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Country Guides Sweden

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Sweden Payroll Guides

Overview

Sweden is known for its high living standards and organized society. Its capital city Stockholm is also the hub for major companies in different sectors including tech start-ups, finance and telecommunications conglomerates. Stretching over 438,576 km², Sweden is divided into 2 regions, 21 counties and 289 towns.

The Swedish population accounts for 1.9% of the European Union population. They are entitled to a social protection system which provides universal health care and education for everyone. In fact, Sweden ranks 8th among the countries worldwide with the highest per-capita income.

Sweden Payroll Facts

  • Population : 9.995 Million
  • Working Population : 5.095 Million
  • Currency : Swedish krona (SEK)
  • Minimum Wage : There is no statutory minimum wage in Sweden. Instead, minimum wages are often set by collective agreements, which means that different sectors may have different minimum wages.
  • Identity Number : Personal Identity Number
  • Number Of Pay Periods : 12
  • Main Languages : Swedish
  • Capital City : Stockholm
  • Big Mac Index : $5.84
  • Fun Fact : Over 50% of Sweden's energy comes from renewable energy sources.

Taxes

Tax year: January 1st – December 31st

 

Taxation in Sweden on salaries for an employee involves contributing to three different levels of government:

  • the municipality
  • The county council
  • The central government.

 

Social security contributions are paid to finance the social security system and the tax rate paid depends on the municipality where you are registered.

Income tax on salaries is deducted by the employer (a PAYE system) and paid directly by the employer to the Swedish Tax Agency.

Sweden has a taxation system for income from work that combines an income tax (paid by the employee) with social security contributions (employers’ contributions) that are paid by the employer.

The total salary cost for the employer is thereby the gross salary plus the social security contributions. The employer makes monthly preliminary deductions (PAYE) for income tax and also pays the social security contributions to the Swedish Tax Agency.

27% of taxpayer money in Sweden goes to education and healthcare, whereas 5% goes to the police and military, and 42% to social security.

Amounts up to 19700 SEK are not taxed, whereas governmental tax (20%) is added on amounts above 490700 SEK and 25% on amounts above 689300 SEK.

 

Healthcare & Benefits

 

The Swedish health care system is mainly government-funded and decentralized, although private health care also exists. The health care system in Sweden is financed primarily through taxes levied by county councils and municipalities.

71% percent of health care is funded through local taxation, and county councils have the right to collect income tax. The state finances the bulk of health care costs, with the patient paying a small nominal fee for examination. The state pays for approximately 97% of medical costs.

When a physician declares a patient to be ill for whatever reason (by signing a certificate of illness/unfitness), the patient is paid a percentage of their normal daily wage from the second day. For the first 14 days, the employer is required to pay this wage, and after that the state pays the wage until the patient is declared fit.

Expatriates

 

Non-residents working in Sweden for a Swedish employer or a foreign employer with a permanent establishment (PE) in Sweden are taxed a flat rate of 25% at source. The same rate applies when a pension is paid by a Swedish source to a person not tax-resident in Sweden.

Non-residents working in Sweden for a non-Swedish employer without a PE in Sweden are not taxed in Sweden, provided that the individual does not spend more than 183 days in Sweden in a 12-month period.

 

 

Work Leave & Holidays

 

Employees are entitled to 25 days of paid holidays per year. If an employment lasts up to three months, it may be agreed that the employee will not be entitled to any holidays. The employee will still, however, be entitled to holiday pay.

Sick leave: Generally, no wages or sick pay are paid for the first day of absence due to illness (qualification period). The employee is entitled to sick pay from the employer from day 2 to day 14 of each period of absence. The sick pay amounts to 80% of the employee’s salary. Employees must notify the employer immediately of their condition in order to receive sick pay.

Maternity leave: The Parental Leave Act (1995:584) stipulates parents’ right to leave. Both parents have an equal right to leave. The right to leave includes:

The right to full leave in connection with childbirth for female employees. This includes at least seven weeks before the calculated date of delivery and seven weeks after the delivery. A female employee is also entitled to leave for breast-feeding.

Full time off for a parent until the child is 18 months or, provided that the parent then has full parental benefits, for the time thereafter. It is possible to take out parental benefit up to and including the day the child turns 12 years old or when the child finishes form/grade 5 in compulsory school. However, after the child has turned four years old, it is only possible to save 96 days (parental benefit is paid out for 480 days in total).

Parents also have the right to shorten their working hours by up to a quarter of the normal hours until the child reaches the age of eight.

Paternity rights: Under the Social Insurance Code (2010:110), the father has a right to leave for ten working days in connection with childbirth. This right stretches 60 days from the child’s birth.

 

Sweden's National Holidays
1st January
New Years Day
6th January
Epiphany
Friday before Easter Sunday
Good Friday
Monday after Easter Sunday
Easter Monday
1st May
Labour Day
40 Days After Easter
Ascension Day
6th June
Swedish National Holiday
23rd June
Midsummer Eve
24th June
Midsummer Day
2nd November
All Saints Day
25th December
Christmas Day
26th December
St.Stephens Day
31st December
New Years Eve

 

To learn more about Swedish tax and payroll speak with one of the Immedis experts.

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