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The Swedish labour market

Each labour market has some peculiarities. It may be tricky for foreigners to fully understand the payment methods, taxes, and other benefits related to them. In TalentUp, we are starting a series of different blog articles, one for each country. This article analyses the Swedish labour market.

Even if the national currency is the Swedish Krona (SEK), the whole article is in EUR to compare easily across countries and exchange rates.

General data about the Swedish labour market

Sweden’s minimum wage and maximum working hours disclosure. Data for January 2024. Source: ​​https://www.papayaglobal.com/countrypedia/country/sweden/

Payroll taxes in Sweden

Social security contributions are made by the employer and the employee and are used for funding unemployment, pension, maternity/paternity leave, and sickness or injury.

Share of contingencies applied to the gross salary. Data source: https://www.papayaglobal.com/countrypedia/country/sweden/

There is also a burial fee (paid by people registered in Sweden on November 1st, the year before the income year), but it varies.

Once contributions are paid, employees need to pay an income tax that varies depending on their gross salaries. 

Contingencies from self-employees

Employees contribution to social security is the same as that paid by employers. Having said that, the self-employed pay only 0.1% as a labour market fee (instead of 2.65) and 3.64% as a health insurance contribution (instead of 3.55). This means that, in total, the self-employed contribute 28.97% and employers contribute 31.42%.

Example of net salary in Sweden

As a reference, we use the average salary of a software engineer. In Sweden, on average, software engineers earn 53,600€ annually.

From gross to net salary of a software engineer in Sweden.

The employer contributes 16,841.12€ to social security, and the employee contributes 3,752€.

After paying the income tax, the employee has a net salary of 49,400.92€, coming from a gross salary of 53,600€. 

Unemployment regulation in Sweden

For employees without a collective agreement, the notice period is dependent on the employee’s serenity, as follows:

Notice periods in Swedish contracts. Data source: https://www.papayaglobal.com/countrypedia/country/sweden/

Severance is not mandatory in Sweden. The probationary period can last a maximum of six months. 

Different kinds of leaves in Sweden

Annual paid leave goes from 25 to 30 days. Once accrued, vacation days can be held for up to five years.

They have 13 public holidays. Public holidays that fall on the weekend are usually lost.

The first day of sickness is unpaid. The employer pays paid sick leave at a rate of 75% to 80% from the second to the fourteenth day. Social Security is responsible for paying it after that.

Paid parental leave

Maternity leave consists of 14 weeks: 7 before and 7 after birth. In Sweden, fathers are entitled to 10 days of paid paternity leave.

Parental leave consists of 480 days, or a reduction in working hours for the first 8 years after birth.

Other common Swedish benefits

Top 5 benefits offered by Swedish companies. Datasource: TalentUp’s database.

How to employ a Swedish worker

Businesses need to be registered for tax and protect their business name by registering it.