So you want to hire in Sweden. That’s great. But you should know that hiring in Sweden is different from hiring in your home country. There’s a whole laundry list of labor laws to catch up on, lawyers to contract, compliance issues to navigate… And it can get complex. So we’ll break it down in simple terms.
If you want to successfully hire in
Sweden
, you have two options:
Laws about hiring contractors are significantly more simple in
Sweden
. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Panther for.
This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in
Sweden
is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.
Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in
Sweden
.
Hiring employees takes months, at the minimum. When you hire with Panther’s locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It costs just $0 to sign up for Panther, then $49 per month to hire your contractors with Panther. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
Hiring contractors in
Sweden
means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.
Hiring employees is a bigger commitment, and generally puts you at a bigger risk for legal fees. When you hire contractors overseas, your biggest risk is misclassification—but even then, misclassification penalties are often minimal and just require you to pay off any compensation that the person would have been owed as an employee.
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
If you’re hiring contractors in
Sweden
, you can pay them with Panther in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Sweden than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Sweden.
Employees are entitled to 25 days of paid vacation each year after one year of work at the company. Once accrued, vacation days can be held for up to five years.
Vacation pay accounts for 12% of an employee's gross annual salary.
There are 13 public holidays in Sweden.
An employer is responsible for paying 80% of an employee’s salary for the first 14 days of sick leave.
After 14 days employers report to the Swedish Social Insurance Office, and the employee applies for the benefits. Social insurance pays for sick leave starting on day fifteen.
Mothers receive 240 days of paid leave with the right to start 60 days before the expected birth.
Fathers are entitled to 240 days of paid leave.
Swedish parents are entitled to 480 days of paid parental leave with each parent having an exclusive right to 90 of those days. Leave shouldn’t be taken at the same time, except for the first 10 days following the birth. Single parents are given the full 480 days.
10 days
The employer must have a valid reason to terminate an employee.
Before termination, an employer must try to find the employee a different role in the company before terminating the employee.
For companies with more than five employees, employers are obligated to notify the Employment Service. Companies are also obligated to negotiate with trade unions if relevant.
After negotiations, the employer must provide a termination notice in writing and in person. If this is not possible then a registered letter may be sent to the employee’s address.
Notice periods in Sweden are determined by employment contracts, collective agreements, or by the Employment Protection Act.
Employers:
With a collective agreement – Notice periods should be agreed upon between employer and employee and stated in the employment contract. The most common notice period is one month.
Without a collective agreement –
Employers may dismiss employees without notice if they have grossly misbehaved.
Employees:
With a collective agreement – Notice periods should be agreed upon between employer and employee and stated in the employment contract. The most common notice period is one month.
Without a collective agreement – According to the Employment Protection act notice period is one month.
Companies have no obligation to pay any severance pay but it may be included in an employment agreement.
Full time employment is considered 40 hours weekly. Workers are entitled a break after 5 consecutive hours of work, and an 11 hour break for every 24 hour period.
Overtime should not exceed 48 hours over a four-week period, 50 hours per month, or 200 annual hours. Overtime rules should be in a collective agreement or employee contract, and typically compensated with pay or leave. For overtime worked before 8pm on weekdays, overtime allowance is the monthly salary divided into 94 for each hour. For overtime worked after 8pm or weekends, allowance is the monthly salary divided into 72 for each hour. Employees who are excluded from overtime pay include, employees who hold managerial or comparable positions, those who organize their own working time.
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