COST OF HIRING AN EMPLOYEE IN SWEDEN

Table of Contents
Traditional employment of an employee with a company versus EOR (Employee of Record)
Formalities for leaving and starting work in Sweden
Salary and working hours in Sweden
Taxes in Sweden

Sweden is one of the most popular destinations for those seeking work abroad. High wages, social benefits and the ability to maintain a work-life balance make it attract many workers from other EU countries and beyond.

Swedish workers’ salaries are among the highest in Europe. Unskilled workers can easily support themselves in this country, as there is little difference in the wages earned there.

Citizens of European Union member states have unrestricted access to the Swedish labor market, as well as the same rights as its citizens. Because it is a country that also belongs to the Schengen area, people from Poland can cross its borders by presenting a valid identity card or passport. During your stay in Sweden, you can use an ID card issued in a country that belongs to the European Economic Area.

TRADITIONAL EMPLOYMENT OF AN EMPLOYEE IN A COMPANY A EOR (EMPLOYEE OF RECORD)

Employer-employee relations in Sweden are regulated by laws, among others:

– Employment Protection Act
– The Working Environment Act
– The Act on the Status of Union Representation
– The Co-Determination Act

Sweden has collective bargaining agreements, which are established between employer associations and trade unions in a particular industry. These agreements are concluded for a period of several years, after which they are renegotiated. The provisions of collective agreements cover all aspects of working conditions and pay. There are currently about 450 collective agreements in Sweden.

The provisions of the collective bargaining agreements extend not only to working Swedish citizens, but also to Polish citizens working in companies in Sweden, even if they are not members of a union that is part of the agreement.

The provisions of the agreements also apply to Polish companies that provide services in Sweden under a contract for work. The provisions of all collective bargaining agreements include a provision according to which a company that is a party to the agreement may enter into cooperation with other companies, provided that their employees belong to a Swedish trade union.

For this reason, Swedish trade unions are demanding that Polish companies executing service contracts in Sweden enter into an agreement with them, under which the activities of these companies in the country will comply with the terms of the collective agreements. These companies will then be obliged to pay fees to the trade union in question and to comply with the established wage rates.

When negotiating a service contract with a Swedish contractor, a Polish company should discuss the need for an agreement with a Swedish labor union and the wage level imposed by the union for Polish workers.

Trade unions in Sweden (fackföreningar, or facket for short) have a fairly strong presence. More than 70% of the working population belongs to them. Union members pay a small fee, through which they gain support in employment matters, insurance in case of unemployment (some of the unions also offer a benefit subsidy during this time), as well as the opportunity to receive career counseling. Finding oneself unemployed for a union member is unlikely, as these unions fight for every worker.

Collective agreement (kollektivavtal)

A collective contract is concluded between an employer and a labor union. With this agreement, employees are guaranteed employment, a fixed salary, vacation time and protection if the employer does not comply with its terms. When looking for a job in Sweden, it is therefore worth paying attention to whether a potential employer has a collective agreement.

Forms of employment in Sweden

Employment of an employee in Sweden is based on an employment contract (anställningsavtal or arbetsavtal).

cost of hiring an employee in sweden - forms of employment

Time-limited contracts include:

– probationary contract (provanstälning), which can be for a maximum of 6 months,
– a fixed-term contract (visstidsanställning), which can be concluded for a maximum of 2 years,
– a contract for the performance of a particular job or project (projektanställning),
– contract to perform seasonal work (säsongsarbete),
– replacement contract (vikariat).

The most popular, and the most favorable form of employment for the employee, is an indefinite contract.

According to the Employment Protection Law (Lag om anställningsskydd), an employer may enter into an employment contract with an employee orally. However, he is required to provide the employee with a document containing the terms and conditions of employment in writing.
It is best to conclude a probationary employment contract in writing in two identical copies. This way, if there are any problems or conflicts with the employer, you can assert your rights in court.

Having an employment contract is a guarantee for the employee of permanent employment, income, vacation and other benefits that come with the employment relationship. When signing an employment contract, make sure that all these elements are clearly stated.

cost of hiring an employee in sweden - contract

Before signing an employment contract, always read the terms and conditions. If the provisions in the contract are incomprehensible, it is advisable to take the help of an interpreter. If there are certain changes in the terms and conditions of employment, the employer is obliged to inform the employee of them within a month.

An employee who becomes a victim of fraud can seek assistance from the Polish Embassy in Sweden or the Union of Poles in Stockholm.

Social insurance in Sweden

Swedish citizens or residents are entitled to social insurance. These individuals must register themselves with the Insurance Fund (Försäkringskassan) to be eligible for social security and health benefits. The same documents required by the Tax Office must be presented there. Both the Tax Office and the Insurance Fund do not keep the original documents, but make copies.

Membership in the Insurance Fund provides benefits such as:

– receiving wages during illness,
– covering medical expenses,
– obtaining a child allowance,
– housing allowance.

In order to receive child allowance (barnbidrag), the details of family members who have remained in the country must be entered when registering with the Insurance Fund. The registration form can be filled out electronically at www.forsakringskassan.se. This website is available in 22 languages.

In some cases, factors such as place of residence, period of insurance, or amount of income received may determine access to certain benefits. The period of insurance in another European Economic Area (EEA) country counts towards the total period of insurance. The document certifying insurance in another EU country is a blank E, which must be obtained in the home country.

The cost of hiring an employee in Sweden

The costs of hiring an employee in Sweden include:

– recruitment costs – are related to placing advertisements, or advertising vacant positions, and the time the employer spends reviewing applicants’ application documents, contacting and interviewing them,
– training costs – are related to training new employees to perform their job duties,
– compensation costs – includes wages paid to the employee, the cost of the employer’s taxes and the payment of benefits to employees, for example, for days of vacation due.

Vacation leave

According to the Vacation Act (semesterlagen), every employed person is entitled to vacation benefits. These benefits include:

– the right to time off (semesterledighet),
– vacation allowance (semestertillägg),
– receiving pay during vacation (semesterlön).

The leave law sets minimum rates for the above benefits, while the employer may offer to pay the employee at a higher value.

All employees in Sweden are entitled to 25 days of vacation per year, regardless of whether or not they work full time. Depending on the job position, some employees are entitled to more than 25 vacation days. Some collective bargaining agreements also offer more. Vacation includes only full working days. It does not include Saturdays, Sundays or holidays. The employer is obliged to inform the employee of the period in which he can use his vacation.

However, there are special provisions for employees who:

– work on Saturdays and Sundays,
– work different shifts,
– have irregular working hours,
– are employed for short periods of time,
– are paid at an hourly rate.

The right to vacation does not apply to those employed for a period not exceeding 3 months, whose working hours are a maximum of 60 hours. However, they are entitled to a vacation allowance, which should be included in the salary specifications. In the event that the working time of an employee employed for a period of not more than 3 months is more than 60 hours, then he or she acquires the right to vacation. In this situation, the vacation allowance should be added to the vacation pay.

The earning year (intjänandearet) in Sweden begins on April 1 and ends on March 31 of the following year. During the earning year, employees earn the right to paid vacation, which they will be able to use in the following vacation year (semesteråret). Those who have started work and have not managed to earn the right to paid leave can take unpaid leave in the first and second years of employment.

Many companies in Sweden give such people the opportunity to take förskottsemester. This means that the employee receives paid leave, which comes in the form of a debt to the company. If the employee resigns from his or her employer within five years of employment, he or she will have to pay it back. This debt is usually deducted from the amount of the last salary. If the employee resigns after five years of employment, then the debt is settled.

Vacation pay (semesterlön) is paid to employees while they are on vacation. Its value represents 12% of the income earned during the earning year. During an employee’s vacation, the employer can pay the employee’s regular salary, and pay the vacation pay later as an adjustment. It must do so by the end of the vacation year. Those who leave their jobs are entitled to receive the entire amount due for vacation.

Sickness of an employee

An employee who becomes ill is obliged to inform his employer. He may provide the information orally or in writing. If the period of illness exceeds 7 calendar days, the employee must provide the employer with a sick leave, which should indicate the degree of incapacity.

In a situation where an employee is frequently absent from work, and these absences last less than 7 days, the employer may require the employee to present sick leave even from the first day of illness. The employer should submit this request in writing.

By law, the employer pays the employee sick pay for the first 14 days, except for the first day (karensdag). If the employee is sick for a longer period, the Insurance Fund (Försäkringskassan) pays the salary for subsequent days. During illness, an employee’s salary is 80% of his or her salary. The Insurance Fund may challenge the sick leave and appoint its own specialists to determine the extent of the employee’s inability to work.

When an employee returns to work and falls ill again within 5 days, this counts as a continuation of the period of illness, even if the employee falls ill with another illness. This arrangement is conducive to avoiding the deduction of the first day of the second illness (karensdag) from the employee’s salary.

Pregnancy and parental leave

In a pregnancy situation, female employees receive 7 weeks of leave before the birth of a child and 7 weeks after the birth. Parental leave in Sweden is 480 days after the birth or adoption of a child. An employee can take this leave at any time until the child is 8 years old. It is possible to divide this leave between partners. However, it should be noted that 60 days are reserved for each, which cannot be divided between the mother and father of the child. Parents of children under the age of 9 have the right to work part-time.

In the event of a child’s illness, parents can take leave to care for the child, known as „Vård av Barn” (VAB). The employee must report the child’s illness and claim compensation from the Insurance Fund (Försäkringskassan).

Termination of employment contract

Both the employer and the employee can terminate an employment contract in Sweden. The rules for termination are set out in Lag om anställningsskydd (LAS), the Employment Protection Law, which serves specifically to protect the rights of the employee.

If an employee neglects his duties, is inefficient, reorganizes work in the plant or completely fails to do his job, then the employer has the right to terminate his employment contract.

Termination of the employment contract by the employer:

– must be handed to the employee in person in writing. If this is not possible, the employer may send the employee a notice of termination by registered mail to the last address provided by the employee,
– must be based on objective reasons,
– must not refer to reasons, which are the employee’s fault, if the employer knew about them at least 2 months before the decision to terminate the employment contract,
– must contain an instruction on the possibility of appeal,
– must contain information on the employee’s priority for reemployment in the same establishment,
– is not mandatory if the employer can offer the employee another job at the same establishment.

The employee may require the employer to state the circumstances that led him to make such a decision.

Notice period

The employment contract is terminated at the end of the notice period.

cost of hiring an employee in sweden - notice period

In the case of a fixed-term employee, working for an employer for a period of 1 to 3 years, whose contract will not be renewed, the employer should inform the employee at least 1 month before the expiration of the employment contract.

During the notice period, the employee has the right to receive his salary, as well as other benefits previously received, even if the employer transfers him to another position or if the employee has no tasks to perform. The employer also cannot transfer the employee to another city during this time if this would make it difficult for the employee to find a new job. The employee may apply for paid time off to look for a new place of employment.

The employment contract may be terminated without a notice period in the case of a gross violation by the employee of his basic duties. An employer may not terminate an employee’s employment contract without a notice period if 2 months have passed since the employer obtained information regarding the circumstances that justify the termination.

Termination of an employment contract without a notice period must be:

– delivered to the employee in person in writing or, when this is not possible, sent by registered mail to the employee’s last given address,
– contain information regarding the possibility of challenging it and the compensation to which he is entitled.

Settlement of disputes between employer and employee in Sweden

In case of problems with the employer, the employee should first turn to a union representative.

Disputes between an employer and an employee in Sweden are handled by:

– Labor Court (Arbetsdomstol) – if the case concerns a collective agreement or an establishment where such an agreement is in force. A petition must be filed by a labor union, an employer association or an employer who has signed a collective agreement,
– District Court (Tingsrätt) – an application can be filed by an employee who is not a member of a trade union. In addition to filing the application, he must pay a court fee of SEK 900 to 2,800. The amount of this fee depends on the amount of the claim. If one of the parties disagrees with the court’s verdict, he can appeal to the Labor Court, which issues the final judgment. People with low incomes and no insurance to cover legal aid costs can apply for financial assistance from the state (rättshjälp). You can apply in person or through a lawyer. If you receive such assistance, the state will cover the costs of the case in court and the lawyer’s expenses, not including 2 hours of legal advice,
– Bailiff’s office (Kronofogdemyndigheten) – handles simple cases that do not require a court ruling. The fee for collecting a debt is SEK 300. All information and forms can be obtained from branches of the Tax Office (Skatteverket) or at www.kronofogden.se.

Self-employment in Sweden

Citizens of European Union member states also have the right to establish and operate a business in Sweden under the same conditions as Swedish citizens. In order to establish a business in the country, a company must be registered with the Tax Office (Skatteverket) and the Business Registration Office (Bolagsverket). After registration, the business is given an identification number.

Employee of Record (EOR)

Doing business in the Swedish market requires close knowledge of regulations at the local, regional and even global level. An entrepreneur must be vigilant and highly committed, as running one’s own company in Sweden can involve a lot of business risk and generate high costs.

Employee of Record is a modern tool that involves the professional and formal management of employees by an external organization. This means that the enterprise has the opportunity to gain an employee, hired in accordance with local laws by a formal employer who is an EOR entity. Thanks to this solution, entrepreneurs do not have to deal personally with matters concerning the employment of an employee.

Employee of Record handles the HR and payroll affairs of an entrepreneur in another country enabling him to run his business abroad and manage it from anywhere in the world. For business owners, this solution is very beneficial both strategically, operationally and financially.

cost of hiring an employee in sweden - advantages of EOR

By working with EOR, business owners can freely develop their company, leaving HR and payroll matters in the hands of experts.

An example of a company providing EOR services in Sweden, among others, is Uniqorm. It is a company with an international infrastructure and years of experience in conducting such services. Its team consists of experts who provide expertise to their principals. Uniqorm carries out orders directly related to the employment of employees, payroll, as well as immigration in accordance with regulations and legal requirements. More information is available at https://uniqorm.com.

The monthly Employee of Record subscription includes:

– payments to employees,
– welfare matters,
– administrative activities,
– tax settlement.

The EOR helps entrepreneurs by speeding up the process involved in all the formalities. In addition, it provides employees with payment in Swedish kronor, as well as employee benefits that include medical care or pension insurance, among others. Employee of Record also contributes to lowering the entrepreneur’s business risk.

How is the cooperation with the EOR carried out?

An entrepreneur cooperating with a company providing EOR services provides it with information about the employee, the period of his employment and the rate of pay. All formalities, such as an identification number, a visit to the office and registration, are completed by employees of the company providing Employee of Record services. On the last day of the month, the entrepreneur provides them with information on the number of hours worked by a given employee. The company providing EOR services issues an invoice to the entrepreneur in the amount of that employee’s salary in PLN currency at the NBP exchange rate. Once the transfer is booked, the employee in Sweden receives the salary payment.

DEPARTURE FORMALITIES AND STARTING WORK IN SWEDEN

Before going to Sweden, it is a good idea to learn at least basic phrases. During interviews, a communicative knowledge of Swedish and a willingness to learn it are usually required. Knowledge of English may be useful, but it is insufficient in the long run. For Swedes, English is a substitute language that is not accepted in everyday communication. People who know Swedish are far more likely to get an engagement than those who do not.

When looking for a manual labor job, the skills you have are important. So, in addition to your resume, you will need documents to prove your acquired skills, such as diplomas or work certificates translated into Swedish. For some jobs, Swedish or European certificates are required.

How do you look for a job in Sweden?

1. Through referrals – since a lot of importance is placed on recommendations in Sweden, the easiest way to find a job is through a referral from another familiar person in the country, such as family, friends or acquaintances working for a particular employer. This is known as „networking,” which involves building a network of contacts. Networking can also be built through social networks by networking with other users, and by attending industry events or speakers.
2. State employment offices (arbetsförmedlingen), which offer advice or courses in addition to providing information. The Swedish labor office’s website, www.arbetsformedlingen.se, has many employment opportunities. These can be used by people registered as unemployed who have already worked in Sweden. It is therefore a good option for those with a long-term residence permit.
3. On the Internet, using online portals or social networks such as LinkedIn or Facebook, as well as the following sites:
– www.monster.se
– www.poolia.se
– www.manpower.se
– www.stepstone.se
– www.blocket.se
– www.polonia.info
– www.pracujwunii.pl
– www.jobs.pl
– www.hotista.pl
– http://www.gulasidorna.se is a site that contains the addresses of various companies
– http://se.indeed.com
– https://www.careerjet.se
– www.ams.se is a site of the State Labor Office that contains a bank of job advertisements and a lot of practical information for job seekers.
4. In the local, regional and business press by browsing ads.Most job advertisements are published in Dagens Nyheter, Sweden’s largest newspaper morning newspaper. You can also add your own job search ad jobs. It is also a good idea to reach out to the business press. Examples of such newspapers are Svenska Dagbladet and Dagens Industri.
5. There are employment agencies that recruit workers and refer them to jobs. Some of them offer housing and transportation to the workplace. They do not charge agency fees. However, they may charge, for example, for the travel and return of the person referred to work, for the translation of documents, and for medical examinations. The employment agency is obliged to provide, in writing, all information about fees related to the referral, taking up and performance of work by the employee abroad. Contact information for employment agencies can be found at www.eniro.se under Bemanningsföretag.
6. In the network of public employment services of the member countries of the European Economic Area EURES – in this system you can look for a job on your own or use the help of advisors. EURES advisors deal with providing information about employment opportunities, as well as the administrative and legal aspects of moving abroad. They also provide advice, as well as assistance to job seekers in another EU country. They help employers who want to hire people from other European Economic Area countries. EURES advisors can be met at provincial or district labor offices. EURES organizes European Job Days, which are held online or through recruitment fairs that put job seekers in contact with employers from other EU countries. At recruitment fairs, you can get lots of tips on working and living in other European Economic Area countries.
7. In the Register of Employment Agencies (KRAZ), where you can find information about employment agencies that operate in Sweden.
8. At recruitment agencies called head-hunters, which are in the business of offering jobs to middle and senior management. Some of these agencies create their own databases of candidates.

Please note that neither the Embassy nor the Migration Service is involved in brokering a job search in Sweden. The Central Labor Office website provides information on the Swedish labor market.

According to the consular recommendations of the Republic of Poland in Sweden, it is necessary to check whether the intermediary, potential employer or principal, are legal entities registered with the local Companies Registration Office (Bolagsverket). Such information can be found at www.bolagsverket.se, at the Bailiff’s Office (Kronofogden) at www.kronofogden.se or at www.allabolag.se. Sometimes recommendations from friends or employment agencies are not truthful.

What professions are in demand in Sweden?

Sweden is a well-developed country with a low unemployment rate (about 8%). Due to the multitude of investments, the demand for specialists is quite high. Well-paid jobs can be found for people who have a profession that is in short supply in the Swedish labor market. In Swedish areas with low temperatures and inclement weather, the demand for foreign workers is higher than in the rest of the country.

Professions in demand in Sweden include:

– doctors,
– nurses,
– other health care workers,
– caregivers of the elderly,
– architects,
– engineers,
– constructors,
– electricians,
– mechanics,
– computer scientists,
– drivers,
– security guards,
– sales representatives,
– salespeople,
– preschool and early childhood education teachers,
– elementary and secondary school teachers, especially in the sciences,
– Social work and social counseling specialists,
– cooks,
– occupations related to the construction industry, such as machine operators, bricklayers, concrete workers, painters, welders, reinforcers, locksmiths, carpenters,
– occupations related to agriculture,
– unskilled workers, e.g., cleaning personnel, manual laborers,
– seasonal workers.

The easiest way to find a job is in large Swedish cities such as Stockholm, Malmö, or Gothenburg. They have a larger job market and thus more offers. They are also home to headquarters of international companies whose corporate language is English. There are also companies in these cities that do not require Swedish language skills.

However, it is worth remembering that, despite everything, knowledge of the language makes it much easier to function not only at work, but also outside of it. Above all, it is a certain asset and is welcomed by Swedes. Many of them speak English, but prefer to use Swedish in social interactions.

In smaller cities and small companies, Swedish language skills are required for most positions. Applications from candidates in English are not even considered.

If you are looking for a job for less than 90 days, consider temporary work. Many Swedish companies hire employees for seasonal work for a few weeks or months during the year.

Setting up a bank account

You will need a bank account to receive your salary. Redirecting your paycheck to a Polish account and paying with a Polish bank card in Sweden can generate high costs. It is worth considering setting up a Wise account. Such an account can be set up free of charge even before you leave for Sweden without leaving home. All formalities related to this account can be completed from within the app. Wise offers to exchange money at the average market rate, and account users do not incur currency conversion fees.

Accommodation in Sweden

The question of accommodation in Sweden is worth addressing before you leave, as there are more people interested in renting or buying property in Sweden than there are available vacant apartments. The best way to do this is to publish an advertisement about looking for an apartment. You will need the address of your place of residence if you have a written employment contract with your employer.

What documents to take with you to Sweden?

– A valid identity card or passport,
– European Health Insurance Card (EHIC) – this is a free card issued by the National Health Fund. To obtain it, you need to apply at the Delegation of the National Health Fund or the Regional Branch. Having such a card gives you the opportunity to use medical facilities in European Union countries that have an agreement with the health insurance fund. Use of these facilities is based on the rules of the country,
– documents confirming family status, such as a marriage certificate or birth certificate,
– application documents and any documents proving professional qualifications translated into Swedish,
– a list of contacts to Polish diplomatic missions. This list should include the following contact information:
a. Embassy of the Republic of Poland in Stockholm
address: Karlavägen 35
114 31 Stockholm
phone: (00-46 8) 50 57 50 00
website: www.sztokholm.msz.gov.pl
e-mail: sztokholm.amb.sekretariat@msz.gov.pl
The embassy is open Monday through Friday from 08:00 to 16:00
b. Consular Section of the Polish Embassy in Stockholm
Prästgårdsgatan 5
172 32 Sundbyberg
Days and hours of reception: Monday, Wednesday, Thursday, and Friday: 09:00-13:30, Tuesday: 12:00-17:00
Website: www.sztokholm.msz.gov.pl/pl/informacje_konsularne/informacje_konsularne
e-mail: sztokholm.amb.wk@msz.gov.pl
c. Honorary Consulate of the Republic of Poland in Halmstad
Consulate address: Brogatan 42
Postal address: Box 7111
300 07 Halmstad
Website: www.konsulatet.se
Tel: +46 (0) 35 21 09 55 (phone during office hours)
Fax: +46 (0) 35 15 84 15
Days and office hours: Mondays, Wednesdays, Fridays 10 a.m. – 12 p.m.
E-mail: polska@konsulatet.se
d. TELEPHONE INFORMATION:
open Monday, Wednesday, Thursday, and Friday: 2:30 pm – 3:30 pm, Tuesday: 10:30 am – 11:30 am
Tel: 0046 (0)8 – 50 57 50 60
Passport matters: phone 0046 (0)8 -50 57 50 66
Citizenship matters: phone 0046 (0)8 – 50 57 50 65
Legal affairs and consular assistance: phone 0046 (0)8 – 50 57 50 63
Emergency phone number to the consul on duty, functioning only after office hours and on non-working days in cases of emergency and requiring immediate consular intervention (e.g., accidents or deaths of Polish citizens): 0046-(0)709-220-892
Emergency e-mail address open outside normal office hours: sztokholm.wk.dyzurny@msz.gov.pl.

Some professions, such as the medical profession, require a license to practice, Swedish language skills at the C1 level, Swedish standards, as well as certain credentials, which may require further study or nostrification of diplomas.

Verification of Polish diplomas

There are directives in the member countries of the European Union, including Sweden, relating to the recognition of professional qualifications and diplomas for certain professions, which, according to the law, can be practiced with the appropriate certificates, cards or permits. A person who is qualified to practice a profession in his home country has the right to practice it also in another country of the European Economic Area. However, there are some exceptions, requiring a permit to practice the profession.

Recognition of qualifications applies to the following professions:

– doctors,
– midwives,
– nurses,
– dentists,
– pharmacists,
– veterinarians,
– hairdressers,
– electricians,
– plumbers.

Verket för Högskoleservice is in charge of verifying Polish high school graduation certificates. To have your certificate verified, you must fill out and send in the application form available at www.vhs.se with a copy of your high school diploma and a copy of its translation into Swedish or English attached. The verification time is approximately 6 months.

Högskoleverket is the office that handles the free nostrification of diplomas. From its expertise you can find out what Swedish level of education a diploma corresponds to. To do this, you need to fill out an application form available at www.hsv.se and attach certified copies of certificates or certificates. Such a set should be sent to:
Högskoleverket,
Avdelningen för bedömning av utländsk utbildning,
Box 7851,
103 99,
Stockholm.
The duration of the verification is approximately four months.

A bachelor’s degree from a private school is recognized when that school has the right to administer a master’s-level exam in the same field of study.

In order for the nostrification of higher education obtained in Poland to be carried out, the following documents must be presented:

– diploma or an officially certified two-sided copy of its copy,
– index or extract from the index, including the number of hours of each subject. The subject of the master’s or doctoral thesis must also be evident from these documents,
– in the case of a doctoral dissertation, a certified copy of the title page and table of contents of the dissertation will be necessary.

Residence permit in Sweden

Citizens of European Union member states have the right to stay, work, or study in Sweden. If your intended stay in the country is more than 90 days, you must register with the Migration Authority (Migrationsverket) and apply for a residence permit. These formalities can be completed before leaving for Sweden at the Swedish Embassy in Warsaw or the Swedish Consulate in Gdansk.

cost of hiring an employee in sweden - residence permit

Applicants must fill out the form „Application for residence permit for EU/EEA-citizens and their families” and attach a certified copy of their identity card or passport, as well as a document proving that they meet one of the above conditions.

Each person applying for a residence permit is assigned to one of the following categories:

– employed – to qualify for this category, a certificate from the employer must be submitted with the documents. It should contain the following information:

  • type of work,
  • the working hours,
  • the period for which the contract was concluded.

If the contract with the employer in Sweden was concluded for a period of one year
or longer, the residence permit will be issued for 5 years,
– self-employed – in order to qualify for this category, a certificate of company registration or other proof of business activity must be included in the documents,
– representative of the liberal profession, recipient or supplier of services – to qualify for this category, you must submit a document that certifies the nature of the work and certificates on the type of services provided or delivered,
– families of Polish citizens – in order to obtain a residence permit for your family members, you must submit a document that provides proof of the degree of relationship or marriage,
– border workers – people who meet the following criteria are qualified for this category:

  • They work in Sweden,
  • They live in another country,
  • They return to that country at least once a week.

These individuals do not need to have a residence permit.

Once you have received your residence permit, you must go to the Tax Office (Skattekontoret) to obtain a Swedish identification number (personnummer), and a tax card. If your planned stay will not exceed one year, a samordningsnummer (temporary personal number) will be issued instead of a personnummer. A proof of residence permit, identity card or passport, marriage certificate, etc. must be presented at the Tax Office.

cost of hiring an employee in sweden - personnummer

According to regulations in effect since July 1, 2013, foreign entrepreneurs who post their employees to work in Sweden for more than five days must report the occurrence to the Arbetsmiljöverket.

Job interviews in Sweden

Citizens of European Union countries can work in Sweden under the same rules as Swedish citizens. Their rights and obligations are the same as those of Swedish workers.

The course of job interviews in Sweden is similar to that in Poland. In large companies, the recruitment process usually consists of several levels (initial interview, tests, interview with potential superiors, etc.). For Swedish employers, the candidate’s references are of great importance. Therefore, it is worth attaching to your application documents the contacts of people that a Swedish employer will be able to contact.

Swedish companies often conduct initial interviews remotely via video conference. Based on this, they decide which candidates to invite to the next stages of recruitment, which take place in face-to-face meetings.

Immediately after entering into a contract with an employer, you should:

– try to get an entry in the population register (folkbokföring). This will enable you to obtain a Swedish identification number (personnummer)
– report it to the Tax Agency (Skatteverket) in order to obtain a temporary NIP number (samordningsnummer). It will be needed for tax settlements. In order to obtain a permanent NIP number, you will need to present a proof of residence permit to the Tax Office.

WAGES AND WORKING TIME IN SWEDEN

Swedish law does not regulate the minimum wage rate. For each occupation, the rate is set by collective bargaining agreements. The minimum wage rate for an occupation is influenced by the demand for workers, the qualifications required for the job, the popularity of a particular industry, the type of contract made with employees, and the size of the establishment and its capital.

Trade unions (Facket) have a very strong influence on working conditions in the professions concerned. Employers who have a collective agreement (kollektivavtal) with the unions are required to provide their employees with wages at a certain rate.

The minimum rate set by collective bargaining agreements does not apply to non-employed workers. In Sweden, there is a guaranteed income level for every citizen, which is equal to the minimum unemployment benefit – about SEK 320 per day. Those who are not employed on a full-time basis receive an hourly rate agreed with their employer, which in 2020 was about SEK 120-150 gross per hour.

Those who start working in Sweden usually have a lower salary, but if the employee performs his job properly, his earnings will increase over the following months.

How much is earned in Sweden?

– Directors of banks and large companies receive the highest monthly salaries – about 124,000 SEK gross per month in the financial sector, 66,000 SEK gross per month in the IT industry.
– Specialist doctors – about 78,000 SEK gross per month.
– Nurses – their salaries are a minimum of SEK 38,000 gross per month. Specialist nurses’ salaries are around 44,000 SEK gross per month.
– Attorneys – about 51,000 SEK gross per month.
– Engineers – about SEK 30,000 – 40,000 gross per month.
– Electricians – about SEK 25,000 gross per month.
– Carpenters – about 24,000 SEK gross per month.
– Cooks – about 23,000 – 25,000 SEK gross per month.
– Waiters – about 21,000 SEK gross per month.
– Cashiers – about 23,500 gross per month.
– Housekeepers earn about 24,000 – 25,000 SEK gross per month.
– Construction workers – about 29,000 – 34,000 SEK gross per month.
– Cleaners in hotels – about 23,000 SEK gross per month.
– Welders – about 32,000 SEK gross per month.
– Automotive workers – 25,000 – 30,000 SEK gross per month.
– Truck drivers – 30,300 SEK gross per month.
– Workers doing seasonal work, such as gardening – 20,000 – 23,000 SEK gross per month.

Employees in Sweden usually receive salary payments on the 25th of each month. These are usually salaries for the previous month. This means that an employee who started work on March 1, for example, will not get paid until April 25.

Note that companies in Sweden do not pay salaries in cash. Employees, who do not have a bank account, usually receive a check, which they can cash at the bank. They can also express a written request to have their salary paid to another person’s account. So it’s a good idea to set up an account with a Swedish bank after receiving your employment contract. Under the Bank Deposit Law (lag (1995:1571) om insättningsgaranti 11§d), every EU citizen has the right to do so.

Unemployment benefit

Unemployment benefits are due to those who have paid contributions to either basic or voluntary unemployment insurance. The condition for receiving the basic benefit is to have worked at least 80 hours per month for 6 months in the past year. Unemployment benefits can be paid for 300 working days after job loss at a maximum of SEK 320 per day.

The cost of living in Sweden

In 2021, the cost of living in Sweden for one person was about SEK 8,300 per month (excluding rent payment for housing). In the same year, the cost of living in Poland for one person was about SEK 2,300 per month (excluding rent payment). These costs are about 24% of the average worker’s salary in Sweden, while in Poland they are about 44%. It follows that despite the high cost of living, workers in Sweden are left with more money than workers in Poland.

Working time in Sweden

Working time in Sweden is 40 hours per week. The dimension of possible overtime hours is 8 to 10 hours. Working time in a year cannot exceed 200 hours. Employees who are parents of children under the age of 8 can request a 25% reduction in working time.

Every employee in Sweden is entitled to breaks during which he or she does not have to be at the employer’s disposal. These breaks do not count as working time. The employer must inform the employee of the length of the breaks and the hours during which the employee may take them. Working time between breaks should not exceed 5 hours.

For employees working in conditions that are strenuous or harmful to health, the employer may determine additional breaks to be included in working time.

Swedish employees are guaranteed by law the right to rest at night, i.e. from midnight to 5 a.m., as well as on Saturdays and Sundays, unless they work in an occupation that requires work during these hours. In the case of a hazardous or physically demanding occupation, night work hours may not exceed 8 hours.

Swedes are concerned with work-life balance. On an annual basis, other countries in the Organization for Economic Cooperation and Development (OECD) work about 100 hours more than Sweden.

cost of hiring an employee in sweden - laws

The provisions of this law do not apply if a collective agreement is signed. The Working Environment Authority (Arbetsmiljöverket) controls compliance with regulations concerning, among other things, employees’ working hours. In the case of exceptional circumstances that are not covered by the collective agreement, this Office may authorize overtime work of up to 150 hours per calendar year. The employer is obliged to inform the employee of any changes related to working hours two weeks prior to their implementation.

TAXES IN SWEDEN

Sweden is considered one of the most taxed countries in the world. For social benefits, employers contribute 33%, while employees contribute 7%. Additional pension charges apply to all companies.

The following taxes are paid in Sweden:

– on income earned from work,
– on benefits from the insurance fund, etc,
– on pensions,
– on income earned from offshore work.

Reimbursements for travel between Sweden and Poland and accommodation costs are not taxable.

If a person from another country intends to set up a business in Sweden, he or she must apply to the Swedish Tax Agency (Skatteverket) for a foreign residence tax ruling. To do so, he must fill out form SKV 4350 (also available at www.skatteverket.se). If you are submitting this blank form for the first time, you must include a copy of your ID card or passport.

Income tax matters on income earned from offshore work are handled by the Gothenburg Tax Authority.

Forms of taxation in Sweden

An employee staying in Sweden for less than 6 months has the following forms of taxation to choose from:

– income tax for foreign residents (SINK), which is 25%. The application for SINK tax is submitted by the employee or his employer to the Swedish Tax Agency. This tax is calculated on the gross amount of the employee’s salary. In this situation, the employee is not required to file a tax return and is not entitled to any income deductions,
– income tax, in accordance with the Income Tax Act, which is the same that is paid by persons living in Sweden.

If an employee lives abroad and stays in Sweden for more than 6 months, he or she must pay income tax in accordance with the Income Tax Act. Such an employee must register with the Swedish Tax Agency to obtain a coordination number, even if he or she is not required to register in Sweden. The next step is to submit an A-tax application and tax return.

The obligation to register in Sweden applies to an employee who plans to stay in Sweden for more than one year. Registration is done during a personal visit to the Swedish Tax Agency, where an application for A-tax must also be filed and a tax return must be submitted. An employee staying in Sweden for more than one year is subject to income tax in accordance with the Income Tax Act.

The income tax rate in Sweden depends on the employee’s earnings. Workers with high earnings pay income tax at a rate of more than 50%.

cost of hiring an employee in sweden - income tax

The employer is required to file an income tax return for each employee. This return contains the following data:

– the amount of salary paid,
– the accrued tax,
– employer’s contributions,
– other benefits received by the employee.

This is known as the PAYE (Pay As You Earn) model.

Anyone who earns income from work in Sweden is required to file a tax return in the following income year. The income year is the year in which the income is earned. The income year in Sweden begins on January 1 and ends on December 31.

The employer withholds advance municipal income tax from the employee’s salary in an amount according to the applicable table. It is his duty to pay the tax for the employees. In January, employees receive information from the employer about the income they earned in the previous year. The same information is sent by the employer to the Tax Office.

Every taxpayer receives a completed tax return (Inkomstdeklaration) from the tax office in early April. Taxpayers supplement the returns they receive with the deductions they are entitled to. They must submit their completed returns to the Tax Office by the first Monday in May. The Tax Office informs the taxpayer of the final tax amount by mid-September at the latest.

Tax residence

The Convention between the Government of the Republic of Poland and the Government of the Kingdom of Sweden provides a safeguard against double taxation and tax evasion.

cost of hiring an employee in sweden - tax resident

Poles’ income earned from work in Sweden is not taxed in Poland. Swedish tax residents are entitled to deduct their income by 30% of the per diem for each day they are outside Sweden.

For those who have Swedish citizenship or have lived in Sweden for a minimum of 10 years, Swedish tax residency is retained for five years after leaving Sweden.

VAT

The VAT rate for food in Sweden is 12%, while for other goods and services it is 25%.

Tax benefits in Sweden

The following tax benefits are available in Sweden:

– for running a dual household. This relief is available to those who pay for their own board and lodging in Sweden. Travel expenses between Sweden and Poland can also be deducted under this relief. An employee posted to work in Sweden can deduct the cost of food for the first month of work, or more per diem. When deducting lodging costs, proof of payment must be provided. A deduction for travel between Sweden and Poland is available if public transportation cannot be used. Documented costs incurred in connection with these trips, such as receipts or invoices, must be provided,
– for paying insurance costs in your home country. In order to take advantage of this relief, you must provide a document that proves the amount of insurance premiums, as well as an A1 certificate,
– relief related to educational costs. This relief is available to those who needed this education to keep their current job. Taxpayers who educate themselves for the purpose of changing jobs are not eligible for this relief,
– relief for the purchase of work clothes and tools necessary for work. In this situation, invoices or receipts must be provided as proof of purchase,
– tax relief related to the period of work (the so-called Grundavdrag). This relief is available to an employee who has worked the entire year or whose income has been earned from work in Sweden at least 90% of the time.

The concept of an economic employer in Sweden

On January 1, 2021, new procedures and reporting obligations for foreign companies were implemented in Sweden. They also cover Polish companies that post employees to work in Sweden on a short-term basis, as well as people traveling to Sweden for business purposes. This is known as the economic employer concept.

According to the first amendment, foreign companies are required to register with the Swedish Tax Agency (Skatteverket), as well as pay taxes and file monthly tax returns for employees hired for a short period in Sweden, even if it is less than 183 days.

A Swedish company is considered an economic employer if:

– exercises control and management over the employee,
– there is an exchange of employees between different companies,
– employees are exchanged within a single concern.

In addition, attention is paid to the following aspects:

– whether the formal employer invoices the cost of the employee’s salary to the Swedish employer where the employee performs work,
– which employer supplies the employee with materials and tools for the work,
– whether the qualifications of the workers and their number are determined by the formal employer or the Swedish employer,
– which employer appoints employees to perform the work in question and has the right to terminate the contract with the employee,
– which employer has the right to impose disciplinary measures,
– which employer makes decisions related to vacations and work schedules.

If it is determined on this basis that the Swedish company has control and management over the employee, then the Swedish company is considered an economic employer. In this situation, the Swedish employer acts as a principal who hires employees for temporary work.

cost of hiring an employee in sweden - economic employer

How an employee is taxed depends on whether the employer has an establishment in Sweden. A foreign company that does not have an establishment in Sweden cannot be an economic employer. This means that an employee providing services to this employer will be subject to the 183-day rule.

An employee employed by a foreign company who is hired to provide work for a Swedish employer is not eligible for tax exemption under the SINK Tax Act. He is therefore subject to tax liability.

According to Swedish law, an employee who stays in Sweden continuously for 15 working days and up to 45 working days in a calendar year is not considered hired as labor and no income tax liability arises in this situation. Tax liability arises as soon as the employee exceeds 45 working days. The formal employer, which is a foreign company, is required to register as an employer in Sweden and settle the employee’s income tax according to the general rules at 30%.

The second change requires Swedish entrepreneurs to make tax deductions from labor wages that are paid to a foreign company that is not registered with Skatteverket as an F-tax payer (f-skatt).

This means that in a situation where the foreign company is not registered as an F-tax payer, the Swedish company is required to deduct 30% of the invoice amount. This amount will be taken into account during the foreign company’s annual tax return.

If the foreign company does not file tax returns, then the automatic zero tax rate applies. After the final tax return, the foreign company will be paid the excess from the tax account. The foreign employer is required to report the individual’s income on a monthly basis, as well as calculate and pay advance income tax to the Swedish Tax Agency (Skatteverket).

According to the third amendment, foreign companies are required to provide the necessary information to estimate the tax liability.

This obligation applies to foreign companies that do not have a permanent establishment in Sweden. It covers companies that:

– have F-tax payer status,
– Are required to account for employees’ income tax,
– are required to keep electronic records of employees working on the construction site.

The foreign company’s submission of information to the Swedish Tax Agency (Skatteverket) is intended to allow the agency to assess whether the company has a permanent establishment in Sweden. The hiring of employees in the country by foreign companies may indicate either business operations in Sweden or an intention to do so.