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Hiring in Sweden
Background checks in Sweden
Hire employees in Sweden
Language used in Sweden
Corporate presence requirements and payroll setup in Sweden
Easily hire employees in Sweden with our EoR solution
When you hire an employee in Sweden, you’re responsible for paying social security contributions on their salary, as well as withholding and paying taxes. Though it’s technically possible for a foreign employer to hire an employee in Sweden, in practice this usually involves setting up a company or registering a branch office in the country — which can be a long and expensive process. There is an alternative solution: hiring employees in Sweden through an employer of record.
An employer of record (EoR) is an organisation that hires employees on behalf of other organisations. When you work with an EoR, they’ll become the legal employer for your workers. That means they’ll be responsible for paying taxes and social security contributions and ensuring that all relevant labour laws are adhered to. However, you’ll still be in control of your day-to-day operations.
Using an employer of record in Sweden can simplify the process of hiring employees, allowing you to access Swedish talent without the hassle of setting up a legal entity. The EoR will be responsible for complying with Swedish labour laws as well as any collective agreements that apply to your workers. They’ll also handle certain administrative processes, like payroll and benefits administration, on your behalf.
Like all countries, Sweden’s labour laws are extensive and complex. Many employees are also covered by collective bargaining agreements, which impose additional rules and requirements on employers. Whether or not you choose to use an employer of record to hire employees in Sweden, it’s a good idea to have a clear understanding of the relevant laws, rules, and customs so you can ensure your operations are compliant. Read on for our full guide to hiring employees with or without an employer of record in Sweden.
Sweden is known for its high quality of life, strong social welfare system, and progressive attitudes. With a population of around 10 million people, Sweden is also a popular destination for businesses wanting to expand into Europe, thanks to its highly educated workforce, strong English proficiency, and stable economy. Here are some of the main things you’ll need to know before hiring in Sweden.
Swedish employment law is mostly set out in the Employment Protection Act (‘Lagen om Anställningsskydd’ or LAS). This is an important piece of legislation that includes provisions for things like notice periods, leave, overtime, and other working conditions.
A collective bargaining agreement (or collective agreement) is an agreement between a trade union and an employers’ organisation. They provide a framework of rules and regulations that employees in certain industries have to follow. In many cases, collective agreements provide more favourable conditions than the Employment Protection Act.
In Sweden, almost 90% of employees are covered by a collective agreement, so it’s crucial to understand what this looks like before hiring in Sweden. If an employer is bound by a collective agreement, they must apply it to all employees performing tasks that are relevant to the agreement, regardless of the employees’ union membership status.
Employers hiring in Sweden must comply with tax legislation, which includes withholding, paying, and reporting the relevant taxes from employees’ salaries. They also have to pay social security contributions, including contributions to the Swedish Social Insurance Agency (Försäkringskassan). This body provides financial support for Swedish citizens in the case of sickness, unemployment, disability, and maternity, among other things.
All companies hiring In Sweden are required to provide their employees with an employment contract. Technically, a contract can be agreed verbally, but employers must provide certain terms and conditions in writing. This includes key details like the names of both parties, the job title and salary, and the collective agreement that’s applicable (if any). In practice, it’s standard to provide all employees with written contracts.
If you’re considering hiring in Sweden, it’s important to thoroughly research how much this will cost your business. Not only are salaries high in Sweden compared to other European countries, but you’ll also have to take into account the cost of business registration, and potentially setting up a local legal entity. Working with an EoR can be a more cost-effective way of hiring in Sweden for foreign companies.
Conducting background checks on potential employees can help you figure out if they’re a good fit for your company. It also allows you to verify information candidates have given you to ensure it’s accurate. However, there are certain limits on background checks in Sweden, which employers should be aware of.
Generally speaking, background checks in Sweden are completely optional on the part of the employer. However, employers are responsible for ensuring that the people they hire have the right to work in Sweden. Swedish citizens and those from the EU, EEA, or Switzerland have the right to work in Sweden without a visa or work permit. If you hire an employee from a third country, you must ensure they have the appropriate work permit before hiring them.
Certain other types of background checks may also be required in Sweden depending on the role in question. For example, carrying out a criminal background check is mandatory for some roles, such as those involving working with children.
Here are some of the other types of background checks you could carry out on potential employees in Sweden:
Background checks in Sweden are limited by the rules set out in the GDPR regarding the processing of personal data. Employers always need a valid reason to carry out a check that’s related to the role in question. They should also get consent from the candidate before conducting any type of background check. Employers also can’t force applicants to provide information (for example, about their criminal or medical history). However, refusing to provide such information can be used to deny employment if it is necessary for the job.
If you want to hire employees in Sweden, it’s a good idea to think about the best hiring structure for your business. For example, if you need a worker on a stable and long-term basis to do work that’s related to your business’s core activity, it’s probably best to engage a full-time, permanent employee. In other situations, hiring an independent contractor or a temporary agency worker may be more suitable.
There are three main options when it comes to hiring workers in Sweden:
The main language used in Sweden is Swedish. There’s no statutory requirement for employment documents to be written in Swedish, as long as employees understand the terms of their contract. However, for the purposes of obtaining a work permit, documentation must be in either Swedish or English, or employers have to provide a translation.
There’s no specific requirement for workers to learn Swedish before moving to Sweden. There is also no language requirement to obtain a visa or work permit. However, the Swedish government recently published a proposal for a change to the law that would require applicants for permanent residency to show they have a sufficient level of Swedish language and cultural knowledge. This could come into force by 2027.
English is very widely spoken in Sweden, with recent data suggesting that almost 9 in 10 people in the country speak English. Sweden was ranked 6th in the world for English proficiency in the EF English Language Proficiency Index 2023.
Foreign companies can engage employees in Sweden as long as they complete the proper payroll registrations. There are also business, corporate, and tax considerations which must be kept in mind. In some cases, it may be necessary to set up a local legal entity.
Employers are required to pay social security charges for each of their employees in Sweden. This represents an additional cost of 31.42% of the employee’s gross salary. In addition, they must deduct personal taxes from their employees’ wages and remit them to the Swedish Tax Agency (Skatteverket).
Before they can pay employees in Sweden, foreign entities are required to register with the Swedish Tax Agency. This can be done through an online registration service. For companies with an entity in Sweden, this is usually done after registration with the Swedish Companies Registration Office (Bolagsverket).
It’s also possible for foreign companies to draw up an agreement with their employees to have them pay and report monthly contributions themselves. Contribution rates are slightly lower for foreign companies without a local entity. However, this solution likely won’t work if you have more than a handful of employees in Sweden.
Depending on the collective agreement that applies, employers in Sweden may be required to set up a supplementary pension fund or take out additional insurance for their employees. If this is the case for your business, you’ll need to register with a pension fund and/or an insurance provider prior to hiring employees.
There is no obligation to set up a local bank account in Sweden to pay employees, taxes, or social security contributions. However, you will need to do so if you want to set up a local entity.
Hiring employees in Sweden usually means setting up a legal entity, which can be costly and time-consuming. Employers can avoid this hassle by working with an Employer of Record (EoR), like CXC.
Through our EoR solution, you can confidently hire employees in Sweden, without worrying about compliance issues. We’ll handle everything from payroll to benefits to employment contracts on your behalf — so all you have to think about is finding the right person for the job.
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
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