Understanding Employer Social Contributions in Sweden.

Vadstena

What Are Employer Social Contributions?

Employer contributions are fees paid by the employer to the Swedish state for every employee. These are separate from the employee’s income tax and are not deducted from their salary.

They finance Sweden’s social safety systems, including:

  • Pension

  • Parental leave

  • Sick leave

  • Health insurance

  • Workers’ injury insurance

  • Unemployment benefits

How Much Do They Cost?

The standard rate for employer contributions is approximately 31.42% of the employee’s gross salary.

The actual rate can vary depending on:

  • The employee’s age

  • Whether the company qualifies for reductions

  • Specific exemptions or incentive programs

Example: For a monthly gross salary of 40,000 SEK, the employer would typically pay around 12,568 SEK in social contributions.

What's Included in the 31.42%?

The standard breakdown includes:

  • Retirement pension (10.21%)

  • Health insurance (3.55%)

  • Parental insurance (2.60%)

  • Survivor’s pension (0.60%)

  • Occupational injury insurance (0.20%)

  • Unemployment insurance (2.64%)

  • General payroll fee (11.62%)

These percentages may change annually based on state budget decisions.

Who Needs to Pay?

Any employer with employees registered in Sweden must pay social contributions. This includes:

  • Swedish legal entities

  • Foreign companies hiring staff who reside and work in Sweden

  • Employers of part-time or remote workers living in Sweden

There are no exemptions based on company size or revenue.

What About Foreign Companies?

Even if you have no legal entity in Sweden, you may still be responsible for employer contributions if your employee lives and works here.

That’s why foreign companies often partner with local payroll experts who manage this correctly from the start — including registration, calculation, and payment to the Swedish Tax Agency.

We Handle the Calculations and Payments

We make sure your employer contributions are:

  • Calculated correctly

  • Reported each month in the PAYE declaration

  • Paid on time to Skatteverket

  • Aligned with any age-based reductions or local rules

You don’t need to follow Swedish legislation updates — we’ll do that for you.

Conclusion: Plan for More Than Just Salary

In Sweden, salary is just part of the cost of employment. Social contributions are significant — and essential. Getting them wrong can lead to underpayment, penalties, and compliance issues.

Let us take care of the numbers so you can focus on building your team.



Before you start reading the next article, let me first tell you a bit about the photo featured below.

This is Vadstena, a picturesque town on the shores of Lake Vättern in central Sweden.
In the 14th century, it became home to Vadstena Abbey, founded by Saint Bridget of Sweden — a center of learning, care, and social responsibility in medieval Scandinavia.

Here, monks and nuns not only preserved religious texts but also cared for the sick, the elderly, and the poor — services funded by landowners, merchants, and even the crown.
In many ways, this laid the foundation for the Swedish tradition of collective responsibility, which lives on today in the form of employer social contributions.

These contributions — for pensions, health insurance, parental leave, and more — are not just taxes, but investments in the well-being of employees and society.

👉 Understanding how these contributions work is essential for any employer operating in Sweden — especially if you value long-term sustainability and employee security.

Vadstena