Sweden has a population of over 10 million people with rising industries in the automotive, precision equipment, iron and steel sectors. Multi-national companies find many opportunities for growth and expansion in Sweden, along with challenges of managing a workforce there.
To form a company entity in Sweden, you must have a Swedish bank account, apply with the Swedish Companies Registration Office and Swedish Tax Agency to receive a Registration Certificate. The standard corporate tax rate is 21%, and estimated tax payments must be made monthly throughout the year.
Some labor and payroll considerations in Sweden:
- Key terms and provisions of employment must be in writing
- There is no minimum wage in Sweden, but minimum wages are determined by Collective Bargaining Agreements
- Employers must use a PAYE (Pay As You Earn) system deducting tax from employee pay and submitting to the Swedish Tax Agency for all employees
- Employers must also pay contributions to social security with the National Agency for Social Insurance
- Employers must advertise open positions to Swedish, EU/EEA, and Swiss nationals before offering the job to a foreign worker
- In accordance with the labor laws in the Sweden, payment for work missed due to illness is as follows:
- The first year of sick leave, the employer pays at least 70% of the normal salary, with a minimum of the statutory minimum wage
- The next year of sick leave, the employer pays at least 70% of the normal salary of the employee, without the minimum of the statutory minimum wage
- After two years of sick leave, there is a compensation for the sick pay by the Dutch Government. The regulations can be different when the employer is bound to a collective agreement
- Foreign workers need a residence and work permit if they intend to work in Sweden for more than 3 months
We provide advanced and standard payroll services in Sweden. If a Collective Bargaining Agreement (CBA) is in place, the payroll is customized to the CBA. If the company is new to payroll or does not have a CBA in place, standard payroll services are applied.
Monthly wage, tax, and PAYE declarations are mandatory for all companies. The declaration must be done by someone with a Swedish personal identity number (usually a finance or HR representative of the company) to avoid manual reporting, paper forms, and signatory requirements.
Payroll funding options are customized for your business. If you do not have a local bank account, you can utilize Blue Marble money movement services to fund payroll in USD and we settle in the local currency, or you can send funds to the in-country provider in Euros and pay tax authorities directly. We make it easy to fund payroll and manage currency conversion.
If you’re just getting started in Sweden, or need to improve operations, Blue Marble can help. Our cloud-based payroll technology with customized reporting gives you real-time views of your payroll costs across all countries and currencies. Our US-based service team and direct access to in-country experts are here to help when questions come up. Simplify your payroll, reduce compliance headaches, and ensure you stay ahead of local regulations in Sweden with Blue Marble. To learn more, click here