Sweden 9 min

Employee benefits in Sweden: a complete guide

Written by Francesco Cardi
November 20, 2023
Francesco Cardi

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There’s more to Sweden than Scandinavian charm and chilly winters. This country is becoming a hotspot for businesses hiring globally.

And for good reason.

It has some of the world’s happiest workers and a highly skilled professional workforce. Sweden also has been at the forefront of the global economy, and its workforce is no stranger to a remote lifestyle.

If you want to hire remote workers in Sweden, you need to understand the employee benefits Sweden requires. And the competitive benefits you can offer to attract and retain employees in one of the world’s most competitive labor markets.

Ready to learn more? Let’s dive in.

Who’s entitled to benefits in Sweden?

Swedish labor law separates workers into two categories: employees and independent contractors.

Most of Sweden’s regulations for benefits and entitlements apply only to employees. If someone is working for you permanently or full-time, they’re likely considered an employee. In that case, you’re required to provide certain Swedish benefits that are required under local legislation.

Independent contractors are workers that you hire on a project-by-project basis. And while you may not be legally required to do so, offering perks and benefits to contractors can help you keep talented professionals working with you as a result.

Companies trying to attract the most talented Swedish employees will almost always need to offer additional perks and benefits above the statutory minimum requirements. Those businesses that understand local market expectations and develop competitive, localized benefits programs can make their offer stand out to sought-after candidates. Value-based benefits like flexible working conditions are inexpensive options any business can use to attract and retain top performers.

Read our guide to hiring international independent contractors.

Required employee benefits in Sweden

With over 75% of their labor force fully employed, Sweden has the ninth-highest employment rate globally.

Such a competitive labor market means that foreign employers must provide a strong benefits package if they want to compete for talent.

If you’re looking to build a workforce of Swedish employees, it’s important to understand the following employment benefits that you must provide by law.

Swedish vacation time

The Swedish Annual Leave Act states that employees are entitled to a minimum of 25 days of vacation per year.

Specifically, that’s with benefits equivalent to 12% of their gross wages in the preceding year plus 0.43% of their monthly salary.

Employees on the job for three months or less may not qualify for annual vacation but will be entitled to vacation pay.

Employees can negotiate collectively for more days off.

Maternity and paternity leave in Sweden

Female employees are entitled to 14 weeks of maternity leave. That time is split between seven weeks before and seven weeks after delivery.

Fathers are entitled to 10 days of paternity leave within 60 days of the birth of a child.

Following maternity leave, both parents are entitled to 480 days of paid parental leave. For this leave, one partner can exercise up to 390 days with parental benefits paid by the Swedish Social Insurance Administration (Försäkringskassan).

Overtime

The Swedish Working Hours Act of 1982 states that regular working hours can’t exceed 40 per week. Any hours past this limit are considered overtime.

There’s a maximum limit of 50 overtime hours per month and 200 overtime hours per calendar year.

Overtime can be compensated with anywhere from a 50 to 100% bonus.

Health insurance in Sweden

The Swedish social security system covers benefits such as general pension, parental leave, and sick leave. It also covers healthcare.

Employers contribute to the National Insurance scheme through the social security fee, which equals 31.42% of the employee’s gross income.

The general rule is that if a wage element is to be taxed, a social security fee should also be calculated.

The employer files the PAYE return monthly and makes monthly payments to the tax account. The social security contribution is an employer’s cost, and the employee doesn’t add to it.

Sweden has a nationwide healthcare program that subsidizes costs for individual patients. Employers are required to issue sickness benefits starting on the second day up until the 14th day of an illness.

After 14 days of an illness, employees can apply for benefits from Försäkringskassan, the Swedish Social Insurance Agency. Benefits cover up to 80% of an employee’s normal wages.

Pension plans and retirement contributions

Swedish employer payroll contributions amount to 31.42% of an employee’s wages. That covers pensions, health insurance, occupational injury insurance, and parental benefits.

Download your Global Benefits Guide and attract top global talent

Remote's global HR experts share practical advice for building a locally relevant and globally compliant benefits program to help you attract and keep the world's best talent.

Modern global benefits guide download

Additional benefits to consider for Swedish employees

Sweden ranks seventh-highest globally in country happiness rankings. That’s in large part due to Swedish employees having safety nets and benefits as part of a normal career.

As such, you’ll need to offer more than the basics to stand out in one of the world’s most competitive labor markets.

Private and supplemental health insurance

Sweden’s public health insurance covers all employees. But private healthcare is an option for getting expedited access to medical care.

Supplementary private health insurance is by no means an expected benefit for employees looking for a job change. But this provision could help you stand out from competitors and keep top employees.

Other perks and benefits

Employers can look to provide extra provisions for Swedish employees.

But local taxation legislation should be factored into these decisions. The employer may compensate for expenses and provide benefits, but many of these are considered part of a taxable income for the employee.

Taxable benefits may include the following:

  • Company car or car allowances

  • Daily travel allowance (not to be compared with per diem)

  • Meals and expense vouchers

  • Private hotel stays and flights paid for by the company

  • Mobile phones

  • Life insurance

  • Dental insurance

  • Optical insurance

This doesn’t mean Swedish employees won’t appreciate these benefits. But you should consider the cost to your business versus the perceived value for the employee.

Here are some benefits that although not expected, are becoming more commonplace in Sweden:

  • Flexible working hours

  • Additional annual leave provisions

  • Unlimited paid time off policies

  • Remote work provisions

  • Mental health support benefits

These types of perks can be the difference between snagging a top-quality candidate and missing out to a competitor. These benefits don’t have to break the bank. Value-based rewards like flexible working hours and remote work provisions cost employers next to nothing, so a business of any size can use these benefits as a lure to attract and retain top Swedish talent.

link to What is the Modern Benefits Stack for 2022?

What is the Modern Benefits Stack for 2022?

A guide to the modern benefits stack and how you can implement the right benefits framework to create a culture of empowerment, trust, and belonging.

Wages and cost of living in Sweden

Of course, if you want to hire workers from a given country, you need to know more than just the benefits.

That’s why this section will cover average wages in Sweden. We’ll also cover the Swedish cost of living and how it compares to other countries.

What’s the minimum wage in Sweden?

Unlike many other countries, Sweden doesn’t have a federally mandated minimum wage. 

Instead, minimum wages are set through collective bargaining agreements between trade unions and Swedish companies.

These parties negotiate wage levels that are fair and reflect industry-specific conditions. This decentralized system allows for flexibility and tailored wages.

These agreements are based on skills, experience, and the market demand in each industry.

Due to this collective bargaining approach, average salaries in Sweden are generally higher than in many other countries.

What’s the average salary in Sweden?

By all standards, salaries are good in Sweden. Here are some statistics for 2023 wages in Sweden:

  • Average hourly wage: 188 SEK

  • Average monthly salary: 43,200 SEK

  • Average annual salary: 518,400 SEK

  • Typical annual salary range: 313,200-620,400 SEK

What’s the cost of living in Sweden?

Sweden’s higher average wages reflect the country’s higher cost of living.

Here are some statistics on the price of living in Sweden and how it compares to other countries:

Monthly cost of living (per person)

  • Sweden: $1,400

  • United Kingdom: $1,800

  • USA: $2,200

Monthly cost of living (per family)

  • Sweden: $3,000

  • United Kingdom: $4,400

  • USA: $5,000

Highest cost of living (ranked globally)

  • Sweden: 33rd

  • United Kingdom: 16th

  • USA: 5th

Creating a competitive and compliant global benefits package

Remember: it doesn’t matter how many additional perks you offer if you don’t include an internationally competitive salary. Without that, you’ll struggle to attract top-quality global talent.

As a rule of thumb, set a benchmark to pay your employees a salary that competes with the global industry average wherever you’re hiring.

Next, create a strategy that’ll help you offer competitive benefits to international talent.

One of the best ways to do this is by offering highly sought-out “value-based” benefits. These benefits are intangible rewards or motivators for your workforce.

Common examples of soft benefits are:

  • The ability to work from home

  • The ability to decide work schedule

  • The ability to be recognized and appreciated

  • The ability to volunteer for charitable causes

With the huge shift to remote and hybrid work, more employees are growing to expect certain soft benefits. And offering these perks gives you an edge in a global labor market.

In today’s world, doing the bare minimum for your employees won’t cut it any longer.

Remote helps you get proactive with perks and benefits for your global team. That way, you can hire and retain the best workers from across the globe.

Here are some more resources on offering the best salary and benefits package:

link to How to hire and pay remote workers in Sweden
Sweden
9 min

How to hire and pay remote workers in Sweden

This detailed, step-by-step guide walks you through the safest, simplest, and most scalable way to hire and pay remote workers in Sweden.

Why hire remote workers in Sweden?

There are a lot of advantages to adding remote workers in Sweden to your team.

Highly skilled workforce

Sweden boasts a highly educated and skilled workforce.

The country’s strong emphasis on education and vocational training means that its remote workers have the expertise and skills required for various roles.

Whether you need specialized technical skills, creative talent, or proficiency, Sweden has you covered. Sweden offers a pool of qualified individuals in IT, engineering, design, finance, and more.

English proficiency

Communication is key when working with remote teams.

Fortunately, English proficiency is widespread in Sweden. Most adults in Sweden can speak English fluently, despite it not being an official language in the country.

That means fewer language barriers and seamless collaboration when hiring workers in Sweden.

Innovation

Sweden is known for its innovation-driven economy and technological advancements.

Here are a few examples:

  • The world’s biggest streaming platform, Spotify, was born there.

  • The world’s best-selling video game of all time, Minecraft, came from there.

  • The world’s largest furniture retailer, IKEA, originated there.

Hiring remote workers from Sweden can bring fresh perspectives, innovative ideas, and expertise in cutting-edge technologies.

This infusion of talent and knowledge can give businesses a competitive edge and fuel their growth in an increasingly digital and globalized marketplace.

How to set up and manage benefits for international employees

Whether you’re hiring a graphic designer from Sweden or a software engineer from Silicon Valley, you need to understand how benefits work in each local market to stay compliant and attract the best talent.

More importantly, you need a global employment partner to automate all the time-consuming manual work and manage the complicated compliance requirements.

That way, you can focus on growing your business.

And that’s why we built Remote. By partnering with Remote as your global employer of record (EOR), you can scale your team across borders without worrying about any of the headaches.

Why should you use an EOR?

An EOR can help you streamline and scale global growth right away.

Remote takes care of the difficult tasks involved with hiring across borders, including:

  • Eliminating paperwork and manual HR tasks

  • Managing contracts and handling onboarding requirements

  • Collecting all of your employment data and documentation in one simple hub

  • Handling termination and severance requirements

  • Avoiding expensive compliance fines

Remote’s EOR service provides you with dedicated local employment experts who can offer the insight you need. With that insight, you can create a competitive benefits package in Sweden and other global markets.

The partnership will also give you the foundation to develop compliant employment contracts and HR processes at scale.

The bottom line: an EOR can dramatically minimize your risk when you hire in other countries like Sweden. You’ll be set up to do the following:

  • Create a strong global benefits package.

  • Manage the delivery of benefits in compliance with all local labor laws.

  • Terminate an employee in compliance with local employment regulations.

  • Protect any IP and patents produced by your remote employees.

Add global talent to your team with Remote

An EOR like Remote manages the complicated parts of international employment so your team can focus on the most important strategic requirements of growing your business.

Whether it’s the employee benefits Sweden requires, or keeping you compliant when hiring all across the world, we’ve got you covered. Remote gives you one comprehensive global HR platform to simply hire, pay, and manage employees and contractors all over the world. You get a true expert partner and a platform that hiring globally feel just like hiring locally.

Hire and pay your global team with maximum speed and safety

Start onboarding employees and contractors in minutes with Remote, G2’s top-ranked multi-country payroll software.

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