Figuring out compensation and benefits for all your employees is difficult no matter what country you’re in, but the process becomes even more complicated when you incorporate in a new place. Globalization Partners offers both Sweden benefit and compensation outsourcing to help you succeed in a new business climate. We’ll source competitive benefits for your employees to bring in top talent to your company, and we’ll add your employees to our payroll so that they are always paid the correct amount at the right time.
Sweden Compensation Laws
Sweden does not have a statutory minimum wage. Instead, labor unions negotiate minimum wages based on the industry or job type. If a labor union doesn’t cover your employees, you can negotiate a salary in the employment contract. Overtime in Sweden is paid between 50% to 100% of the employee’s usual salary or compensated through paid time off or additional holidays.
Guaranteed Benefits in Sweden
Your Sweden benefit management plan must include both guaranteed and supplemental benefits.
Sweden has 13 public holidays during which employees receive the day off. Your company’s policy or a collective bargaining agreement (CBA) could stipulate additional holidays, such as a half day before a public holiday.
The country also has extensive maternity and paternity leave options guaranteed to employees. An expectant mother receives a minimum of seven weeks of paid leave before giving birth and seven weeks after, and their partner receives 10 days of parental leave around the time of delivery. Both parents can use 480 days of parental leave until the child’s 8th birthday.
Sweden Benefits Management
In addition to the country’s statutory minimums, you should also offer additional benefits that employees may expect. These benefits can boost your standing as an employer and attract top talent to your company.
One common supplementary benefit in Sweden is a private pension scheme. Although the country’s laws do not mandate employers to pay an extra pension, it is becoming a preferred additional benefit.
Many companies will also provide these additional perks:
- Meal vouchers
- Company cars
- Stock incentive plans
- Extra vacation
Sweden benefit management is even easier when you work with a global PEO such as Globalization Partners. We can source the best benefits for your team and will follow all of Sweden’s compensation laws to keep you compliant.
Restrictions for Benefits and Compensation
Most benefits and compensation restrictions result from a CBA. Check for any existing CBAs before drafting an employment contract. The agreement could outline anything from a minimum wage to different working hours depending on your company’s industry. You will need to meet the CBA’s minimums to stay compliant.
Sweden Competitive Benefits Planning
As your company grows in Sweden, one of your requirements is designing employee benefits plans that comply with labor laws, match your available budget, and care well for your employees. With a competitive program, you’ll be able to demonstrate your commitment to supporting your employees and helping them succeed as a part of your team.
Sweden Employee Benefits Plans
As you develop a business strategy in Sweden, you’ll need to create a benefits program that meets your employees’ needs and fits legal requirements and market standards. A strategic program will make your business more competitive in recruiting and hiring. It can also improve your retention rate.
Perhaps more importantly, your benefits plan shows that you value your employees. It rewards them for their hard work and helps ensure that they have coverage and assistance even when faced with an unexpected life event. You can provide a range of supplemental benefits to set your employees up for success, such as:
- Housing and accommodation assistance
- Child care and child education stipends
- Fitness benefits
- Relocation assistance
Requirements for Employee Benefits in Sweden
Swedish law stipulates that all employees must receive these benefits from employers:
- Annual leave of at least 25 days per year
- Parental leave
- Maternity leave
- Sickness leave
- Disability leave
- Educational leave for workers employed for at least six months with your company
- Pension paid through employer’s social security contribution
How to Design Your Employee Benefits Program
In any country where you establish a new business, you’ll find that benefits requirements will differ. However, the basic steps of determining critical needs for your benefits program will remain the same.
1. Determine Your Program Goals and Budget
Your first step in building an employee benefits plan should be to evaluate your company’s goals. You need to know the scope of your program and how you want to use benefits in your overall employment strategy. For instance, if you’ll be employing a large team, you might need to prioritize select benefits over others. On the other hand, if you’re starting with a smaller team and aiming for high retention, you could potentially invest in broader benefits offerings.
As you determine your available resources for your project, discuss objectives with stakeholders and evaluate your budget. The resources you can afford to allocate to benefits will most likely change as your business grows, but setting a realistic budget is critical in these early stages.
2. Assess Employee Needs
As you move forward, you need to understand what benefits matter most to your employees. When you take the time to understand their needs, you can choose high-priority offerings and use your budget more effectively.
To gather information, you might want to conduct interviews with employees in the region or send out questionnaires. You might also research local companies’ benefits offerings during your research to see if you can match them or offer a unique benefit that will help you stand out.
3. Create Your Benefits Program
Once you’ve gathered adequate insights, use them to build an optimized benefits plan. Consider factors such as cost containment features, outsourcing expenses, administration needs, and employee contributions as part of your calculations.
Average Cost of Benefits Per Employee
Your benefits administration expenses will largely depend on the program you develop. As you create your plan, focus on your budget rather than on the national average cost.
How to Calculate Employee Benefits
You can consult Swedish labor laws for specific rates for employee benefits such as sick leave and maternity leave.
For mandatory employee pensions, you must contribute 7 percent of worker salaries to the system. You can calculate the cost of any supplemental benefits based on competitive rates in your region and industry.
How Are Employee Benefits Taxed in Sweden?
As an employer, you must report all benefits and gifts you provide your employees. All social security contributions are subject to tax deductions. In general, other benefits are considered fully taxable unless they are specifically exempt in Swedish tax codes.
You can identify the correct income tax rates for each employee by consulting the national tax administration.
Employee Health Benefits Plans
Sweden’s social security system provides health benefits for all employees, and most employers do not need to offer supplemental health care coverage options. However, you are responsible for contributing an employer’s share of the social security payments to cover these employee benefits.
Streamline Benefits Planning With Globalization Partners
Work with Globalization Partners for seamless international growth. Request a proposal to learn more.
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.
