Looking to grow your company? Hiring international employees can give you access to cost-effective, skilled talent to benefit your team.
Hiring from Sweden gives you access to a talented workforce. The talent pool in Sweden is not only deep but is also quickly specializing in tech skills. As such, this Northern European country is an ideal choice if you’re looking to grow your team worldwide.
Of course, you’ll need to understand the costs of hiring in Sweden beyond salaries. This includes benefits, bonuses, payroll, and taxation.
In this article, we’ll break down the cost of hiring talent from Sweden and look at how much you can expect to spend per hire.
Swedish Hiring Costs
As an employer, you’ll need to fulfill a few essential payment obligations. These include:
- Payroll (gross salaries)
- Tax payments and withholding
- Statutory benefits
- Paid leave
- Overtime
- Severance pay
To make your hiring offers more attractive to prospective employees, it’s always helpful to include bonuses and if possible, “fringe benefits.” The latter could include pay-in retirement plans, health insurance, meal subsidies, or other extras that go above and beyond an employee’s basic salary.
Required Costs of Hiring an Employee in Sweden
Swedish Gross Salary
Sweden has no minimum wage. Instead, standard best practices for employee payment are determined by collective bargaining agreements.
Sweden Work Bonuses
Work bonuses are not mandatory in Sweden, but employers can provide compensation like 13th-month pay if they choose to. To remain competitive, it is a good idea to research whether bonuses are industry standard in the sectors you hire from.
Sweden Government Fees and Taxes
Most Swedes pay only local income tax at rates between 28.98% and 35.15%. An additional 20% state tax is levied on earners who make above a certain rate, set by the Swedish Tax Agency.
Sweden also has a corporate income tax of 20.6% in place for businesses and employers to pay.
Benefit Payments and Social Security
Sweden has a government agency called the Social Insurance Agency (Försäkringskassan) that provides social benefits to eligible citizens and workers.
The Social Insurance Agency provides relief for those who are:
- Impacted by disability or illness
- Elderly
- Families with children
Social Insurance does not cover healthcare or unemployment.
Swedish employers or employers with a Permanent Establishment in Sweden pay 31.42% of the total taxable income as social security, and employees pay 7%.
Overtime pay
The Working Hours Act generally covers Swedish employees, although in certain circumstances, contracts can state that collective agreements take precedence over the act as a whole or in part.
The Working Hours Act in Sweden lists no mandatory overtime pay rate. Contracts and collective employment agreements generally determine this rate. As a standard, compensation should usually amount to a 50%-100% increase on top of an employee’s regular daily pay.
Severance pay
There is no legally mandated severance payment under Swedish law. If severance is to be offered, it must be outlined in the employment contract upon hiring.
Optional Remote or Office Working Costs
Does your remote Swedish team need digital hardware or software set up? If you bring on team members remotely, you may have added costs like high-speed internet service, upgraded electronics, printers, or higher-volume servers.
Swedish is Sweden’s official language, but around 85% of Swedes consider themselves proficient English speakers. English is taught and prioritized in Swedish primary schools, so you shouldn’t have to worry about language barriers with your new Swedish hires. That being said, it is good to consider translation requirements when hiring from other European countries.
Are you looking to hire a large number of Swedish workers? If there’s a significant team, it could be worth investing in an office or co-working space, so your team can access the technologies they needy and build connections with their coworkers.
Total Cost of Hiring
Let’s say you wanted to hire an employee in Laos at a salary of 100,000 USD (1,080,140 SEK).
- Salary: $100,000 Gross pay
- Employer social security contributions: USD 31,420 (339,379.99 SEK)
- Bonuses and other costs: Not applicable
- Total: USD 131,420 (1,419,519.99 SEK)
Note that this is a minimum payment. Generally, you will attract higher-skilled and competent candidates by including bonuses or other paid benefits.
How Borderless Can Help
Although it can seem like all these costs add up quickly, we want to make your hiring process stress-free. Onboarding your new Swedish team should feel like a breeze. It’s an investment, but it’s a major step for your company that you deserve to feel confident about.
At Borderless, we help you hire employees from Sweden and over 150 different countries if you are looking to grow your team. Book a demo to see how we’ll help you hire top global talent quickly and compliantly.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
