Sweden offers international employers a compelling mix: a well-educated, English-proficient workforce and strong talent in tech, finance, and business operations. The country’s labor protections and social systems are among the most comprehensive in the world. That structure translates to stability, but it also adds complexity, especially if you’re hiring without a local entity.
But with an employer of record (EOR) in Sweden, you can expand into Scandinavia with confidence and ease. In this guide, we’ll tell you what you need to know about hiring in Sweden and how an EOR can help you do it right.
Hiring in Sweden using an EOR
Hiring employees in Sweden involves a laundry list of compliance regulations, from drafting employment contracts and running payroll in Swedish krona (SEK) to contributing to social security and honoring collective agreements. Involved? Yes. Doable? Absolutely—with an employer of record to simplify the process.
In Sweden, an EOR acts as the legal employer on paper. It handles the employment contract, compensation, statutory benefits, and compliance with Swedish employment law. Meanwhile, you’re in charge of defining the employee’s role and day-to-day responsibilities.
While a professional employer organization (PEO) might seem similar to an EOR, it acts as a co-employer and hence requires your company to set up a local entity. An EOR removes that barrier, so you can start hiring in Sweden faster and with minimal effort.
Things to know before hiring in Sweden
Building a team in Sweden means working within one of the world’s most employee-centered systems. From collective agreements to strong workplace protections, Swedish labor law sets clear expectations for employers.
Here are five things every employer should understand about Swedish labor law to move forward with confidence and stay compliant along the way:
1. There’s no national minimum wage
Sweden doesn’t set a statutory minimum wage. Instead, industry-specific unions negotiate collective bargaining agreements that define minimum salary levels, working hours, and overtime pay. While not technically mandatory, most employers follow them as a baseline.
2. Employment agreements are a legal must
If someone in Sweden works for your company for over three weeks, you must provide a written employment contract. It should clearly state the job title, responsibilities, start date, working hours, gross salary in SEK, probationary period, and notice period. Fixed-term contracts automatically become indefinite if they last beyond two years.
3. Overtime is capped and must be compensated
Sweden enforces a 40-hour workweek. The law doesn’t mandate premium pay for overtime, but many collective agreements offer a 50–100% higher rate of pay for overtime hours. Legal caps limit overtime to 48 hours over four weeks or 50 hours per month, with a yearly cap of 200 hours.
Sweden’s workplace norms emphasize balance. Labor laws require daily and weekly rest periods and protect time off. Remote work is common, but the culture encourages boundaries and supports the employee’s right to disconnect.
4. Employers fund key benefits
Employers contribute 31.42% of each worker’s gross salary toward payroll taxes, which fund benefits like pensions, social insurance, and healthcare. Sweden has no centralized HR system, but compliance expectations are high, especially regarding government-backed worker benefits.
5. Termination requires a clear process
In Sweden, termination rules are strict. Employers must provide valid reasons and follow the terms of the employment contract or the relevant collective agreement. Notice periods range from one month to six months depending on tenure and collective agreements. Swedish employers aren’t legally required to provide severance pay, but they may offer it through a collective agreement or a negotiated departure. Employers must also provide notice pay for the full duration of the notice period.
Benefits of hiring in Sweden
When you hire employees in Sweden, you gain access to a highly skilled workforce that’s rooted in strong institutions and progressive employment standards. Here are a few standout advantages of growing your team in Sweden:
- Skilled, multilingual talent pool: Sweden ranks high in education, tech adoption, and English proficiency. Its workforce is digitally fluent, globally minded, and ready to contribute to your company’s success from day one.
- Strong labor protections that support retention: Swedish labor law promotes job security and stability. Clear notice periods, well-defined contracts, and generous leave policies help foster long-term loyalty and reduce attrition.
- Business-friendly environment: Sweden’s well-developed digital infrastructure, transparent legal system, and open trade policies make it one of the most business-friendly countries in Europe. It’s ideal for global companies looking for stable, scalable growth.
- Universal healthcare and generous leave policies: Employees in Sweden benefit from state-funded healthcare and robust social programs. Parental leave includes up to 480 shared days—paid by the Swedish Social Insurance Agency, not the employer.
- Competitive salaries by regional standards: Sweden’s compensation levels attract top talent, but for many employers, they’re more accessible than in many larger Western European markets. You can offer strong, appealing pay while keeping budgets in check.
- A natural fit for distributed teams: With its reliable digital infrastructure and well-established norms around work-life balance, Sweden makes it easy for global teams to collaborate consistently and productively across borders.
Employment agreements in Sweden
In Sweden, oral employment agreements are legally valid. But, as previously mentioned, if someone will be working for more than three weeks, the employer must provide written terms within seven calendar days of the start date. This written summary forms the legal foundation of the working relationship and keeps things clear for both the employer and employee.
Within the first month of employment, employers must also share additional details, such as whether a collective bargaining agreement applies, what training is available, and any probation period terms.
Most Swedish employers default to indefinite contracts unless they say otherwise. The most common fixed-term contract—special fixed-term employment (särskild visstidsanställning, or SÄVA)—automatically becomes indefinite if it runs longer than 12 months in a five-year span. Substitute contracts convert after 24 months during that same period.
- Start date and contract length: The agreement must include the employee’s start date and state whether the role is fixed-term or indefinite. Unless the contract specifies a fixed term, Swedish law treats the contract as indefinite by default. If a fixed-term contract lasts longer than two years, it automatically converts to an indefinite one.
- Job title and responsibilities: The contract should name the employee’s role and briefly describe what they’ll be doing. This keeps expectations clear and helps with future performance reviews.
- Work location: Whether the employee works from an office, at home, or in a hybrid setup, the agreement must specify their primary work location. If flexible or remote work is an option, the contract should spell that out as well.
- Salary and payment details: Employers must state the worker’s gross salary in SEK and explain how often they’ll pay them (usually monthly). Employers should also include any bonuses, benefits, or other forms of compensation.
- Working hours and overtime conditions: Swedish law limits the workweek to 40 hours, with required rest periods. Employers must clearly define overtime terms in the contract, including how they track and approve it.
- Notice periods for termination: Both the employer and employee must follow specific notice periods when ending the contract. The length can vary based on how long the employee has worked and what’s in the collective agreement.
How much does it cost to hire in Sweden?
The cost of hiring in Sweden goes well beyond the employee’s salary, as employers must also cover social contributions (again, 31.42% of the employee’s wage). But in some cases, lower rates apply, such as for older employees, foreign employers without a permanent establishment in Sweden, or businesses that are eligible for Sweden’s Growth Support initiative, administered by Tillväxtverket (the Swedish Agency for Economic and Regional Growth).
Employers are also expected to follow collective bargaining agreements, which often include benefits like healthcare, paid time off, and overtime pay.
An employer of record (EOR) simplifies these obligations. Most EORs charge a flat monthly fee per employee that bundles onboarding, employment contracts, payroll, tax filings, and compliance.
While the cost may seem steep at first, partnering with an EOR that already has a local entity in Sweden can reduce overall costs. You avoid legal setup fees, lighten your internal HR load, and lower the risk of noncompliance with Swedish labor and tax laws.
Seamlessly hire talent in Sweden with Oyster
Growing your staff in Sweden doesn’t have to involve legal hurdles or administrative headaches. With Oyster as your employer of record, you can recruit, hire, compensate, and support team members with ease while staying compliant with Swedish labor laws.
Oyster simplifies every step, from drafting legally compliant employment agreements to managing payroll, benefits, and notice periods. You maintain day-to-day oversight while we handle the complexity behind the scenes.
When you’re ready to scale internationally with confidence—into Sweden, one of its Scandinavian neighbors, or 180+ other countries—Oyster is ready to help you hire with speed and ease.
Book a demo to learn more.
About Oyster
Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.
