Global PEO in Sweden
Sweden ticks all of the boxes.
For workers, it offers good work-life balance and a high level of equality. There’s also a beautiful country to explore in their downtime.
For business owners, Sweden’s highly skilled workforce and strong, innovative economy are particularly appealing.
Businesses who choose to expand into Sweden are in excellent company, with organizations such as Spotify, H&M, Electrolux, IKEA and Ericsson all calling Sweden home.
Want to expand into Sweden? With a PEO like Skuad, you can hire Swedish employees and reach a new market. Check out our services here.
What is a PEO?
PEO stands for professional employer organization.
A PEO service works on behalf of a client company, taking responsibility for all their HR tasks. That includes sourcing, onboarding, payroll and benefits.
As well as outsourcing their local HR responsibilities, companies get to use their PEO globally. This means that they can easily hire employees in Sweden and around the world.
For international employees, a PEO will handle all tax and labor law compliance. They help their clients to meet all statutory requirements for the countries in which their employees are living and working.
Ultimately, a PEO allows a company to expand globally – hiring international talent without having to worry about HR tasks or the complex world of compliance.
Want to start hiring in Sweden? Find out if a PEO in Sweden is right for your business by chatting to one of the Skuad team today.
What are the benefits of using a PEO provider in Sweden?
Hire the best talent in Sweden (and the rest of the world)
There’s probably lots of great talent in your local area. But just imagine how many talented professionals there are across the whole of the world.
In these times of remote working and distributed teams, geographical location needn’t factor in your recruitment choices. With a PEO partner you can employ the very best talent, regardless of their location.
In Sweden, the majority of the population can speak English. The country boasts a highly skilled labor force and ranks as one of Europe’s leading innovators, with the country investing huge amounts in research and development programs.
If you find the ideal new team member – but they’re living in Sweden – it’s not a problem. A PEO in Sweden can help you to hire and pay Swedish talent, without the headache.
Avoid setting up your own legal entity in Sweden
So if you want to employ talent in Sweden but you don’t choose to work with a PEO service in Sweden, what can you do?
Your only other option is to register as an international business in Sweden and set up your own subsidiary there. It’s then your responsibility to hire and pay employees according to Swedish employment law.
This is a costly, complex and time-consuming process. It involves teams of lawyers, travel to and from Sweden and a fair amount of stress.
Luckily, with a PEO in Sweden, you don’t have to go it alone. A PEO like Skuad already has their own legal entity in Sweden, so you don’t have to establish one yourself.
Instead, your PEO acts as an employer of record (EOR), legally hiring and paying Swedish employees on your behalf.
Want to know more about how an EOR works? Check out our handy EOR guide.
Maintain flexibility and reduce risk
Setting up your own Swedish subsidiary is a big commitment – of both time and money. You’ll want to make good on your investment.
That might mean doing business in Sweden over the long term, or hiring a large Swedish team.
But what if that doesn’t fit with your business plans?
What if you want to hire just one star employee in Sweden? Or what if the Swedish market isn’t as good a fit as you’d hoped?
A PEO service gives you the benefits of global expansion, whilst helping you to maintain flexibility and reduce risk.
You can hire as many (or as few) Swedish employees as you like and you can hire in other countries around the world too.
Because you don’t own subsidiaries, you’ll also find it easy to stop doing business in a country if it’s less profitable than you’d like.
Stay a step ahead of your competitors
Working with a PEO helps you to outpace your competitors. That’s because you can:
- Hire the very best global talent – ensure you have the skills you need to push your company forward
- Enter new markets – with the local knowledge and cultural awareness that helps you to capitalize on opportunities
- Save on unnecessary costs – even SMEs get to go global with the help of a PEO
- Maintain your agility – with a PEO you can explore new markets whilst minimizing risk and maintaining your flexibility
There are lots of employment laws and tax requirements to get your head around if you want to employ Swedish talent. Companies who fail to meet the rules face strict fines and penalties.
But compliance issues needn’t keep you up at night.
A PEO service in Sweden will take care of compliance. They’ll have a local Swedish team who can advise you of your responsibilities at every stage of the HR and payroll process.
Here are just a few of the things they’ll be able to tell you about hiring in Sweden:
Payroll in Sweden
The local currency in Sweden is the Swedish Krona (SEK).
There is no national minimum wage in Sweden. Instead, an employee’s trade union will stipulate minimum wages through collective bargaining agreements.
Employees in Sweden are paid monthly, no later than the 25th of each month.
Swedish employees usually work a maximum of 40 hours per week. Any additional hours are paid as overtime at a rate stipulated in the collective bargaining agreement or the employee contract.
Tax and employer contributions in Sweden
Employee tax contributions
In Sweden, national income tax rates for employees are as follows:
- Up to 523,200 SEK (around $54,000 USD) – 0%
- 523,200 SEK and above – 20%
Employees pay additional municipal income tax. Rates vary depending upon which municipality an employer lives in. The average rate of municipal income tax is 32.28%
Employee payroll contributions
Employees must contribute 7% of their salary to cover pension insurance.
Employer payroll contributions
Employers contribute up to 31.42% of an employee’s salary. This covers health, parental and occupational injury insurance, retirement pension and a general payroll tax.
Corporate tax in Sweden
In Sweden, the corporate tax rate is 20.6%.
Paid leave in Sweden
There are 13 paid public holidays in Sweden.
Annual leave: Employees in Sweden are entitled to at least 25 days’ paid holiday per year, once they have worked for an employer for 12 months.
Sick leave: From the 2 to the 14 days of sickness, an employer pays sick pay. From the 15 day onwards, benefits payments are made by social security.
Maternity leave: Women can take 14 weeks’ maternity leave, 7 weeks before the birth of their child and 7 weeks after.
Paternity leave: Fathers are entitled to 10 days paid paternity leave following the birth of a child.
Parental leave: Parents are entitled to 480 days of parental leave. This can be taken by one parent or be split between two parents. Employees are entitled to use this parental leave to reduce their working hours until their child is 8 years old.
Bereavement leave: Employees are entitled to 10 days paid leave following the death of a close family member.
Skuad can take care of all employment law and tax compliance – so you don’t have to. Book a platform demo to find out more
What does it cost to build a team in Sweden?
The cost of building a team in Sweden depends upon which of the following two options you decide to take.
Company incorporation in Sweden
In Sweden, company registration may seem affordable at first glance, but costs can quickly spiral. You have to factor in additional costs such as:
- legal fees
- travel costs
- office space costs
- banking costs
- HR training costs
When figuring out what investment you’ll need to start hiring in Sweden, you should also consider the time it will take to establish a subsidiary and get up to speed with HR and labor law requirements.
Partnering with a PEO in Sweden
When you partner with a PEO in Sweden, you get all the benefits of company incorporation at a fraction of the cost.
PEO pricing varies depending upon the provider and the services you choose. Here at Skuad, prices start from just $199 per employee per month for employer of record services, along with payroll, benefits, onboarding and compliance management.
You can make your first hire for free and get to make global payments free of charge too. You also save a heap of your valuable time because – with the help of Skuad – you can start hiring in Sweden within a matter of days.
Ready to start onboarding and paying employees in Sweden? Schedule a Skuad demo to see what our platform can do for your global expansion plans.