Table of Contents

Sweden

Table of Contents

Currency

Swedish Krona (SEK)

Payroll Frequency

Monthly

Employer Taxes

31.43%

About Sweden

Sweden is a Scandinavian country located in Northern Europe along the Baltic Sea, bordering Norway and Finland. Formally neutral through the two world wars and the Cold War, it is part of the European Union but not the euro. The country has gently rolling lowland with mountainous terrain in the west, suitable for agriculture. The country has a small, open, and competitive economy, with extremely high living standards. With a typical Nordic welfare system, it provides universal healthcare and tertiary education for all its people. Sweden also ranks highly in numerous quality of life categories such as education, protection of civil rights, equality, and human development. Its economy is focused on exports with an emphasis on engineering, telecommunications, pharmaceuticals, and automotive industries.

About 15% of the county lies above the Arctic Circle, with most of its total land area covered by forests. Swedish is its official language with small minorities speaking Finnish, Sami, Romani, and Yiddish. The majority of Swedes are Lutherans with a culture focused on egalitarianism and humility.

Employment Relationship

• Permanent Employment

As per Sweden's Employment Protection Act, employment is usually for an indefinite term except as otherwise agreed. Employment contracts that are valid for an indefinite term can be terminated by the employer or the employee, with effect following a certain notice period. Such contracts can also include a probationary period of six months. During probation, contracts can be terminated without notice. 

• Fixed-Term or Specific-Purpose Contracts

A fixed-term contract may be concluded for specific fixed-term employment (project-driven or fixed duration employment), temporary substitute employment (cover for when an employee is on leave), seasonal employment, and when the employee has reached the age of 67. A fixed-term contract is allowed for a maximum of 12 months over a 5-year period. A fixed-term employee who is employed by the same employer for more than 12 months in five years is considered an indefinite term employee if the second term of employment began within six months of the last day of the previous employment period. The contract is not transformed into an indefinite term contract for employees who have reached 67 years of age. An employee employed for a fixed term and whose contract is not renewed when the employment ends must be notified by the employer not less than one month before the employment period's expiration.

• Temporary Employment Contratcs

Employees are allowed to hire temporary employees through a temporary staffing agency. A temporary work agency must guarantee the employees the same basic working and employment conditions as those of the employees directly hired by the user undertaking for the same job. The agency cannot prohibit a temporary worker from accepting a direct employment offer made by a user undertaking. The user undertaking must provide temporary workers access to collective facilities and amenities under the same conditions as workers employed directly by it.  The Employment Protection Act also allows a temporary substitute employment contract, a type of fixed-term contract concluded to substitute an absent employee.

Probationary Period

Probationary periods cannot be longer than six months. Provided that a two-week notice is provided, either party can terminate the employment relationship at any time and for any reason (except those discriminatory in nature) during the probationary period.  An employer may decide not to offer indefinite term employment to a worker on probation. In this case, during the probationary period, the employer must provide the employee with at least two weeks' notice of the intention not to continue employment on the probation's expiry. In the absence of such notice, upon expiry of the probation period, employment will be for an indefinite term.

Working Hours

In Sweden, the normal working hours of full-time employees are 40 hours per week. If due to the nature of the activity, an employee must be at the workplace waiting to carry-out work as needed, the employee may claim on-call time to a maximum of 48 hours over four weeks or 50 hours per calendar month. While Sweden does not have a specific legislation regarding remote working in place, the Work Environment Act states that employers are responsible for an employee's work environment even if they are working from home. Employers must do everything necessary to prevent the employee from being exposed to ill health or accidents. In addition to the statutory breaks, employees must be able to take shorter breaks that count towards working time.

Holidays / PTO

• Statutory Holidays

New Year’s Day (nyårsdagen): January 1, Epiphany (trettondedag): January 6, Good Friday (långfredagen): The Friday before Easter Sunday,Easter Sunday (påskdagen): The Sunday closest after the full moon that occurs on or closest after 21 March, Easter Monday (annandag påsk): The day after Easter Sunday, International Workers’ Day (första maj): May 1, Ascension Day ( Kristi himmelsfärdsdag): Sixth Thursday after Easter Sunday, Pentecost (pingstdagen): Seventh Sunday after Easter Sunday, National Day of Sweden (Sveriges nationaldag): June 6,Midsummer’s Day ( midsommardagen ): The Saturday during the period 20–26 June, All Saints’ Day ( alla helgons dag ): The Saturday during the period 31 October–6 November,Christmas Day ( juldagen ): 25 December, Boxing Day ( annandag jul ): 26 December.

• Paid Annual Leave

Employees are entitled to 25 days of paid annual leave per year, starting from the first year of employment. A worker has the right to carry over five days of annual leave per year for up to five years to take a longer holiday in a given year. Saturdays, Sundays, and public holidays are not counted towards annual leave days unless the employee usually works on weekends, and leave is shorter than five days. Annual leave pay depends on how an employee is compensated. For employees paid weekly or monthly, the same-pay rule applies with certain exceptions. The holiday supplement for weekly-paid employees is 1.82% of weekly pay. The holiday supplement for monthly-paid employees is 0.43% of monthly pay. If the employee has variable pay components, the holiday pay is 12% of the employee's aggregate variable pay that fell due during the annual leave year.

• Sick Leave

Employees who are absent from work due to sickness are entitled to sick pay for the first 14 days of sickness except for the first day, known as the "waiting day." The employer is required by law to pay sick pay to the employees during days two to 14 of illness. After two weeks, employees can apply for sickness benefits from the Swedish Social Insurance Agency (Försäkringskassan). The maximum benefit is SEK 1,027 (Swedish krona) per day. If an employee is on sick leave for more than a year, their benefits are reduced to 75% of the income. In case of serious illness, benefits continue to be 80% of the income.

• Maternity Leave

Female employees are entitled to full leave in connection with their child's birth during a continuous period of at least 7 weeks before the estimated time for delivery and seven weeks after the delivery. An employer is not under obligation to pay employees during maternity leave, in which case maternity benefits are covered by the Swedish Social Insurance Agency. Benefits are paid as 80% of income, up to a maximum of SEK 837 (Swedish krona) per day up to the eleventh day before the expected delivery date. Employees can also request to start the benefits 60 days before their estimated date of delivery if they cannot carry out the job and cannot be transferred to any other job. If the employer has banned an employee from continuing work due to risks in the work environment, she can receive pregnancy benefits from the day the ban applies.

• Paternity Leave

In Sweden, the non-pregnant partner can take a temporary leave of ten working days in connection with childbirth or adoption of a child under 10 years of age. The leave is doubled for twins and tripled for three kids, and so on. This leave can be used at any time during the first 90 days after childbirth or placement. Paternity leave is paid at 80% of the income. Payments come from the Swedish Social Insurance Agency. Employees can also choose to reduce their working hours, claim compensation for 25%, 50%, or 75% of their regular working hours, and increase the duration of leave from ten days to 20 days.

Termination of Employment

• Notice Period

The notice period for indefinite term employees is calculated as follows: Zero to two years of employment: one month's notice Two to four years of employment: two months' notice Four to six years of employment: three months' notice Six to eight years of employment: four months' notice Eight to ten years of employment: five months' notice More than ten years of employment: six months' notice Notice must be given in writing, given personally to the employee, and contain certain formalities (particularly, the reason for termination and how the employee should proceed if they wish to challenge the termination). In the case of fixed-term employment contracts, when the contract of an employee employed for at least 12 months in the last three years ends and will not be renewed, the employer must provide at least one month's notice before the contract's expiry. 

• Severance Benefits

Sweden has no statutory severance pay requirements relative to the termination of an employment contract. Severance pay is usually stipulated in individual employment contracts and collective agreements. The collective bargaining foundation, TRR Trygghetsrådet, assists employees whose employment has been terminated due to a shortage of work or illness. In this case, both the employer and employee must apply for benefits. Employees who are above 40 years of age and under 65 years, have worked for 5 consecutive years at a TRR-affiliated company, have a monthly salary of at least SEK 35,800 (Swedish krona), and permanently employed at the time of termination are eligible for severance pay (Avgångsersättning-AGE).   AGE provides 70% of the previous salary, including compensation from the unemployment insurance fund. AGE is payable from 6 months up to 18 months after cessation of employment, depending on the employee's age.