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How to hire and pay employees in Sweden
Slasify
Jun 21, 2025
| Key Takeaways |
|---|
| 1. Payroll operates monthly, with no statutory minimum wage; payment frequency depends on agreements or collective bargaining. |
| 2. Personal income tax is progressive up to 20%, with additional municipal/local taxes varying by municipality. |
| 3. Social security, pensions, and other statutory contributions apply to both employers and employees, with rates varying by scheme and employee age. |
| 4. Standard working hours are 40 per week, with regulated overtime, daily rest, and weekly rest periods. |
| 5. Annual leave is 25 days, plus 13 public holidays, sick leave, maternity/paternity leave, and parental leave. |
| 6. Termination requires statutory notice based on years of service; severance pay is generally not mandatory unless specified by contract or collective agreement. |
| 7. Probationary period is up to 6 months, with leave, bonus, and overtime policies determined by role, seniority, and agreement. |
Discover the global hiring and employment landscape in Sweden – a country known for its innovation, sustainability, and high quality of life. Sweden's robust economy and highly skilled workforce make it an excellent destination for businesses looking to expand in the Nordic region.
Personal Income Tax
Employees are only required to pay the following state tax on top of their local taxes if their annual income exceed the specified threshold:
| Taxable Income (SEK) | State Tax Rate (%) |
|---|---|
| Up to 625,800 | - |
| Over 625,800 | 20 |
To facilitate the calculation of how much income one can have before the state income tax is levied, one can start from the so-called break point. These break points are as follows:
| Deduction | What does this mean? | |
|---|---|---|
| Have not turned 66 at the beginning of the year | SEK 17,300 | This individual can have a total annual income of SEK 643,100 (625,800 + 17,300) before the state income tax begins to be collected |
| Have turned 66 at the beginning of the year | SEK 107,400 | This individual can have a total annual income of SEK 733,200 (625,800 + 107,400) before the state income tax begins to be collected |
Local Tax
Individuals in Sweden are generally required to pay local tax on their income, which varies across localities.
| Local tax rate (%) | |
|---|---|
| Highest | 35.30 (in Degerfors kommun) |
| Lowest | 28.98 (in Österåkers kommun) |
A complete tax table for the local tax rate in each municipality can be accessed here.
A tax calculator is provided by Skatteverket to assist in determining the amount of tax payable in each case, including any applicable burial fee and church tax.
Statutory Contributions
Employer Contribution
| Contribution Rate | |
|---|---|
| General payroll tax | 11.62 |
| Health insurance fee | 3.55 |
| Labor market fee | 2.64 |
| Parental insurance fee | 2.60 |
| Retirement pension fee | 10.21 |
| Survivor's pension contribution | 0.60 |
| Workers' compensation fee | 0.20 |
There are certain reductions in employer contributions that have been decided for labor market policy reasons, e.g. regional support and growth support, and to stimulate certain areas, e.g. research and development.
Furthermore, special contribution rates may apply depending on the employee's birth year, as follows:
| Birth year | Special contribution rate |
|---|---|
| 1959 or later | Employer contributions are paid in full (31.42%). |
| 1938–1958 |
As of January 1, 2023, only old-age pension contribution (10.21%) must be paid on taxable compensation to persons who have turned 66 at the beginning of the year. From 1 January 2026, it applies to people who have turned 67 at the start of that year. |
| 1937 or earlier | No contribution needed |
Note: A comprehensive overview of how the employee's nationalities influence the employer's contribution rate in the international context can be accessed here.
Employee Contributions
Employees are generally required to pay a 7% general pension contribution on their income, but no more than SEK 45,500.
Payment of Wages
Employees are generally paid their wages monthly.
Minimum Wage
Sweden does not have a statutory minimum wage, though they may be regulated within the collective bargaining agreements that apply.
Statutory Bonus
There are no statutory bonus in Sweden.
Termination
Employment contracts that are valid for an indefinite term may be unilaterally terminated by either party, provided that the required notice period is observed. However, either party can terminate the employment contract with immediate effect if the other party has grossly neglected their obligations to the other.
Employers can only unilaterally dismiss their employees on objective grounds, such as redundancy or other reasons personally attributable to the employee.
| What is considered to be a non-objective ground? | How to dismiss for reasons personally attributable to the employee? |
|---|---|
|
Termination is not based on objective grounds if it is reasonable to require the employer to provide the employee with an alternative work. If the employer has previously provided the employee with different work due to circumstances personally attributable to the employee, the employer is considered to have fulfilled its re-deployment obligation, unless there are special grounds. |
If the employee is dismissed based on circumstances personally attributable to the employee, it must not be based solely on circumstances that were known to the employer for more than 2 months before the notice of termination. Notice of termination by the employer must be given in writing, stating in it the procedure to be followed by the employee in the event they wish to challenge their dismissal. |
Notice Period
Unless otherwise agreed to in a collective agreement or individual contract, the notice period that needs to be observed for permanent employees is as follows:
| Length of Service | Notice Period |
|---|---|
| Less than 2 years | 1 months |
| 2–3 years | 2 months |
| 4–5 years | 3 months |
| 6–7 years | 4 months |
| 8–9 years | 5 months |
| 10 years and above | 6 months |
An employee who has received notice of termination is also entitled, during the notice period, to reasonable leave of absence with full employment benefits to look for new employment.
Note: An employee who has reached the age of 67 shall not be entitled to more than one month's notice of termination and shall not have a preferential right to re-employment.
Severance Pay
There is no legal obligation to pay severance unless otherwise outlined in the employment contact/collective agreement.
Probationary Period
A contract for probationary employment of a limited duration may be entered into, provided that the probationary period does not exceed 6 months.
Where either party does not wish the employment to continue after the expiry of the probationary period, notification of such must be given to the other party not later than at the expiry of the probationary period.
Furthermore, unless otherwise agreed, probationary employment may also be terminated prior to the expiration of the probationary period.
Work Time Rules
Standard Working Hours
Standard working hours in Sweden are subject to a maximum of 40 hours per week. However, it may be possible to have an averaging arrangement if the nature of the work or working conditions so demand.
Under an averaging agreement, the average working hours calculated over up to 4 weeks should not exceed 40 hours per week.
Note: General regulations surrounding working hours and overtime compensation are stipulated under The Working Hours Act, but are subject to change depending on the collective agreements with the employee's trade union.
Break Period
Employees must generally be granted a rest break after working for 5 consecutive hours, the duration and frequency of which are regulated by the relevant collective bargaining agreement.
Moreover, employers are also obligated to provide breastfeeding employees the reasonable time to express their breastmilk for their newborn children.
Overtime
Employees required to work overtime must be paid at the overtime rate as regulated under the applicable collective agreement or individual contract. In any case, employees can only work overtime for up to 48 hour over a 4-week period, 50 hours per month or 200 hours per year.
Employers may also implement additional overtime hours, as follows:
| Extra overtime | Emergency overtime | |
|---|---|---|
| Overview | +150 hours of work per calendar year | Overtime may be taken for work to the extent that conditions require |
| Qualifying conditions | When there are special circumstances where no other solution can be found | When an unforeseen accident or natural event interrupts the business or causes imminent danger |
| Overtime limit | Extra overtime and general overtime together may not exceed 48 hour over a 4-week period or 50 hours per month | - |
Weekly Rest Days
Employees are entitled to a daily rest period of at least 11 consecutive hours between work days and to 36 hours of consecutive rest per week.
An employee shall be entitled to a compensatory rest period in the event that they have work on their weekly rest period due to special circumstances that could not have been foreseen, and such exceptions must be made on a temporary basis.
Holiday and Leave Entitlements
Public Holidays
Employees shall generally be entitled to time off on public holidays, though there are no rules outside of any existing collective agreement that regulate the pay for work performed during these holidays. There are 13 days of public holidays in Sweden for 2025.
| Holiday | Date |
|---|---|
| New Year's Day | January 1 |
| Epiphany | January 6 |
| Good Friday | April 18 |
| Easter Sunday | April 20 |
| Easter Monday | April 21 |
| Labor Day | May 1 |
| Ascension Day | May 29 |
| National Day | June 6 |
| Whit Sunday | June 8 |
| Midsummer Day | June 21 |
| All Saints' Day | November 1 |
| Christmas Day | December 25 |
| Boxing Day | December 26 |
Annual Leave
Employees who have completed a year of service are generally entitled to 25 days of paid annual leave, with the employer and employee having the right to agree to additional leave through individual or collective agreements.
The Swedish vacation year runs from April 1 to March 31, during which the employee's annual leave pay shall accrue.
Employees are entitled to a continuous 4-week leave between the months of of June and August of the year, and if the first year of employment begins after August 31, the employee shall only be entitled to 5 days of annual leave during their first vacation year.
The employee can roll over any unused leave in excess of 20 days for up to 5 years before they expire.
As for annual leave pay, on top of the employee's continued wage payments, those on annual leave shall also be entitled to the following annual leave premium:
| Annual leave premium | |
|---|---|
| Weekly-paid employees | 1.82% of weekly pay for each day of paid annual leave |
| Monthly-paid employees | 0.43% of monthly pay for each day of paid annual leave |
Note: Different regulations surrounding annual leave pay may apply depending on the collective agreements that apply.
Sick Leave
Employees are entitled to 14 calendar days of paid sick leave, though they may still be on unpaid leave should they remain unable to work. Sick pay constitutes 80% of the wages that the employee loses due to illness.
Employees reporting in sick must provide a written declaration stating that they are sick and how long they have been absent from work by the end of the sick pay period, and prove that their work capacity is impaired through medical certification if they are sick for more than a week.
The employee's eligibility for sick leave pay from their employers shall be determined as follows:
| When will the paid sick leave be conferred? | |
|---|---|
| Employed on a permanent basis or is to be employed for >1 month | First day of employment |
| To be employed for <1 month | After 14 days of work |
After the period of sick leave that is paid by the employer, the employee may be entitled to receive sickness benefit from Försäkringskassan instead of continued wage payments.
Additional resources: Sick employee days 1–90 | Sick employee from day 91
Maternity Leave
Employees are entitled to 7 weeks of pre-natal leave and 7 weeks of post-natal leave, totaling up to 14 weeks of maternity leave. This leave is integrated as part of their 480-day parental leave entitlement.
Employers are not required to pay their employees during maternity leave since their maternity benefits are to be covered by Försäkringskassan.
Paternity Leave
Employees are entitled to 10 days of paternity leave in connection with childbirth or adoption, which shall be seen as a separate leave from their 480-day parental leave entitlement.
Employers are not required to pay their employees during paternity leave since their paternity benefits are to be covered by Försäkringskassan.
Parental Leave
Employees are entitled to 480 days of parental leave when a child is born or adopted, which can be split between the parents or be taken by a single parent. That being said, each parent has 90 days reserved exclusively for them, with the remaining leave days being transferable between one another.
This leave period shall apply until the child turns 12 years old age or until they complete Year 5 of school. However, from the child's 4th birthday, the employee can only save 96 days in total.
Employers are not required to pay their employees during parental leave since their parental benefits are to be covered by Försäkringskassan.
Note: Special rules apply to those with multiple births, with them being entitled to more parental leave days.
Other Leave
| Leave | Paid/Unpaid | Duration | Note |
|---|---|---|---|
| Bereavement Leave | Paid | 10 days | Can be taken when there is a death of an immediate family member. |
| Business Leave | Unpaid | 6 months |
Can be taken for employees to start a business, provided that it does not compete with the employer's business. Employer can refuse the granting of this leave if doing so would result in significant operational inconvenience. |
| Educational Leave | Unpaid | - | Those who have been employed for at least 6 months, or for a total of at least 12 months during the preceding 2 years, can take this leave if the education has been approved and the teaching follows a particular course or curriculum. |
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