You declare employer contributions in a pay as you earn (PAYE) tax return (“arbetsgivardeklaration”). The easiest way to do this is to file a digital PAYE tax return, and to do that, you or your representative must have a Swedish personal identity number and Swedish e-identification.
If you are not able to use the e-service, you can fill in a PAYE tax return on paper instead, and send the form to the address written on it.
If you pay your employees a salary or make other payments for the work they do, you have to pay employer contributions. In most cases, non-Swedish companies must pay employer contributions on the salaries and benefits paid to employees for the work they have done in Sweden. This applies regardless of whether or not the company has a permanent establishment in Sweden.
Employer contributions vary, and are calculated based on the salaries and benefits paid out, among other things. The amount you contribute as an employer is determined according to whether or not your business has a permanent establishment in Sweden, and whether you are obliged to pay a general salary contribution.
If your business has a permanent establishment in Sweden, you have to pay tax in Sweden and are regarded as a Swedish employer in terms of employer contributions and tax deductions. You must pay full employer contributions, including social security contributions and payroll tax.
Non-Swedish employers with a permanent establishment in Sweden must also make tax deductions from payments made to their employees in Sweden. They must declare these deductions and pay them to the Swedish Tax Agency.
If your business does not have a permanent establishment in Sweden, you do not need to pay tax in Sweden. This means that you do not have to pay payroll tax (which is included in employer contributions), but you pay reduced employer contributions instead. Since january 2021 even Non-Swedish employers without a permanent establishment in Sweden must make tax deductions from payments made to their employees in Sweden. They must declare these deductions and pay them to the Swedish Tax Agency
If your business does not have a permanent establishment in Sweden, you can agree with your employees to let them handle the accounting and payment of employer contributions themselves. This is called a social security contribution agreement (“socialavgiftsavtal”).
The obligation to pay employer contributions and the amount of contributions paid may also be partly determined by other circumstances.
There is usually a connection between the obligation to pay contributions for employees, and the social security system that employees should belong to. This means that non-Swedish companies usually only have to pay employer contributions on any payment they make to an employee who is also covered by Swedish social insurance. If an employee belongs to another country’s social security system, you could be obliged to pay social security contributions in that country instead.
There are certain regulations governing which social security system a person belongs to. These are the regulations that apply, in the following order:
The various social insurance regulations have one thing in common: that a person should primarily be covered by social insurance in the country in which they work. One exception to this rule is when an employee is posted abroad for a temporary period. Certain terms and conditions have to be met by the employer and employee in order for a job to be regarded as a posting, and these terms and conditions vary according to the specific regulations concerned.
There is another exception to the general rules for people working within the EU, which is when an employee is working in two or more different countries at the same time for either one or more employers.
If employees are posted from one EU country to another member state, they may – in certain circumstances – be covered by the social security system of the country from which they are sent to work.
Such circumstances include the following:
The idea of following these posting regulations is to avoid an employee having to switch social security systems when carrying out a short-term assignment abroad for their normal employer. Social security contributions must therefore also be paid in the original country of employment throughout the posting period.
Sweden has made special agreements with a large number of countries in relation to social security during postings abroad. These agreements regulate the different countries’ mutual obligations regarding the social security of employees. The agreements also specify which country’s social security system a person is covered by, and in which country an employer has to pay social security contributions.
There is a general rule that applies to the agreements that Sweden has with other countries: employees are subject to the legislation that applies in the country in which they work in terms of the work they carry out there.
If, however, an employee is posted for a limited period of time to the other country that has an agreement with Sweden, the person usually remains subject to the legislation of the country from which the person is posted. This is the case as long as the employee is covered by social insurance in the country from which they are posted immediately before their posting.
If neither EU law nor social security agreements apply, an employee’s social security status is assessed according to Swedish law.
If – as a non-Swedish employer – you post an employee to Sweden for work that is due to last a maximum of one year, this does not qualify as work in Sweden so you do not have to pay employer contributions in Sweden.
If, on the other hand, a posting is due to last longer than one year:
When a person works in two or more different EU countries during the same period, there are various EU regulations governing which country’s social security system the individual is covered by. This is determined according to whether the person has one employer or more. Other potential determining factors include: the place where the person’s employer is based; and the place where the person lives.
If you have an employee who is posted to another EU country under EU legislation, or who is subject to EU regulations on working in two or more member states during the same period:
The certificate is issued by the competent authority of the country in which the employee lives. In Sweden, the certificate is issued by the Swedish Social Insurance Agency.
As an employer, you need to know which tax rules apply to your employees who come to Sweden to work. In most cases, “special income tax” (“särskild inkomstskatt” or “SINK”) – rather than preliminary income tax – applies to any employee who has no significant connection to Sweden, and who stays in Sweden for less than six months. As an employer, you can apply for SINK for your employees.
The tax rate for SINK is 25%, except for athletes, artists and sailors; you should deduct 15% of their earnings instead.
If you do not have a permanent establishment in Sweden, you must deduct preliminary income tax at 30% unless the Swedish Tax Agency has specified otherwise.
Swedish Tax Agency decisions that affect deducted preliminary tax include the following:
Decisions regarding special income tax for non-residents (“SINK”) – If an employee has limited tax liability in Sweden, the Swedish Tax Agency may have reached a decision regarding SINK. You must deduct special income tax at the rate specified by the Swedish Tax Agency. The special income tax rate is usually 25%.
Decisions on changes to preliminary A-tax – The Swedish Tax Agency may have reached a decision regarding a preliminary tax adjustment. Preliminary tax must then be deducted at the specified rate.
A company must declare employer contributions and tax deductions every month after it has paid out salaries or other earned income. Even if you do not have any salaries or benefits to declare, you must enter zero (0) in your PAYE tax return.
You should pay employer contributions into your company’s tax account every month. The money usually has to arrive with Swedish Tax Agency by the 12th of the month following the payment of salary or other earnings.
From 1 January 2021, non-Swedish employers without a permanent establishment in Sweden must deduct preliminary tax from employees’ compensation for work carried out in Sweden. Even if work is actually carried out abroad, it may be classified as work in Sweden if it falls within the scope of the employer’s business in Sweden.
In order to fulfil this obligation, employers must:
Learn more about the changed tax regulations in Sweden and how they might affect you. The first film is an introduction to the second film which contains more detailed information.