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Payroll Information

Payroll Cycle

In Sweden, the standard payroll cycle is monthly. Wages are typically paid on the 25th of the month, but this can vary depending on the employer.

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Employment Law

Swedish employment law is highly regulated and provides extensive protections for employees. The Swedish Work Environment Authority oversees employment laws and regulations. The most important regulations that employers need to be aware of include:

1. Employment Protection Act: This act governs employment contracts, notice periods, and termination of employment. It provides extensive protections for employees, including requirements for just cause when terminating an employee.
2. Working Hours Act: This act regulates working hours and rest periods. The standard workweek is 40 hours, and overtime is limited to 48 hours per week.
3. Parental Leave Act: This act provides extensive rights for new parents, including the right to take paid parental leave for up to 480 days per child.
4. Discrimination Act: This act prohibits discrimination on the basis of gender, ethnicity, age, sexual orientation, and other factors.

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Employment Contract

In Sweden, all employees are entitled to a written employment contract. The contract must include information such as the start date, job title, salary, and notice period. The notice period can vary depending on the length of employment, but it is typically one to six months.

The employment contract can be either fixed-term or indefinite. Fixed-term contracts can be used for temporary or project-based work, but they cannot be used to circumvent employment protections.

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In addition to the employment contract, employers are required to provide employees with a statement of employment conditions, which includes information on working hours, paid leave, and other benefits.

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Probation Period / Trial Period

In Sweden, employers may choose to have a probationary period for new employees. The maximum length of a probation period is six months for indefinite contracts and up to two years for fixed-term contracts. During the probationary period, the employment can be terminated without a notice period or severance pay.

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Working Hours

The standard working hours in Sweden are 40 hours per week, with 8 hours per day. However, some sectors and industries may have different working hours. Swedish law requires employees to have at least 11 hours of uninterrupted rest between working days and at least 36 hours of rest per week.

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Overtime

Swedish law limits the amount of overtime that can be worked to 48 hours per week. Overtime pay is usually calculated at 50% above the regular hourly rate. However, some collective bargaining agreements may have different overtime pay rates.

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Bonus

Bonuses are not required by law in Sweden, but many employers offer them as a way to reward employees for their performance. The terms of bonuses should be included in the employment contract or a separate bonus agreement.

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Termination

The termination of employment in Sweden is regulated by the Employment Protection Act. The employer must have a valid reason to terminate an employee, such as redundancy, poor performance, or misconduct. The employee has the right to appeal the termination, and the burden of proof is on the employer to show that the termination was justified.

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Notice Period

The notice period for termination varies depending on the length of employment, and ranges from one to six months. During the notice period, the employee is entitled to their regular pay and benefits.

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Redundancy / Severance Pay

If an employer needs to reduce the number of employees due to operational reasons or financial difficulties, they must follow a specific process outlined in the Employment Protection Act. This includes consulting with the employees and their representatives, offering re-employment opportunities, and providing notice and severance pay. The terms of redundancy should be outlined in the employment contract or collective bargaining agreement.

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Maternity Leave

In Sweden, pregnant employees are entitled to 16 weeks of paid maternity leave. The leave can be taken starting no earlier than 60 days before the expected due date. During maternity leave, the employee is entitled to 80% of their regular salary, up to a maximum amount set by law.

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Paternity Leave

Fathers in Sweden are entitled to 10 days of paid paternity leave, which can be taken during the child's first 60 days of life. In addition, fathers can take up to 90 days of paid parental leave, which is described below.

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Parental Leave

Swedish law provides extensive rights for parents to take time off work to care for their children. Parents can take up to 480 days of paid parental leave per child, which can be split between both parents. At least 90 days of the leave must be taken by each parent, and the leave can be taken until the child turns 12 years old.

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Vacation and Annual Leave (paid time off)

In Sweden, employees are entitled to a minimum of 25 days of paid annual leave per year. The leave should be taken during the calendar year and cannot be carried over to the following year. Employers may offer additional vacation days as part of the employment contract or collective bargaining agreement.

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Sick Leave

Employees in Sweden are entitled to paid sick leave if they are unable to work due to illness or injury. The employee must provide a doctor's certificate if they are absent from work for more than seven consecutive days. The length of paid sick leave depends on the length of employment, but can be up to 364 days over a 15-month period.

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Other Leave

Other types of leave that may be available to employees in Sweden include study leave, unpaid leave, and compassionate leave. The terms of these types of leave should be outlined in the employment contract or collective bargaining agreement.

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Other Benefits

In addition to the benefits outlined above, Swedish law requires employers to provide additional benefits such as occupational pension schemes, insurance benefits, and workplace safety and health measures. These benefits may be provided through the employer or through a collective bargaining agreement.

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Holiday

Swedish law provides for 13 public holidays per year, including New Year's Day, Epiphany, Good Friday, Easter Monday, May Day, National Day, Midsummer's Eve, All Saints' Day, Christmas Eve, Christmas Day, Boxing Day, New Year's Eve, and the Day of the Epiphany. Employees are entitled to take the day off work and receive their regular pay.

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Taxation

The tax and social security system in Sweden is designed to provide a high level of support for citizens while also ensuring that the costs are shared fairly among the population. While the tax rates are relatively high compared to other countries, the system provides a range of benefits and services that are intended to promote social welfare and economic stability.

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Personal Income Tax

Sweden has a progressive income tax system, with rates ranging from 32% to 57%. The tax rates are determined by the amount of income earned, with higher earners paying a higher rate of tax. In addition to the standard income tax, there is a local income tax that varies between municipalities and a state payroll tax that is paid by the employer.

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Social Security

Sweden has a comprehensive social security system that provides benefits such as healthcare, unemployment benefits, and pensions. The social security system is funded through employer and employee contributions, which are based on the employee's income. The employer contributes a fixed percentage of the employee's salary, and the employee contributes a smaller percentage. The total contribution rate varies depending on the type of social security benefit.

The social security system in Sweden also includes a system of earned income tax credits, which can help to reduce the tax burden for lower-income earners. The earned income tax credit is calculated based on the individual's income and is intended to provide additional support to low-income households.

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Visas and Foreign Workers

General Information

If you are a non-EU/EEA national, you will need a work visa to work in Sweden. Here are the general requirements and procedures for obtaining a work visa:

1. Find a job: To apply for a work visa in Sweden, you will need to have a job offer from a Swedish employer. The employer will also need to apply for a work permit on your behalf.
2. Apply for a work permit: Once you have a job offer, your employer will need to apply for a work permit on your behalf with the Swedish Migration Agency. The application will include information about your job, your qualifications, and your employer.
3. Wait for a decision: The processing time for a work permit can vary depending on the type of job and other factors. In general, it can take several months to receive a decision on your application.
4. Obtain a visa: Once your work permit is approved, you will need to apply for a visa to enter Sweden. You will need to submit your passport, a copy of your work permit, and other documents to the Swedish embassy or consulate in your home country.
5. Arrive in Sweden: Once you have obtained your visa, you can travel to Sweden and begin working for your employer.

It's important to note that the application process for a work permit can be complex, and it may be helpful to work with an immigration lawyer or other professional to ensure that your application is complete and accurate. In addition, it's important to be aware of the requirements for maintaining your work permit, such as staying employed and following the terms of your employment contract.

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