Short-time work allowance

To enable the Swedish Tax Agency to assess whether the difficulties are temporary, you must submit financial data that gives a clear picture of the company’s economic development. For example, this could be a compilation of statistics and key figures showing profitability development, debt ratio, growth and order intake. You must be able to show a negative trend that coincides with an unforeseen external event.

You should also be able to demonstrate the likelihood of returning to normal productivity and regular working hours after the short-time work period.

Recently established businesses may find it more difficult to show that their economic difficulties are only temporary. You can therefore base your application on assumptions and forecasts for how your business would have developed if it had not experienced unforeseen financial difficulties.

To be entitled to support as an employer, your financial difficulties must also be serious. This means that the need for a reduction in working hours must be significant, and that without support you would have to make extensive redundancies. Value transfers, such as dividend payments, during or close to the allowance period are clear indications that you do not have serious financial difficulties.

For you to be entitled to short-time work allowance, your financial difficulties must have been caused by circumstances beyond your control, i.e., external events. Such events include sudden drops in global demand, restrictions on important markets and disruptions to supply. They could also include sudden natural or weather events.

You are not entitled to the allowance if you experience difficulties due to the loss of a major order to a competitor, or due to unsuccessful strategic decisions.

In order for you to be entitled to short-time work allowance, the financial difficulties must have been impossible to avoid or anticipate. Reduced results due to predictable economic conditions, seasonal business or normal cycles do not qualify for the allowance.

Customs duties and other barriers to trade may be unforeseen, and thus you may qualify for the allowance. If such trade barriers and reduced results are a consequence of known obstacles or lengthy processes – which in turn may require adaptation by you – you might not qualify.

You must have done everything possible to reduce staff costs before applying for approval for support. Possible measures include changing shift patterns, or letting go non-permanent staff who are not considered essential, such as consultants and temporary staff. However, consultants and temporary staff can be crucial for the business, so an assessment is made in each case.

There are many possible reasons for a decline in a business’s economy. The difficulties may be beyond your control, but it is your responsibility as an employer to try to solve them. Required measures may include contacting employees, customers, banks and financiers. The sooner you familiarise yourself with the difficulties and take action, the more opportunities there will be to solve the economic situation.

• What happens when things start to go less well for a company?

You cannot be granted short-time work allowance if, at the time of application, your business is:

• obliged to draw up a balance sheet for liquidation purposes
• subject to corporate reconstruction
• insolvent

This is because the allowance is only granted to help overcome temporary difficulties.

A balance sheet for liquidation purposes must be drawn up when there is reason to believe that a company’s equity is less than half of its registered share capital, or when it has been demonstrated that the company lacks sufficient assets for full payment of a foreclosure claim.

Insolvency means that a company is unable to pay its debts, and this situation is not just temporary. As a rule, an insolvent employer should be declared bankrupt.

In certain circumstances, a company with payment difficulties may be allowed to implement a corporate reconstruction process as an alternative to bankruptcy.

A prerequisite for receiving short-time work allowance is that you are registered as an employer at the time we assess your application for support. You must also have been registered as an employer three months before the Swedish Tax Agency makes its decision on approval, i.e. during the comparison month.

At the time of assessment, your company must not:

• be disqualified from engaging in business activities (this also applies to individuals with significant influence over the business)
• have arrears of taxes and other charges that have been passed over to the Swedish Enforcement Authority (“Kronofogden”) for recovery

You can only receive preliminary short-time work allowance for employees who:

• were employed by you during the whole or part of the reference month, with at least the same level of working hours as during the month of support
• you were obliged to pay employer contributions for during the month of support, in accordance with Swedish legislation on social security contributions
• are not members of your family

You cannot receive short-time work allowance during an employee’s notice period. You cannot either receive the allowance for periods when an employee has been absent from work, for example due to sickness, annual leave or parental leave.

In your application for preliminary short-time work allowance, you must specify salary, working days, absence, reduction in working hours and calculated support for each employee.

For you to be entitled to support as an employer, each employee’s regular working hours and salary must be reduced according to certain statutory levels:

1. 20% reduction in working hours and 12% reduction in salary
2. 40% reduction in working hours and 16% reduction in salary
3. 60% reduction in working hours and 20% reduction in salary
   

• Legal guidance - regular salary External link.

The terms reduction in working hours and reduction in salary refer to the average reduction during an agreement period.

The minimum reduction in working hours is 20% (level 1), but it is possible to implement a reduction that exceeds 60% (level 3). However, the salary reduction applied must correspond to one of the three levels specified.

To be entitled to short-time work allowance, you must sign short-time work agreements with your employees. You cannot draw up the agreements retroactively; they apply from the date they are signed.

You must also come to an agreement (a collective or written agreement is required) on competence initiatives if you intend to apply for compensation for such costs.

If a collective agreement is in place

If you wish to apply for short-time work allowance, the collective agreement must cover short-time work with the central employee organisation. Where there is a local party, the application of short-time work must be regulated by a local agreement. There is no requirement for a specific number of employees to participate in short-time work.

Contact your employer organisation for more information on how to proceed.

If no collective agreement is in place

If you wish to apply for short-time work allowance, you must sign a written agreement with at least 70% of the employees within an operating unit. The agreed reduction in working hours and salary must be the same for all participating employees.

The following information must be included in the agreement:

• parties to the agreement – employer’s name, corporate registration number and address; employee’s name and personal identity number or coordination number
• employee’s regular gross salary
• agreed level of reduction in working hours and salary
  (the level agreed must be in line with Swedish legislation and be the same for all employees participating in short-time work, i.e. at least 70% of the employees of the operational unit).
• the period covered by the agreement
  (the agreement must cover the period for which the employer is seeking support)
• the date of commencement, i.e. when the agreement was signed.

In your application for preliminary short-time work allowance, you must specify the requested allowance for the month of support for each employee. You calculate this for each agreement period according to the following formula:

Regular salary × reduction in working hours × attendance quota × 0.43 (standard rate of 43%) = preliminary short-time work allowance

Agreement period: days between start date and end date – as specified in short-time work agreements – within the month of support. Several agreement periods per employee can fall within one month of support.

Regular salary: (the salary the employee would normally have received for the month of support) - (the amount above SEK 44,000) - (salary increases relating to the period after the month of comparison)

Reduction in working hours: percentage indicated in the agreement (20, 40 or 60%)

Attendance quota: ((number of regular working days in the agreement period) - (planned absence during the agreement period)) ÷ (number of regular working days in the agreement period)

Standard rate: 43% (33% from the state and 10% from standard-rate employer contributions).

If the employee’s agreement period is shorter than the full month of support, you multiply the calculated allowance by the number of days in the agreement period and divide the result by the number of working days in the month of support.

Once the Swedish Tax Agency has reached a decision on short-time work allowance, your tax account will be credited. The amount will then be paid out to you promptly. It is therefore important that you register a bank account to which the allowance can be paid.

However, the Swedish Tax Agency can only pay out the allowance if your tax account is in credit and there are no blocks on outgoing payments. Any outstanding taxes and charges will be deducted from the amount payable.

When you have been granted preliminary short-time work allowance, you must make a reconciliation on the last day of the third month following the start of an allowance period. You must subsequently make reconciliations on the last day of every third month at the latest. This is called a reconciliation point.

You must then submit a reconciliation statement to the Swedish Tax Agency within four weeks of the reconciliation point.

Example: You receive approval from the Swedish Tax Agency on 15 April and then apply for preliminary short-time work allowance monthly, with April as the first month of support. Your first reconciliation point is the last day of June. The Swedish Tax Agency must receive your first reconciliation statement no later than 28 July. The reconciliation will relate to the months of support April, May and June.

If you do not submit your reconciliation statement on time, the Swedish Tax Agency will issue an injunction.

At the reconciliation, the Swedish Tax Agency will determine your final allowance. For example, the reconciliation might show that you as an employer:

• have received the correct amount of preliminary short-time work allowance
• are entitled to additional support
• are liable to repay all or part of the preliminary short-time work allowance

If your preliminary short-time work allowance as an employer was calculated based on a larger reduction in working hours and salary than was actually applied, you are obliged to pay back the difference between the preliminary and final allowance.

You may be entitled to additional support corresponding to the difference between the preliminary and final allowance if your preliminary allowance was calculated based on a smaller reduction in working hours and salary than was actually applied. Your entitlement must be supported by updated agreements, and you must request additional support in your reconciliation statement.

You are obliged to repay any preliminary short-time work allowance paid for an employee during an agreement period if the average reduction in working hours and salary applied does not correspond to a level of support specified in Swedish legislation or is not in accordance with the employee agreement.

Repayments must be made to a special account specified in the repayment decision notice.

You can apply for compensation for costs, including course fees, validation fees, compensation for trainers, course materials, travel expenses, accommodation and subsistence.

You can apply for compensation for competence initiatives regardless of the sector in which your business operates, and regardless of you employees’ level of experience or education.

For internally arranged competence initiatives, compensation can only be paid for costs directly related to a specific training session. Examples of such costs include course materials and travel expenses. Compensation is not payable on costs for development, educational environments, renting of own premises, or resources that could be used for future training sessions.

You must have applied to the Swedish Tax Agency for preliminary compensation for costs relating to competence initiatives within two calendar months of the end of the last month of support during the allowance period.

The application must include details of each employee participating in a competence initiative, whether arranged internally or externally, and the total cost of competence initiatives. If you as an employer have previously applied for compensation for competence initiatives during the allowance period, you must also specify these costs.

If you have received compensation for competence initiatives, you must make a reconciliation on the last day of the third calendar month following the end of the allowance period. At that date, you must also submit a reconciliation statement to the Swedish Tax Agency. In this statement, you report the costs relating to each employee for whom preliminary compensation has been paid.

At the reconciliation, the Swedish Tax Agency will determine your final compensation. For example, the reconciliation might show that you as an employer:

• have received the correct amount of preliminary compensation
• are entitled to additional compensation
• are liable to repay all or part of the preliminary compensation