Employer of Record Sweden
Infotree Global Solutions help companies to achieve potential growth globally by providing global payroll and Employer of record services in the country where it wants to expand. Setting up a business in a foreign country like Sweden can be challenging but with Infotree global you don’t have to worry about a thing. As your Sweden Employer of record, we take responsibility for all formal employment duties so that you can focus on your business development without being concerned about the legal hassles.
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Hiring in Sweden
The hiring process in Sweden is quite seamless. Just like the regular process, it starts with initially selecting candidates from a pool of qualified and skilled people, assessing their abilities, and finally shortlisting the most suitable ones for the respective positions. However, this entire hiring process stands out from the rest of the countries in terms of the working structure. Since there is no mandatory labor code for employment regulation in Sweden, the working conditions are decided based on mutual agreement between employers and employees. It makes the recruitment process relatively less regulated yet more flexible to practice.
Considering the pool of young talent and growing opportunities in the country, the existing working regulations in the hiring industry are quite liberal. The basic labor laws and policies in Sweden are known for their effectiveness. This makes it much easier for both employers and employees to participate and sustain in the hiring process. There is also no minimum wage requirement, and so, employers can set the working terms and conditions as per their mutual agreement with the prospective employees. Overall, Sweden is a great place to kickstart your career as an employee or hire the best talent for your organization.
An employment contract is a descriptive agreement between an employee and employer to state the employment type, job roles, compensation details, etc., after aligning with local laws and regulations. Such compliance in Sweden makes it compulsory for employers to learn the compensation details and termination requirements in Sweden. As it is challenging to pay attention to each detail, one can also adopt the solution of reaching the best employer of record in Sweden. Then, the firm can effectively handle the same and unwind your all stress.
Working hours – In Sweden, the typical day lasts eight hours with 40 hours per week maximum. The working hours are determined by collective agreements. Workers are entitled to a minimum of 11 hours of rest between workdays and at least 36 hours of rest each week. Employees should be given break after five consecutive hours at work. Work hours should not exceed 48 hours in a particular week or 50 hours in a month. As per the employment rules, maximum overtime of 200 hours is allowed per calendar year. The employee is entitled to 50-100% more rate than the normal wage in overtime. It is also exchangeable for additional holidays for free time during the working day.
Compensation – There is no statutory minimum wage defined in Sweden. Based on job type and industry, labor unions negotiate minimum wages for employees. Collective bargaining agreements are common in the Swedish labor market and regulate the relationship between employers and employees. Employers work with trade unions and follow the structure of Collective Bargaining Agreements (CBAs). Employers can negotiate a salary in the employment contract for employees not covered under labor unions.
Probationary Period – The probationary period in Sweden lasts for a maximum of six months. It is the time when an employer can evaluate the alignment of employees’ capabilities with the company and also can terminate the employee without any notice.
Termination and Severance – Employer of Record Sweden assists employers in easily handling the termination of those employees showing unsatisfactory performance or due to their redundancy or some business necessity. Employers can terminate the employee with a notice period ranging from 1 month to 6 months depending on the length of employment. An employer must inform the employee and the local trade union of which employee is a member in Sweden.
In Sweden, the Employment Protection Act and Collective Bargaining Agreements (CBAs) determine laid-off employees’ termination and severance criteria. Employee termination in Sweden should be legitimate. In case of wrongful dismissal, the employee can sue the employer for reinstatement. If the employer refuses employee reinstatement then the employer has to bear damages ranging from 16 to 32 months’ salary.
As your Swedish employer of record, we provide legal guidance to handle an unforeseen event of employee termination and ensure you do not get into any legal hassle.
Bonus – A bonus is an extra amount entitled to an employee above the minimum wage. Sweden’s employer of record defines it effectively after considering all the local authorities, trends, and regulations.
There are some common types of bonuses in Sweden from which employers choose according to their convenience, employee’s position, and more. They include spot bonuses given on a merit basis, a 13th-month salary depending on the legal requirement, a holiday bonus or Christmas bonus with differing amounts from employee to employee and a one-time signing bonus given at the beginning of employment. Some others are retention bonuses for dissatisfied employees, referral bonuses as a monetary gift, vacation bonus, profit-sharing, and commission as a reward for sales quota.
If the employment contract includes a bonus quota that is customary and legal in the country, you will get a competitive edge in the market. Therefore, it is vital to consider Sweden’s employer of record for 360° accuracy.
As Sweden focuses more on employee betterment from all aspects, employers need to take care of their compensation and benefits details while their expansion to Sweden. The assistance of the employer of record for this course can be the perfect step. You not only pass your responsibility to the firm for understanding the compensation guide of minimum wages, benefits, and bonuses but also all tiny details required to include in the agreement. You need not worry about complying with Sweden laws anymore if your expansion is handled by Sweden’s employer of record.
Maternity leaves – The parents in Sweden are jointly entitled to a parental leave of 480 days when the child is born or adopted, and they can take it until the child gets 18 months old. Each parent is entitled to 240 of these days. It’s advised that each parent must take 90 days off, otherwise, they can share among themselves with one parent take a maximum of 390 days. A Pregnant employee can take a minimum of 7 weeks of leave before the expected delivery date and 7 weeks after the birth of the child. The mother is entitled to a paid leave from 60 days before the expected delivery date until the child turns 12 years old. For the first 195 days, parents on leave are entitled to receive 80% of their salary and SEK 180 per day for the remaining 45 days. The Swedish Social Insurance Agency (Försäkringskassan) is responsible for this payment. Till the child turns eight parents are entitled to reduce their hours of working y 25%.
Vacation – Employees in Sweden are entitled to enjoy 25 full days of vacation every year. The additional number of vacation days depends on collective agreements or your contract of employment. If employment starts after 31st August, only 5 full days of vacation are allowed until 1st April. Usually, annual vacation days are allotted on the 1st of April every year. An employee needs to earn a right for vacation pay during the qualifying year. A year after this is referred to as a vacation year, which runs from 1 April until 31 March. Vacation pay consists of a monthly salary, a fixed salary add-on, and a daily vacation pay premium. If an employee doesn’t qualify for vacation pay, he is still entitled to an annual vacation.
Under the Annual leave act, the vacation period is June-August. However, employers decide when an employee can take vacation according to their specific industry. Also, an employer must notify you 2 months before the start of vacation. Employees have the right to roll over up to 5 vacation days during a period of 5 years if they have annual vacations of 20 days or more. They also have the right to receive vacation pay for all the unused vacation days, if their employment ends.
Sick leave – As per sick leave, the paid days start from the second day and follow two weeks with an ensured salary at the rate of 80% by the employer. After two weeks of illness, it needs to be reported to the Swedish Social Insurance office known as Försäkringkassan, which takes care of sickness benefits to the employee. Only employees with Swedish person numbers are entitled to receive sickness benefits. In case of employee absence due to illness exceeding 7 days, a doctor certificate is required. In Sweden, employees can not be terminated on grounds of illness.
Health Benefits – All residents in Sweden are offered universal healthcare with automatic enrollment. Healthcare in Sweden is funded via income taxes and other regional taxes. Healthcare benefits are not only limited to Swedish citizens, however, the residents of the European Union, European Economic Area countries, and countries with a bilateral agreement with Sweden are also entitled to receive emergency coverage.
Most employers purchase private Health Insurance to provide supplementary coverage to the employees. It is an alternative to public health insurance to avoid delays. They ensure quick access to any ambulatory care service.
As your employer of record in Sweden, we assist you in identifying the best and the most cost-effective insurance coverage for your employees and their dependents.
Pension Benefits – In Sweden, anyone who has lived or worked is entitled to receive a public pension. It is contributed through payroll and is calculated on the taxable income. At the age of 65, employees get legal retirement which is followed by their pension plan. Employers are required to contribute 31.42% of their gross payroll to the pension and health insurance for employees having a salary of 1,000 krona or more annually. The pension plan also includes the employee’s contribution of 7% of the salary.
Payroll Tax in Sweden
Swedish Social Insurance demands employers’ contribution on behalf of their workers. Social insurance tax includes the coverage of any disability, sickness, retirement, and more. The contribution range is usually 31.42% of gross salary but it is just over 21% for foreign employees. Other taxes include corporate tax at a 20.60% rate and personal income tax at a 52.90% rate. The sales tax rate in Sweden is 25% and the social security rate is 38.42%.
Employees pay municipal tax at the rate of 29.19% and 34.70% of the taxable income and the national tax ranges between 20-25% if the salary is more than SEK 523,200. These taxes are deducted from the salary by the employers.
Thus, the timely, compliant, and accurate payroll administration in Sweden demands complete understanding. So, we are here as your Sweden employer of record for a complete solution with in-country expertise.
Infotree Global Solutions takes care of all aspects of payroll and taxes for employees as your Swedish Employer of Record, including taxes, withholding, social security payments, or any other statutory requirements for your company.
Employment Laws in Sweden
Swedish employment laws cover various areas such as minimum wage, working hours, overtime rules, and rates. The weekly working hours in Sweden are set to be 40 and overtime is paid 100-150% more than the normal salary. Employers must provide a written employment contract mentioning the compensation details, bonuses, and termination requirements within a month.
Employment laws in Sweden are regulated by CBAs with trade unions. They are also included in the Employment Protection Act. Also, the Co-Determination Act stipulates provisions regarding the rights to negotiations, association, information, labor market stability obligations, and industrial actions.
In case of employee termination, there must be an objective ground like redundancy. Moreover, according to extensive legislation of Sweden, an employer should have some information and consultation obligations with trade unions. They must ensure the health and safety of employees in the workplace. Thus, the entire documentation makes the expansion challenging, if it is performed without the employer of record Sweden.
Challenges when Expanding into Sweden
Sweden is a sophisticated country with hi-tech capitalism. If you are considering expanding into it for hiring your employees, you need to prepare to handle some challenges. First of all, understanding the complex labor laws of Sweden is a challenging process, which can only be simplified through local expertise.
Businesses face restrictions in understanding the local structure, allowances details, compensation guide, paid leaves, etc. Swedish laws have many legal entities to ensure their citizens have all rights for safety, economy, and all. All employees are registered with the trade unions according to which employers have to perform their pre and post-hiring actions. Therefore, some businesses end up with a solution of setting up their local subsidiaries in Sweden, which further extends the challenges to greater efforts and high costs.
However, these challenges remain no more if you access the reliable employer of record for the course of action. They perform all the actions required to keep you up with your top professionals with no expensive claims. Challenges like the alignment with several labor laws established by the Central Government and various states get simplified with the wide knowledge base of experts. Overall, you find it easy to tackle the daunting activities of compensation maintenance, onboarding delays, and payroll complexities.
Benefits of Employer of Record Sweden
To simplify your expansion process let Infotree Global assist you to deal with all the complexities. Be it hiring employees or distributing payroll or taking care of expenses, we are there to assist you at every step. Partner with us and start your global business without worries.
Market Access – Relying on the professional expertise of an Employer of Record is the best way to enter an unknown market quickly. By using Employer of Record services, an international organization can avail the expertise of Sweden employees to work for its company. Besides quick access to the Swedish market, the EOR also enables the client to ease off worries related to payroll and HR.
In Country Laws – It is hard to ignore the importance of regulations and compliance in a foreign country. If you are operating a business in Sweden you need to be well aware of the payroll and taxation rules. With Sweden Employer of Record services, a company can hire a foreign individual or local employees and deal with the complexities of the country’s rules. Be it income tax, social security contribution, expanse management, withholding charges, or business tax, an EOR company takes care of it all with total compliance.
Diverse Solutions – No matter whether you already have a company in an international location or you are going to establish the one, an employer of record can help you significantly. The EOR Company can hire staff on your behalf without having the need of setting up a branch in Sweden. If your company is already operating, using EOR for managing payroll tasks can be a great idea as they can present an effective solution to tax and accounting responsibilities in the country.
Why Infotree Global Solutions?
Infotree Global is dedicated to providing professional assistance to help you set up business in Sweden. We provide the support of our in-country team of professionals to undertake all the legal formalities associated with employment in Sweden and help you stay compliant with country labor laws. Owing to our rich industry experience, we help you hire the most talented individuals for your company and embrace all the payroll-related jobs. Thus, we help you save time without worrying about legal hassles so that you can stay focused on your expansion endeavors. With our global payroll and employer of record solutions, you can experience professional assistance at every step and expand your business without worrying about legal complexities.