Payroll in Sweden is not in place as a separate tax, however, employers are required to make social security contributions.
Companies are required to observe the rules for registering as an employer with the Swedish Tax Agency, as well as making the necessary submissions.
Investors who wish to open a company in Sweden
can receive more information about the required registrations for employers from our company formation experts.
Those who require payroll services in Sweden can also contact us for more information. Most businesses choose to outsource payroll as it is more convenient, and it allows for timely and accurate payments overseen by a team of experts.
Setting up payroll in Sweden
After investors open a company in Sweden, once the mandatory registration phase is complete, they will need to plan for an accomplish a number of other steps. These include meeting any special requirements that apply to their field of activity (such as special permits), as well as hiring employees and paying taxes. Our team can give you more details about the post-incorporation steps.
The first step for companies that will employ staff in Sweden is to register with the Swedish Tax Agency (Skatteverket).
The employer is required to pay contributions, as well as deduct income tax on behalf of his employees.
There are certain situations in which companies that hire foreign staff are not required to pay their percentage of the social security contributions.
This also impacts payroll in Sweden, however, it only occurs when the foreign national who are considered posted (and the employee has a certificate which proves that he/she is registered for social security purposes in another country).
Entrepreneurs who request specialized payroll services in Sweden will benefit from having services that meet these specific requirements, if they choose to hire foreign staff for their Swedish company.
In order to register the information for the purpose of payroll in Sweden, the employer will require certain data and documents from the employees. These are the Swedish tax identification number (for nationals) and personal documents for foreign employees.
The social security contributions in Sweden were the following at the time this article was published:
- 31.42% aggregate social security contributions;
- the contribution is 0% for individuals born in 1938 or earlier and 10.21% for those born between 1939 and 1953;
- the employer does not pat the pension insurance fee of 7% on income up to SEK 519,708;
- the maximum charge is SEK 36,400;
- this can be fully credited against other income taxes, subject to conditions; our team specializing in company formation in Sweden can give you more details.
Investors who are ready to start a business and are looking for more details on the costs can reach out to us for details.
We also offer virtual office
services, which can be a suitable option for reducing the cost generally associated with traditional office spaces.
Payroll services in Sweden
Working with a team of professionals who offer dedicated payroll services is advisable for many companies in Sweden, irrespective of their size or industry.
When working with a team of specialists, companies have access to the following payroll services in Sweden:
• employee registration for social security purposes; deregistration as needed upon the termination of the employment agreement;
• pay agreement optimization;
• bonus payments and salary management.
In most cases, payroll in Sweden is part of a larger accounting services package, however it can also be requested as a standalone service.
Employment statistics in Sweden
According to Statistics Sweden
, the number of employed individuals aged 16-74 is expected to increase by 691,000 between 2016 and 2040. The prediction is that most of the new employees will be foreign-born individuals.
Other data shows that:
• Employment: in May 2022 there were 5,175,000 employed individuals in Sweden;
• Foreign employees: the number of employed persons who were not born in Sweden increased by 84,000 to a total of 1,159,000;
• Unemployment: the number of unemployed individuals was 482,000, a decrease of 64,000 persons compared to May 2021;
• Work hours: the average work hours per week saw an increase of 3.5% in calendar-adjusted figures.