Employer of Record Guide in 

Sweden

Vacation Leave

Sweden provides generous vacation entitlements under the Annual Leave Act:

• Standard entitlement: 25 working days (5 weeks) per year
• Accrual: Earned during the "leave year" (April 1 - March 31)
• Usage: Taken during the "holiday year" (following April 1 - March 31)
• Summer holiday: Right to 4 consecutive weeks during June-August
• Holiday pay: 12% of previous year's gross salary

Extended entitlements:

• Some collective agreements provide 30 days (6 weeks)
• Additional days may be earned through seniority or agreement

Sick Leave

Sweden's sick leave system combines employer and state responsibility:

Payment structure:

• Day 1: Unpaid (waiting day/karensdag)
• Days 2-14: Paid by employer at 80% of salary
• Day 15+: Paid by Försäkringskassan (Social Insurance Agency) at 80%

Medical certification:

• Days 2-7: Self-certification allowed
• Day 8+: Medical certificate required
• Long-term: Regular medical reviews required

Maternity Leave

• Duration: 60 days around childbirth (can start 60 days before due date)
• Payment: 80% of salary through parental insurance
• Job protection: Position guaranteed upon return
• Flexibility: Can be combined with parental leave

Parental Leave

Sweden offers one of the world's most generous parental leave systems:

• Total days: 480 days (approximately 16 months) per child
• Sharing: Can be shared between parents
• Reserved days: 90 days reserved for each parent (non-transferable)
• Payment levels:
  • Days 1-390: 80% of salary (up to ceiling)
  • Days 391-480: Flat rate (180 SEK/day)
• Flexibility: Can be taken until child turns 12

Bereavement Leave

• Duration: Reasonable time off for funeral arrangements and grieving
• Payment: Typically paid, but not legally mandated
• Scope: Usually covers immediate family members
• Collective agreements: May provide more specific entitlements

Personal & Family Leave

• Temporary parental benefit (VAB): 120 days per year to care for sick children under 12
• Contact days: 10 days per year when child is seriously ill
• Care leave: Time off to care for seriously ill relatives
• Study leave: Right to educational leave in some circumstances

Summary

Termination Types

Termination for Cause (avsked):

• Requires serious breach of employment duties
• Examples: theft, violence, serious insubordination, criminal activity
• No notice period required
• High burden of proof on employer

Termination for Business Reasons (uppsägning):

• Due to redundancy, reorganisation, or economic difficulties
• Must follow "last in, first out" principle (LAS - Employment Protection Act)
• Requires proper notice and consultation
• Must offer re-employment if similar positions become available within 9 months

Termination for Personal Reasons:

• Due to employee's inability to perform duties
• Requires extensive documentation and support efforts
• Must prove employee cannot fulfill role despite assistance

Notice Period Requirements

Notice periods under the Employment Protection Act (LAS):

For employees:

For employers terminating employees:

• Same periods as above, but minimum 1 month regardless of tenure
• Additional protection for employees over 45 (extended notice periods)

Severance Pay

• Not mandatory: Swedish law does not require severance payments
• Collective agreements: May include severance provisions
• Negotiated settlements: Common in senior positions or difficult terminations
• Age-related: Some agreements provide enhanced terms for older employees

Probationary Periods

• Maximum duration: 6 months
• Shorter notice: During probation, notice period is typically 2 weeks for both parties
• Same protections: Anti-discrimination laws still apply during probation
• Documentation: Reasons for termination during probation must still be documented

Final Pay Requirements

• Timing: Final salary and accrued benefits must be paid by normal pay date
• Components: Include unused vacation pay, overtime, and any contractual benefits
• Deductions: Only legally permitted deductions allowed
• Documentation: Provide detailed breakdown of final payment

Legal Protections

Employment Protection Act (LAS) provides:

• Protection against unfair dismissal
• "Last in, first out" redundancy rules
• Right to union representation in termination discussions
• Re-employment rights for redundant employees

Anti-discrimination protections:

• Cannot terminate based on gender, age, ethnicity, religion, disability, sexual orientation
• Pregnancy and parental leave provide additional protection
• Union activity and whistleblowing are protected

National Public Holidays

Sweden observes 13 national public holidays:

Regional Variations

• Midsummer: Celebrated nationwide but dates vary slightly
• Local saints' days: Some municipalities observe additional local holidays
• Industry-specific: Some sectors have traditional closure days

Holiday Pay Rules

Eligibility:

• All employees entitled to holiday pay
• No minimum service period required
• Part-time employees receive proportional pay

Payment rates:

• Working on holiday: Double pay plus day off in lieu (or triple pay)
• Holiday falling on weekend: Substitute day off provided
• Holiday during vacation: Additional vacation day granted

Cultural Observances

Summer closure period:

• Many businesses close for 2-4 weeks in July
• "Industrial vacation" tradition in manufacturing
• Reduced business activity throughout summer

Christmas/New Year:

• Extended closure period common (December 23 - January 2)
• Skeleton staffing in essential services only

Required Documents for Employment

Employment contract must include:

• Job title and description
• Salary and benefits
• Working hours and location
• Notice periods
• Vacation entitlement
• Collective agreement applicability

Employee documentation:

• Personal identity number (personnummer): Essential for all employment
• Tax card (skattekort): From Skatteverket (Tax Agency)
• Bank account details: For salary payments (Swedish bank preferred)
• Work permit: For non-EU citizens
• Educational certificates: If required for role

Work Authorization

EU/EEA citizens:

• Right to work immediately
• Must register with authorities if staying over 3 months

Non-EU citizens:

• Work permit required before starting employment
• Employer must apply on employee's behalf
• Process can take 2-4 months
• Specific salary and qualification requirements apply

Background Checks

Permitted checks:

• Criminal record (belastningsregister): For certain roles only
• Credit check: For financial positions with written consent
• Reference checks: Standard practice
• Educational verification: Common for professional roles

Restrictions:

• Must be relevant to position
• Requires employee consent
• Subject to GDPR and data protection laws

Data Protection Compliance

GDPR requirements:

• Explicit consent for data processing
• Clear privacy policy provided
• Data minimisation principles
• Right to access and deletion
• Secure data storage and transfer

Employee rights:

• Access to personal data held by employer
• Right to correct inaccurate information
• Right to data portability when leaving

Language Requirements

• Swedish proficiency: Not legally required but practically necessary for most roles
• English: Widely spoken in international companies
• Contract language: Must be in Swedish unless employee agrees to English
• Safety information: Must be provided in language employee understands

Onboarding Timeline

What the EOR Handles

Borderless AI manages:

• Employment contract preparation and compliance
• Tax registration and payroll setup
• Work permit application support
• GDPR compliance documentation
• Integration with Swedish authorities (Skatteverket, Försäkringskassan)
• Local language contract preparation

Worker Classification: Employee vs. Contractor

Swedish law strictly distinguishes between employees and independent contractors, with significant legal and tax implications.

Employee characteristics:

• Works under employer direction and control
• Uses employer's tools and equipment
• Integrated into business operations
• Regular salary and benefits
• Subject to employment protection laws

Contractor characteristics:

• Independent business operation
• Own tools and equipment
• Invoice for services (F-skatt registration required)
• Bears business risk
• No employment law protections

Misclassification risks:

• Back payment of social contributions
• Employment law protections apply retroactively
• Tax penalties and interest
• Potential discrimination claims

Collective Agreements and Unions

Sweden has one of the world's highest union membership rates (approximately 70%).

Key features:

• Ghent system: Unions administer unemployment insurance
• Collective agreements: Cover wages, working conditions, and benefits
• Sectoral bargaining: Industry-wide agreements common
• Co-determination: Employee representatives on company boards
• Strike rights: Legal right to strike with proper notice

Major union confederations:

• LO: Blue-collar workers
• TCO: White-collar employees
• SACO: Professional and academic employees

Cultural Norms & Work-Life Balance

Swedish workplace culture emphasises equality, consensus, and work-life balance:

Key characteristics:

• Flat hierarchies: Informal communication styles
• Consensus building: Decisions made through discussion
• Punctuality: Meetings start and end on time
• Fika: Coffee break culture for team building
• Parental leave: Both parents expected to take leave
• Flexible working: Remote work and flexible hours common

Remote Work Considerations

Remote work is well-established and legally supported in Sweden:

Employer obligations:

• Equipment provision: Laptop, phone, ergonomic furniture
• Internet allowance: Contribution to home internet costs
• Health and safety: Ensure safe home working environment
• Working time: Same overtime and rest period rules apply
• Tax implications: Home office deductions may apply

Cross-border considerations:

• Tax residency: Extended remote work abroad may affect tax status
• Social security: Coordination rules for EU countries
• Work permits: May be required for non-EU remote workers

Seasonal Employment Patterns

Summer impact:

• Reduced productivity during July vacation period
• Planning required for coverage during industrial vacation
• Hiring often pauses during summer months

Winter considerations:

• Shorter daylight hours affect productivity
• Higher sick leave rates during winter months
• Seasonal Affective Disorder (SAD) awareness important