Employer of Record in Sweden

An Employer of Record, or EOR, is a company that legally hires employees on your behalf in another country. If you want to hire someone in Sweden, but you don’t have a legal entity there, you can use an EOR. The EOR handles all the legal and HR tasks that come with employment. This includes payroll, taxes, benefits, and making sure you follow Swedish labor laws. You still manage your employee’s day to day work. The EOR simply acts as the legal employer on paper. For companies looking to hire in Sweden without setting up a local office, an EOR like Rivermate can make it happen.

How an Employer of Record (EOR) Works in Sweden

Using an EOR in Sweden simplifies the process of hiring talent. Here is a step by step look at how it works:

1. You Find the Talent: You find the person you want to hire in Sweden. You agree on the job role, salary, and start date.
2. The EOR Hires Them: The EOR then legally hires the employee on your behalf. They create a compliant employment contract that follows Swedish law.
3. Onboarding: The EOR manages the onboarding process. This includes all the necessary paperwork to get your new employee started.
4. Payroll and Benefits: The EOR handles all payroll duties. They make sure your employee gets paid correctly and on time. They also manage benefits like health insurance and pensions.
5. Compliance: The EOR ensures that you stay compliant with all Swedish labor laws and regulations. This helps you avoid legal issues.
6. You Manage the Work: You manage your employee's daily tasks and projects. The EOR handles the HR and legal side of things.

Benefits of Using an EOR for Hiring in Sweden

Using an EOR to hire in Sweden offers several advantages. It allows you to expand your team without the usual headaches of international hiring. You get to focus on your business while the EOR takes care of the complexities of employment law.

• Hire Without a Local Entity: You can hire employees in Sweden without needing to set up a legal entity in the country. This saves you time and money.
• Stay Compliant: EORs are experts in local labor laws. They make sure you follow all the rules, reducing your risk of legal trouble.
• Faster Onboarding: You can hire and onboard new employees much faster. An EOR already has the systems in place to get people started quickly.
• Save Time and Money: Setting up a legal entity can be expensive and time consuming. An EOR is a more cost effective way to hire internationally.
• Access to Benefits: EORs can often provide your employees with access to better benefits packages than you could on your own.
• Focus on Your Business: With an EOR handling HR and legal tasks, you can focus on growing your business and managing your team.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Sweden includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Sweden.

Hiring in Sweden is a unique experience. The country is known for its stable job market and strong labor protections. You'll find a highly educated workforce with a focus on technology and innovation. Work-life balance is a key part of the culture. Collective bargaining agreements have a big influence on the workplace, covering most employees. These agreements set standards for wages, benefits, and working conditions.

Employment contracts & must-have clauses

While you can technically agree to an employment contract verbally, you must provide employees with written terms of employment. It's best to have a written contract from the start. The standard is a permanent or indefinite-term contract.

Your employment contract needs to include these key details:

• Your name and address, and the employee's name and address
• The start date of the employment
• The place where the work will be done
• The employee's job title and responsibilities
• The type of employment, such as permanent or temporary
• Notice periods for termination
• The salary and how often it will be paid
• Information on annual leave
• Normal working hours

Probation periods

In Sweden, you can use a probationary period to see if a new hire is a good fit. This trial period can be for a maximum of six months. If you don't end the employment during the probation, it automatically becomes a permanent position.

You must state the probation period in the employment contract for it to be valid. To end employment during probation, you need to give at least two weeks' notice.

Working hours & overtime

The standard workweek in Sweden is 40 hours. Anything beyond these hours is considered overtime.

Here's a breakdown of overtime regulations:

Overtime pay rates are usually set by collective agreements and are often 50% to 100% higher than the regular salary.

Public & regional holidays

Sweden has a number of public holidays, often called "red days." Here are the public holidays for 2025:

• January 1 - New Year's Day
• January 6 - Epiphany
• April 18 - Good Friday
• April 20 - Easter Sunday
• April 21 - Easter Monday
• May 1 - May Day
• May 29 - Ascension Day
• June 6 - National Day
• June 21 - Midsummer Day
• November 1 - All Saints' Day
• December 25 - Christmas Day
• December 26 - St. Stephen's Day/Boxing Day

Hiring contractors in Sweden

You can hire independent contractors in Sweden, but you need to be careful about how you classify them. An independent contractor is treated like a separate business. They are responsible for their own taxes and social security contributions.

The risk is misclassifying an employee as a contractor. Swedish authorities look at the actual working relationship, not just the contract. If they decide a contractor is really an employee, you could face penalties. These can include paying back taxes and social security contributions.

An Employer of Record (EOR) can help you avoid these risks. An EOR takes on the legal responsibility for your employees. This includes making sure they are classified correctly and that you comply with all local employment laws. Using an EOR simplifies the process of hiring in Sweden and reduces your risk.

Understanding compensation and payroll in Sweden is straightforward. The system is well-structured, balancing employee rights and employer responsibilities. Labor laws and collective bargaining agreements heavily influence how you pay your team, ensuring fairness and clarity. This guide breaks down the key areas you need to know.

Payroll cycles & wage structure

In Sweden, you typically pay your employees once a month. The most common payday is the 25th of the month. You must provide a payslip with each payment, which can be in paper or electronic format. Also, remember to keep all payroll records for at least seven years.

Sweden does not have a legally mandated minimum wage. Instead, collective bargaining agreements (CBAs) set minimum wages for about 90% of the workforce. These agreements are negotiated between employer organizations and trade unions and vary by industry. For employees not covered by a CBA, you negotiate their wages directly. Bonuses, like a 13th-month salary, are not required by law but may be included in CBAs or individual employment contracts.

Overtime & minimums

The standard workweek in Sweden is 40 hours. Overtime is regulated by the Working Hours Act and CBAs. If an employee works more than the standard hours, they are entitled to overtime pay. The premium rate for overtime is typically 50-100% higher than the regular salary, though specific rates are often defined in a CBA.

As mentioned, there is no national minimum wage. Instead, CBAs establish the minimum pay rates for different industries and roles. These rates are generally high and are determined by factors like the employee's age and experience.

Employer taxes and contributions

As an employer, you pay social security contributions on top of an employee's gross salary. The total contribution is 31.42%. These payments fund various social welfare programs.

Employee taxes and deductions

Employees in Sweden pay both municipal and national income tax. You are responsible for withholding these taxes from your employees' salaries each month.

In Sweden, you'll find a strong system of employee benefits and leave, shaped by law and collective agreements. This provides a solid safety net and promotes fair working conditions. For companies, understanding these benefits is key to attracting and keeping talent.

Statutory leave

Swedish law provides several types of mandatory leave.

• Annual Leave You are entitled to a minimum of 25 paid vacation days per year. Many agreements provide more, often 30 days. You can also take a continuous four-week vacation between June and August.
• Sick Leave If you are sick, your employer pays sick pay for the first 14 days of illness at about 80% of your regular salary. After the first 14 days, you may be eligible for sickness benefits from the Swedish Social Insurance Agency (Försäkringskassan).
• Parental Leave Sweden offers generous parental leave. Parents get a total of 480 days of paid leave per child, which they can share. A part of these days is reserved for each parent. The compensation is mostly paid by Försäkringskassan.
• Educational Leave If you have been employed for the last six months, or for a total of at least 12 months in the last two years, you have the right to take leave for education.
• Leave to Start a Business You can take up to six months of leave to start your own business. However, your business cannot compete with your employer's business, and the leave can be denied if it causes significant problems for your employer.

Public holidays & regional holidays

In Sweden, public holidays are often called "red days" because they appear in red on calendars. If a holiday falls on a weekend, it is not moved to a weekday.

Typical supplemental benefits

Beyond the legal requirements, many companies in Sweden offer additional benefits.

How an EOR can help with setting up benefits

Setting up employee benefits in a new country can be complex. An Employer of Record (EOR) simplifies this process for you.

An EOR already has a legal entity in Sweden. This means they understand the local laws and common practices for employee benefits.

Here is how an EOR can help:

• Compliance An EOR ensures your benefits packages meet all of Sweden's legal requirements.
• Competitive Offers They can advise you on supplemental benefits that will attract top talent in the Swedish market.
• Administration An EOR handles the administration of all benefits, from payroll deductions to communicating with local providers.
• Saves Time You avoid the time and expense of setting up your own legal entity and benefits plans from scratch.

Using an EOR allows you to offer your Swedish employees competitive and compliant benefits without the administrative burden.

When you part ways with an employee in Sweden, you need to follow a structured process. Swedish law protects employees, so you must have a valid reason for termination. These reasons fall into two main categories: personal reasons, like misconduct, or business reasons, such as redundancy. The process requires clear communication and adherence to legal timelines.

Notice periods

You must provide employees with a notice period before their employment ends. The length of this period depends on how long they have worked for your company. The Swedish Employment Protection Act sets minimum notice periods.

Here are the standard minimum notice periods you must give:

• Less than 2 years of employment: 1 month
• 2 to 4 years of employment: 2 months
• 4 to 6 years of employment: 3 months
• 6 to 8 years of employment: 4 months
• 8 to 10 years of employment: 5 months
• More than 10 years of employment: 6 months

Keep in mind that collective bargaining agreements or individual employment contracts can specify longer notice periods. During the notice period, the employee continues to work and receive their regular pay.

Severance pay

Swedish law does not require you to pay severance to terminated employees. However, it is common practice. Many collective bargaining agreements include terms for severance pay. Individual employment contracts can also contain clauses for it. If you end an employment relationship, check the applicable agreements to see if you owe severance pay.

How Rivermate handles compliant exits

Navigating employee terminations in a different country can be complex. We make sure every step of the offboarding process is compliant with Swedish law.

Here’s how we help you manage exits:

• Legal Compliance: We ensure every termination meets the requirements of the Swedish Employment Protection Act and any relevant collective agreements.
• Documentation: We handle all the necessary paperwork, from the termination notice to final pay calculations.
• Clear Communication: We help you communicate clearly with your employee, explaining the reasons for termination and the next steps.
• Risk Reduction: By following a legally sound process, we help you minimize the risk of disputes and legal challenges.

We manage the details so you can focus on running your business.

Navigating the world of Swedish visas and work permits can feel complicated. You need to understand the rules to bring international talent to your team. Sweden, like many countries, has specific requirements for non-EU citizens who want to work there. For EU citizens, the process is much simpler, as they generally do not need a permit to work in Sweden. The main goal is to ensure that you are compliant with Swedish laws, whether your employee is in Sweden for a short business trip or a long-term assignment.

Employment visas & sponsorship realities

When it comes to hiring non-EU nationals, you will need to sponsor a work permit. An Employer of Record (EOR) can be a practical solution for this. An EOR can legally hire employees on your behalf in Sweden, handling the complexities of visa sponsorship and ensuring compliance with local labor laws. This means you can onboard new team members without having to set up a legal entity in the country.

What an EOR can typically sponsor:

• General Work Permits: This is the most common type of permit for non-EU nationals who have a job offer from a Swedish employer.
• EU Blue Cards: This permit is for highly skilled workers with a university degree and a qualifying salary offer.

What can be challenging or impossible for an EOR to sponsor:

• Intra-Corporate Transfers (ICT): These permits are for employees transferring from a branch of a company outside the EU to a Swedish branch. This may fall outside the scope of a standard EOR service.
• Roles not meeting salary thresholds: The Swedish government sets minimum salary requirements for work permits. If the offered salary doesn't meet this threshold, a permit cannot be sponsored.
• Positions in highly regulated industries: Newly founded companies or those in certain sectors may face more intense scrutiny and longer processing times, which can impact an EOR's ability to secure a permit quickly.
• Visa quotas: The ability to sponsor foreign nationals can sometimes be limited by national visa quotas, although this is a broader national policy rather than a specific EOR limitation.

The reality is that while an EOR simplifies the process, it is not a workaround for legal requirements. The job offer must be genuine, and the candidate must meet all the criteria set by the Swedish Migration Agency.

Business travel compliance

For short-term visits, it is crucial to understand the line between business travel and work. A business trip should not involve productive work that could be done by a Swedish resident.

Permissible activities on a business trip:

• Attending internal meetings and conferences.
• Participating in training.
• Negotiating contracts.

Key compliance points for business travelers:

• Invitation Letter: The traveler should have a formal invitation from the Swedish company they are visiting. This letter should detail the purpose and duration of the visit.
• Schengen Visa: Depending on their nationality, the traveler may need a Schengen visa for stays up to 90 days.
• Proof of Funds: Travelers must be able to show they have sufficient funds to cover their expenses during their stay.
• Travel Insurance: Medical travel insurance is a mandatory requirement.

It is important to note that some short-term work activities may be exempt from a work permit, but this is assessed on a case-by-case basis. For example, a specialist from an international company working in Sweden for a short period might be exempt. Always check the latest regulations with the Swedish Migration Agency before travel to avoid any compliance issues.