🇸🇪 Hiring in Sweden

💡 Everything you need to know to hire and manage employees in Sweden through Toku. Toku handles payroll processing, tax withholding, social contributions, and statutory compliance. This guide covers what you need to plan costs and manage your team.

At a Glance

Onboarding a New Hire

Plan for 5-7 business days between submitting a new hire and their start date. Toku registers the employment with the Swedish Tax Agency, and if your hire doesn't yet have a Swedish personal number, they will need a coordination number, which Toku helps arrange. Collective agreements typically govern pension and insurance terms in Sweden, and Toku confirms what applies during setup.

Submit the new hire through the Toku platform for the employment agreement, statutory registrations and payroll setup. See Onboard Contributors as a Client Admin in Toku for the steps. Toku will confirm the expected onboarding timing for your hire.

Employer Costs

On top of gross salary, employers in Sweden pay a flat social contribution (arbetsgivaravgifter) of 31.42%:

As a rule of thumb, total cost of employment is roughly 131-132% of gross salary. If an occupational pension (tjänstepension) applies, typically through a collective agreement, that adds to the total, and pension contributions attract a special wage tax of 24.26%. There is no 13th month salary in Sweden, but note that holiday pay (12% of annual gross salary) is paid out when employees take annual leave.

Employees pay their own share too: municipal income tax of roughly 29-35% depending on where they live, state income tax of 20% on earnings above SEK 643,000 per year, and a 7% general pension contribution that is fully offset by a tax reduction. These are withheld from gross salary, not charged on top. Toku calculates and remits all of the above.

Compensation & Payroll

Toku runs one payroll per month in Sweden, and employees receive a payslip (lönespecifikation) each cycle showing gross pay, deductions, and net pay. Sweden has no statutory minimum wage: pay floors are set by collective agreements, which typically range from SEK 24,000 to SEK 28,000 per month depending on industry and experience. Salaries are paid in SEK by bank transfer.

Employment Contracts & Probation

• Toku issues a compliant local employment agreement for every hire.
• Indefinite-term employment is the default under the Employment Protection Act (LAS). Fixed-term contracts are allowed but convert automatically to indefinite employment once the employee has worked more than 12 months within a five-year period.
• Roughly 90% of Swedish employees are covered by collective agreements, which often set pay, pension, and insurance terms above statutory minimums.
• Probation is 6 months per Toku's employment agreement, in accordance with the Employment Protection Act. During probation either party may end the employment, with the employer giving at least two weeks' notice before the probation period ends if it will not continue.

Working Hours

The standard working week is 40 hours, typically Monday to Friday. Overtime is capped at 48 hours per 4-week period, 50 hours per calendar month, and 200 hours per calendar year (with up to 150 additional hours in exceptional circumstances). There is no statutory overtime rate: compensation follows the applicable collective agreement or the employment contract, with 150% for the first hours and 200% thereafter being typical. Employees are entitled to 11 consecutive hours of daily rest and 36 consecutive hours of weekly rest.

Leave Entitlements

Parental leave is funded by the state, and 90 of the 480 days are reserved for each parent and cannot be transferred. Employees are entitled to at least four consecutive weeks of vacation during June through August unless otherwise agreed, and unused vacation days can be saved for up to five years.

Public Holidays (2026)

Sweden observes 13 public holidays in 2026. Holidays falling on a weekend are not moved to another day.

Midsummer Eve (June 19), Christmas Eve (December 24), and New Year's Eve (December 31) are de facto holidays when most businesses close, even though they are not official public holidays.

Benefits: Required vs. Common Extras

Statutory (included in employer costs above): Sweden's social insurance system provides universal healthcare, parental insurance, sickness benefits, occupational injury insurance, and the national pension. Employees are covered automatically through the employer contributions Toku remits.

Through Toku you can add supplemental health coverage via Remote Health, a private health insurance plan that gives your team faster access to specialist care on top of the public system.

Other common extras include occupational pension plans (typically 4.5-30% of salary depending on income and agreement), group life insurance, income protection insurance, and a wellness allowance (friskvårdsbidrag, tax-exempt up to SEK 5,000 per year). Toku can advise on the cost impact of any of these.

Ending Employment

Employer-initiated dismissal generally requires objective grounds, such as redundancy or personal reasons. Union notice or consultation may be required depending on the circumstances and applicable agreements. Involve Toku early to confirm the procedure before acting. For the process, see How to Terminate an Employee or Contractor.

Employees who resign must give at least 1 month's notice regardless of tenure. Sweden has no statutory severance pay, but wrongful dismissal can result in damages of up to 32 monthly salaries, and redundancies must follow redeployment and last-in-first-out rules, which is why early planning with Toku matters.

Annual Leave at Termination

This section describes statutory annual leave. Any additional contractual or company-provided leave above the statutory minimum may follow different carryover, expiry, or payout rules under the employee's agreement or applicable policy, subject to local law.

Statutory leave termination payout: Generally required. Unused earned holiday entitlement is generally paid as holiday compensation when employment ends.

Statutory carryover / look-back: Employees can save qualifying paid vacation days for future years, with the existing guide noting saved vacation can generally be retained for up to five years.

Admin responsibility: Track saved vacation separately from current-year leave so long-standing balances remain visible and can be planned for before a termination.

Important exceptions: Collective agreements can affect holiday-pay and saved-leave mechanics. Toku should reconcile current and saved entitlement before final amounts are communicated.

See the Annual Leave / PTO Carryover & Termination Payout Guide for the cross-country framework.

Hiring Someone from Overseas?

EU and EEA citizens can work in Sweden without a permit. Other nationals need a work permit from the Swedish Migration Agency: the role must be advertised in the EU/EEA for at least 10 days, terms must match collective agreement standards, and from June 2026 the salary must be at least 90% of the Swedish median (SEK 34,470 per month). Processing typically takes 1-4 months. Talk to Toku before extending an offer to a candidate who needs sponsorship.

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Last updated November 5, 2026 (onboarding link, annual leave and termination guidance only). Last verified July 2026. This guide is for general information and doesn't constitute legal or tax advice. Your Toku account manager can confirm specifics for your situation.