Businesses hiring global talent often flock to Sweden when they’re in their growth phase. And that’s a good move in many cases, considering that the country is chock full of talented workers who are no stranger to innovation or secondary education. On top of that, they also know their way around remote or otherwise unconventional working arrangements. 

There are many “T”s to cross and “I”s to dot before starting the hiring process – but among the most important is learning about Sweden employee benefits according to labor laws. Doing so will help you avoid potentially costly legal issues and tailor your benefits plan in a way that attracts your ideal candidates. 

By the end of this guide, you’ll know the basics of mandatory Sweden employee benefits, add-on perks, and more. The knowledge you’ll gain below will be helpful as you’re drafting your employee benefit plans for Swedish employees. 

Where to Find Information About Swedish Employee Benefits

You won’t find Swedish employee benefits legislation in a single document. They’re spread out over several pieces of legislation targeting specific work situations and processes, including: 

In addition to the above acts, the Swedish government has published several explainer documents on topics like: 

You’ll also find helpful information about Swedish employee benefits on the European Commission website. 

Mandatory Employee Benefits in Sweden

As an international employer hiring Swedish employees, you will be expected to abide by any applicable labor laws and regulations in the country. Many mandatory employee benefits in Sweden come into play when hiring talent in the country:

Parental Leave

Employers have to allow 240 days of parental leave for each Swedish employee. This leave allows workers to care for their children without work-related stress or obligations. Throughout parental leave, the employee should be paid according to their sickness benefits through social security. There are very specific stipulations surrounding this benefit.

If you want to learn more about leaves and other social security benefits, you can check this resource to learn more.  

Pension

In Sweden, the pension acts like social security and covers several sub-benefits ranging from housing support to workers’ comp to retirement savings and more. Here’s the full list: 

  • Retirement Savings: When your employees reach old age (62 and up, usually) and are proven to be eligible, they can access their pension benefits. They can continue to work while receiving pension benefits.
  • Survivor’s Pension: When an employee passes away, their loved ones may be able to receive financial support from the national pension system.
  • Premium Pension: The employee makes regular contributions to the premium pension. The employee chooses where this money goes. 2.5% of the employee’s salary should be allocated monthly.
  • Income Pension: This is a substantial part of the pension – 16% of the employee’s income is allocated to it. The income pension funds go to the employee after they retire.
  • Income Pension Complement: This is an add-on to an employee’s income pension. They can dip into this money as needed if they reside in Sweden, Switzerland, or other countries in the EU/EEA.
  • Guarantee Pension: This pension is for employees who have had financial issues throughout their life.
  • Occupational Employer Pension: Employers pay toward this pension plan if their employees have worked in Sweden. It has healthcare provisions that can be used if an employee develops an illness.
  • Housing Supplement or Financial Support for the Elderly: This part of the pension can be used to help employees secure housing. It’s only for Swedish residents who have a low pension.

To help fund these pension accounts, employers contribute about 31% of the employee’s salary total. You can read more about pensions in Sweden here. 

Annual Leave and Holidays

The Annual Leave Act states that employees may receive 25 days of leave per year. If an employee wasn’t hired until after August 31st during the annual leave year, they only get 5 days of leave. Very short-term working arrangements (such as those slated to last for only 3 months) are excluded from the vacation leave requirement. Employees have to take at least 20 days of annual leave during a given year.

Annual Leave Aspect Leave Details
General Annual Leave Entitlement 25 days per year (5 days for new hires starting after August 31st)
Annual Leave for Short-Term Employment (3 months or less) No vacation leave minimum.
Minimum Leave Usage 20 days

Per this same act, public holidays, Midsummer’s Eve, Christmas Eve, and New Year’s Eve are all to be treated as Sundays. Employees don’t have to work on these days unless there’s an exception.

See the third paragraph in Section 9 of the Annual Leave Act for more information. 

Sick Leave

Whenever an employee is no longer able to work due to sickness, they are typically entitled to compensation for the entire duration of their sickness. However, to receive benefits, they must meet strict requirements laid out by Swedish officials. Employees may be privy to several types of benefits: 

  • Employer-provided sick pay: For the first 14 days of illness, the employer is required to pay 80% of the employee’s wage. There’s a cap of SEK 725 per day. After a week of being sick, the employee has to submit a doctor’s note. 
  • Sick pay cash from Swedish Social Security: After those first 14 days of sickness, sick pay will come from Swedish Social Security. The amount of sick pay the worker receives depends on their specific sickness benefit through Försäkringskassan. 

You can learn more about sickness benefits by visiting this European Commission resource. 

Working Hours and Overtime

According to the Swedish Working Hours Act, employees aren’t allowed to work longer than 40 hours per week. However, there are certain situations where the employee may work up to 50 hours per calendar month. And working hour limits don’t apply to all workers – those in management positions, for example. 

Occupational Injury Insurance/Workers’ Comp Insurance

Should an employee be injured on the job, they may be entitled to compensation, payment while healing, and more. Employers have a couple of responsibilities to fulfill in the event of a worker’s on-the-job injury, and they include: 

  1. Reporting the injury to Försäkringskassan as soon as possible. You can find out how to report the incident here. Translate the page to your preferred language using your browser settings. 
  2. Telling your safety officer that you’ve reported the incident. If you don’t have a safety officer, you don’t have to complete this step. 

Supplementary Sweden Employee Benefits

After getting a good handle on mandatory Swedish employee benefits, feel free to turn your attention to supplementary (or add-on) benefits. Here are some supplementary Sweden employee benefits to include in your benefits package: 

  • Private health insurance to supplement the national insurance coverage your employees automatically get. 
  • Leave allotments that go beyond the law’s mandated minimums. 
  • Higher overtime pay than you are legally obligated to offer. 
  • Programs and discounts for financial health.
  • Extended annual leave. 

Building a Swedish Employee Benefits Plan

Ready to start building your Swedish employee benefits plan? You’ve got all the basic information you need to do so. Here are some steps to be sure to follow throughout the process: 

  • Read pertinent Swedish labor laws very closely for compliance purposes. There’s no better source of law information than the laws you’ll find on the Swedish government website. If you’re not well-versed in international labor law, enlist the help of a lawyer who is. They are standing by to help you sort through the legal jargon and achieve a solid understanding of what’s expected from you. 
  • Note all of the mandatory employee benefits in Swedish – those that would apply directly to your company and the candidates you’re looking to hire. What you’ll find after looking into the labor laws in Sweden is that there are many exceptions and special rules to abide by. Again, reach out for help any time you’re unsure of how to interpret a law or apply it to your case. 
  • Talk to any parties in Sweden that you’d be expected to interact with for employee benefits purposes. Confirming details surrounding the employee signup process and getting clarity on vague areas would be helpful.  
  • Do some research on the Swedish workforce and find out what makes them tick. Then, think about which add-on benefits would work best for the employees you’re looking to hire. Consider the type of job you’re hiring for, workers’ cultural preferences and norms in the country, and more. It’d also be helpful to forecast the financials for each of these benefits to ensure they’re economically feasible. Add any supplementary benefits to the package. 
  • Draft, finalize, and save your employee benefits package. Then, update it as needed based on employee feedback or labor law updates. 

Along the way, you could run into roadblocks that PEOs and EORs can help with. Be sure to check out these resources as well. 

So, there you have it – everything you need to know about employee benefits in Sweden. We hope you found all the information you were looking for, and we wish you the best with your Swedish expansion plans.