

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

Sweden

via our Employer of Record / PEO solution.

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