Payroll for Small Teams – What You Still Need to Get Right.

Falun Copper Mine

Running a business with only a handful of employees doesn’t mean payroll is simple. In Sweden, even the smallest companies are subject to the same laws, tax rules, and reporting obligations as larger organizations.

Here’s what small teams need to get right when it comes to payroll — and what’s often missed.

1. You Still Need to Register as an Employer

Even if you only have one employee, you must:

  • Register with Skatteverket as an employer

  • Submit monthly PAYE tax declarations

  • Withhold and pay income tax and employer contributions

  • Provide payslips and keep accurate records

There are no shortcuts based on company size.

2. Timing Matters

In small businesses, payroll is often handled by the founder or someone without formal training. But missing a reporting deadline — or paying salaries late — can have serious consequences, including fines and employee dissatisfaction.

Make sure you have:

  • A clear payroll schedule

  • A system for tracking worked hours and leave

  • A backup in case the responsible person is sick or away

3. Know What to Include in the Payslip

Each payslip must show:

  • Gross salary

  • Income tax and deductions

  • Employer name and period covered

  • Net amount paid

Employees have the right to understand their pay — and you have a legal obligation to provide full transparency.

4. Don’t Forget About Vacations and Sick Pay

Even for small teams, you must:

  • Calculate and pay vacation pay correctly (usually 12%)

  • Handle sick leave reporting and sick pay compensation

  • Follow collective agreements, if any apply

Many small business owners forget that these are statutory rights — not optional perks.

5. Outsourcing Might Be More Efficient Than You Think

For small teams, outsourcing payroll can actually save money. Instead of spending hours on manual calculations or worrying about compliance, you can hand it over to experts and focus on running the business.

Digital payroll tools often come with employee portals, time tracking, and automatic payslip generation — even for companies with just 1–5 staff.

Conclusion: Small Doesn’t Mean Simple

No matter your size, payroll in Sweden must be done correctly. Getting it wrong can lead to tax issues, frustrated employees, and wasted time.

Running a small team in Sweden?
We handle payroll for startups and small businesses — without the complexity or hidden costs.





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

This is the Falun Copper Mine – a UNESCO World Heritage Site and one of Sweden’s most legendary industrial landmarks.
Operations here began over 1,000 years ago, and for centuries, it was one of Europe’s leading sources of copper.

Despite the massive output, the mine was run by small, highly specialized teams, each with clearly defined roles.
Their success came not from size, but from structure, precision, and deep local knowledge – just like payroll for small teams today.

💡 Fun fact: The red pigment produced from the mine's iron-rich slag became known as Falu Rödfärg – the traditional deep red paint seen on cottages all across Sweden.
Originally popular among farmers who wanted their wooden homes to look like brick manors, it later became a national style symbol.
So in a way, this mine didn’t just shape Sweden’s economy – it painted the countryside too.

Falun Copper Mine