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Minimum wage in Sweden
Payroll in Sweden
Statutory benefits in Sweden
Other employee benefits in Sweden
Compliant, seamless payroll and benefits in Sweden and beyond
Payroll and benefits in Sweden
As in all countries, there are specific rules and regulations that apply to payroll in Sweden. Employers must follow a set process to pay employees, withhold taxes and social security charges, and remit them to the relevant authorities. There are also requirements for providing payslips to employees and keeping payroll records on file.
Companies wanting to hire workers in Sweden also need to know about the various statutory benefits that employees are entitled to, which are either provided directly by the employer or through the country’s social security system. In this section, we’ll explore everything you need to know about payroll in Sweden, as well as the mandatory and optional benefits you could offer to your employees.
Minimum wage in Sweden
There is no national minimum wage in Sweden. Instead, minimum wages are set by collective bargaining agreements reached between trade unions and employers’ organisations. In Sweden, more than 90% of employees are covered by a collective agreement.
Minimum wages in Sweden vary by industry and job function, but they are generally considered to be quite high. For example, in 2024, the minimum starting salary for an adult without education amounts to:
- SEK 25,006 (EUR 2,205) per month in the hotel and restaurant industry
- SEK 25,243 (EUR 2,227) per month in retail
- SEK 28,225 (EUR 2,2490) per month in warehouses
This situation is unusual in the EU, where only four other member states don’t have a national minimum wage. However, these include two of Sweden’s closest neighbours, Finland and Denmark.
What counts towards the minimum wage in Sweden?
Although there is no national minimum wage in Sweden, there are minimum wage requirements for specific jobs and industries, which are set by collective bargaining agreements. Generally, these are specified as either a monthly salary for full-time employees or an hourly wage. In Sweden, minimum wage calculations typically don’t include bonuses or holiday pay. Employers are permitted to make deductions from their employees’ pay in some circumstances, such as when they provide food or accommodation.
Minimum wage in Sweden for international students
Again, there is no legal minimum wage that applies nationally in Sweden. International students working in Sweden must be paid at least the minimum wage stipulated by the collective agreement that applies to them.
Payroll in Sweden
Every country in the world has its own rules, requirements, and customs when it comes to running payroll. In Sweden, payroll rules are set by both labour laws and collective agreements. There are also some different regulations for foreign employers hiring Swedish talent.
The basics of payroll in Sweden
The payroll cycle in Sweden is typically monthly, and employees are usually paid on the 25th of each month. Employers must provide their employees with a payslip, which can be in either digital or paper form. They must also keep payroll records for at least seven years. The tax year in Sweden is the same as the calendar year, and the local currency is the Swedish Krona (SEK).
Social security contributions in Sweden
Social security contributions are an important part of payroll in Sweden. Employers are required to pay social security contributions amounting to 31.42% of each employee’s gross salary and benefits. This pays for things like health insurance, pensions, work injury insurance, and disability insurance.
Foreign employers must either register with the Swedish Social Security Agency or enter into an agreement with an employee where the employee makes contributions on behalf of the employer. The contribution rate may be slightly different in this case.
In theory, employees also pay into the social security system through a pension fee of 7% of their gross income up to SEK 599,250. However, this is usually 100% tax creditable, which means the amount paid is effectively zero.
Income tax in Sweden
There are two different levels of income tax in Sweden: municipal tax and national tax. Municipal income tax is paid at a rate of around 32%, though this varies by municipality. National income tax is paid at a flat rate of 20% on income above a threshold of SEK 598,500 (EUR 52,774).
Employers running payroll in Sweden must withhold preliminary income tax from their employees’ pay each month and remit it to the tax authorities by the 12th of the following month. They must also submit a monthly report on each employee’s income, either online or via a paper form.
Employees are then responsible for declaring and paying any additional tax they owe. They are taxed on all income, though non-residents only pay tax on income sourced in Sweden. The tax rate for non-residents is a flat 25%. Sweden also has a special tax regime for foreign experts working in the country, who can benefit from a tax exemption of 25% for five years as long as certain conditions are met.
13th salary in Sweden
Unlike in some other European countries, the 13th salary payment is not mandatory in Sweden. Employers can choose to provide performance-based or company-wide bonuses at their discretion.
Other requirements for running payroll in Sweden
Employers in Sweden are free to pay their employees in either Swedish Krona or another currency. There is no specific obligation to open a local bank account to run payroll in Sweden. However, foreign companies setting up an entity in Sweden will need to open a local bank account.
Statutory benefits in Sweden
Like all countries, Swedish labour law mandates certain statutory employee benefits, which employers are required to provide. In Sweden, many benefits are not provided by the employer directly but paid for through the social security system.
Social security in Sweden
Many employee benefits in Sweden are handled through various government entities, which are funded through the social security system. These include:
- Parental benefits: Employees can access pay while they are on parental leave after having a child. Temporary parental benefits also allow employees to take time off work to take care of a sick child.
- Unemployment benefits: Employees can receive benefits through social security while they are out of work and looking for a new job.
- Sick pay: After the 14th day of sickness, employees are paid through the social security system. The amount they can get depends on their income and length of sickness.
- Retirement pensions: Employees in Sweden can access a pension based on their total earned income when they retire. The retirement age in Sweden is currently 65.
Mandatory employer-provided benefits in Sweden
There are also certain benefits that employers in Sweden have to provide to their employees directly. For example, employees are entitled to:
- Annual leave: Employees in Sweden are entitled to at least 25 days of paid holiday per year. Collective agreements may stipulate a more generous holiday entitlement.
- Holiday bonus: Employees are also entitled to a holiday supplement or bonus of 1.85% (if they are paid weekly) or 0.43% (if they are paid monthly), in addition to their regular pay.
- Overtime: Under the Swedish Working Hours Act, employees should not work more than 40 hours per week. Any time worked above this threshold must be compensated as overtime. Overtime pay rates are set by collective agreements.
- Parental leave: Both male and female employees in Sweden are entitled to generous parental leave when they have a baby. During their leave, they can apply for the parental benefit through the social security system.
- Sick leave: Employers are also required to grant their employees sick leave if they are unable to work. They must pay them at a rate of at least 80% of their normal salary for the first 14 days. After this point, employees can get sick pay through social security.
While the above are general requirements for all employees in Sweden, collective bargaining agreements may provide for additional benefits, or make some of the benefits above more generous. For example, some collective agreements may grant employees additional paid holidays on top of the statutory 25-day minimum.
Other employee benefits in Sweden
Employers in Sweden can also choose to provide their employees with additional benefits, even if they’re not required by law. This can be a valuable way of attracting and retaining talent in Sweden. Below, we’ll list some of the most common additional employee benefits in Sweden that you could consider offering to your employees.
Extra paid holidays
One of the most popular employee benefits in Sweden is paid time off in addition to the statutory minimum of 25 days. Providing extra time off work can help employees improve their work-life balance, which is extremely important to employees in Sweden.
Additional health insurance
Sweden has a nationwide healthcare program that subsidises the cost of care for individual patients. However, some employees choose to offer private health insurance to help their employees get faster access to medical care. While this isn’t necessarily an expected employee benefit in Sweden, it could help you to stand out from competitors.
Additional pension contributions
Similarly, while all employees in Sweden have access to a national pension when they retire, paying into a supplementary pension on behalf of your employees can be a valuable benefit.
Other perks and benefits
There are many other perks and benefits you could offer to your Swedish employees, including:
- Company car or travel allowance
- Meals and expense vouchers
- Mobile phones
- Dental insurance
- Optical insurance
- Life insurance
- Flexible working hours
- Remote work
- Mental health support
Compliant, seamless payroll and benefits in Sweden and beyond
Getting payroll and benefits right is not just a legal issue. Every country also has its own customs, norms and expectations about employee compensation. And if your operations aren’t in line with your workers’ expectations, they may not stick around for long.
Thankfully, we know what we’re doing. When you work with CXC to engage workers in Sweden, we’ll handle everything from tax withholding to employee bonuses on your behalf.
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