Outsource vs In-House Payroll – Which Is Right for You?

Öresundsbron

When it comes to payroll in Sweden, companies face a key decision: Should you manage it internally or outsource it to a payroll provider?

The right choice depends on your business size, internal resources, and how much risk you're willing to carry. Below, we break down the pros and cons of each approach to help you make an informed decision.


In-House Payroll: Control and Responsibility

Advantages:

  • Full control over payroll timing and processes

  • Direct access to employee data and internal systems

  • Easier to customize if you have complex internal agreements or systems

  • May feel more secure for companies with established HR teams

Challenges:

  • Requires deep knowledge of Swedish payroll regulations

  • Time-consuming to manage monthly reporting, taxes, and employee questions

  • High risk of compliance errors without dedicated expertise

  • You carry all the responsibility — including legal and financial penalties

In-house payroll makes the most sense for large companies with experienced payroll staff and strong internal routines.

Outsourced Payroll: Accuracy and Efficiency

Advantages:

  • You get access to payroll specialists who know Swedish laws

  • Reduces internal workload — no need to manage payslips or tax reports manually

  • Lower risk of errors and penalties

  • Scales well as your team grows

  • Often includes digital portals for employees (time reporting, payslips, etc.)

Challenges:

  • Less internal visibility (depends on the provider)

  • Onboarding and handover take some initial time

  • You depend on another party to meet deadlines — though most providers have SLAs in place

Outsourcing is often the best option for foreign companies, startups, or small teams without a full HR/payroll department.

Which Should You Choose?

Here are a few guiding questions:

  • Do you have internal expertise in Swedish payroll and tax law?

  • Can your current team handle reporting, compliance, and recordkeeping reliably?

  • Do you expect headcount to increase soon — and need a scalable solution?

  • How important is internal control vs. risk minimization?

If compliance, time savings, and reliability are your priorities — outsourcing is often the smarter choice.

Looking for a payroll partner in Sweden?
We offer reliable payroll services with full compliance, local expertise, and digital tools.



Before you continue, let me briefly tell you about the photo featured in this article.

This is the Øresund Bridge – the iconic connection between Malmö, Sweden, and Copenhagen, Denmark.
Opened in July 2000, it’s part of the fixed link that includes an 8-kilometer bridge, a 4-kilometer tunnel, and an artificial island in between. The structure physically joins two countries, two legal systems, and two labor markets.

Since the opening, a special intergovernmental agreement has regulated how tax and social security are handled for cross-border workers.

  • If you live in Sweden and work in Denmark (or vice versa), double taxation is avoided through a Nordic tax treaty, but you’re generally taxed in the country where you work.

  • There are also rules for remote work: if you work more than 25% from your home country, you may become socially insured there instead.

  • Labor laws differ between the two nations, so employers must know which country’s rules apply, based on where the work is physically performed.

The Øresund Bridge has enabled tens of thousands to commute across borders daily, but it’s also highlighted the complexities of international employment – from payroll to pensions.

Öresundsbron