Sweden Payroll Solutions

Contractors in Sweden can be set up in 2 ways, Employed and Self Employed.

The employed solution is the preferred model for Sweden. The use of self-employment is allowed if genuine.

A self-employed contractor will be registered for F-tax; they do not have an obligation to perform work personally (i.e.
can send a substitute) and are not subject to specific orders or control as to where, when or how the work is to be
performed; they are not limited in their ability to engage with other clients and get paid for work results/delivery, not a
fixed amount that is paid irrespective of success of the services provided. The overall engagement will be considered, so even if ‘some of these boxes are ticked’, the authorities could still conclude there is an employment relationship between the parties, so this type of engagement should be considered very carefully.

Tax year – The tax year is the calendar year for individuals

Immigration – Nationals of the EU/EEA can live and work in Sweden but must register with the Migration Board within
three months of entering the country and provide a certificate of employment issued by their employer. Nationals of
Switzerland must apply for a residence permit. Nationals of the other Nordic countries do not require a registration or
residence permit.

Workr Fees – €575 per month plus €350 set up fee. This applied to both the employed and self-employed solutions

Employment Summary

Registration – New employees will be registered/reported to the Swedish Tax Agency prior to their commencing work. If the worker doesn’t have a Person Number yet, this must be obtained as without it we are not able to receive a tax table, which is required for the calculation of the income tax withholding and payroll processing.

Contract – Open ended contracts are the norm however please note termination by the employer can only be carried out in case of a ‘just cause’. Fixed-term contracts can also be used, which do not require a specific reason for termination, a month before the expiry of the contract, notice should be given to advise the worker that the contract will not be further extended.

Employers social security contributions are 31.42%

Employees social security contributions are 7%.

Tax – There are 2 types of tax in Sweden, municipal tax and national income tax.

Municipal tax is a flat rate of 32%

National income tax is progressive:
0 – SEK455,200: 0%
SEK455,200 – SEK662,200: 20%
Over SEK662,300: 25%%

Benefits – Holidays: 25 days per year.

13 public holidays, no statutory entitlement to time off or pay, but this is subject to CBA rules.

At least 13 days sick leave paid by the employer (set at 80% of the employee’s normal pay and paid from the 2nd to the 14th day of sickness).

One month’s notice.

Self-Employment Summary

Registration – A self-employed contractor will be registered for F-tax. They will need to meet the strict criteria for self employment to be able to use this service.

Contract – A fixed-term self-employed contract can be used in Sweden for self-employment.

Social Security – Social security contributions: 28.97% of taxable income plus a 7% pension contribution.

Tax – There are 2 types of tax in Sweden, municipal tax and national income tax.
Municipal tax is a flat rate of 25% for sef-employed.

National income tax is progressive:
0 – SEK455,200: 0%
SEK455,200 – SEK662,200: 20%
Over SEK662,300: 25%

Benefits – Typical expenses associated with the running of the business such as business travel costs, internet and mobile bills, car and/or mileage expenses, etc are allowable.

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