What Goes Into Payroll Administration?

Gripholms Castle

What Goes Into Payroll Administration?

Collecting Payroll Data

Payroll starts with gathering accurate data:

  • Working hours and overtime

  • Vacation days and leave

  • Bonuses, benefits, or deductions

  • Sick leave or parental leave

  • Time reports (if hourly based)

These data points must be collected and verified before running payroll.

Salary Calculations

Once the data is in, the payroll specialist calculates:

  • Gross salary

  • Income tax (based on the employee’s tax table)

  • Social security contributions

  • Net salary

  • Any other deductions (pension, lunch, transport)

All calculations must comply with current tax codes and labor regulations.

Employer Declarations and Tax Payments

Each month, the employer must:

  • Submit a PAYE declaration to Skatteverket

  • Pay withheld income tax

  • Pay employer contributions (social security)

  • Report any changes, such as new hires or terminations

This is one of the most sensitive steps, as incorrect or late reporting can lead to penalties.

Payslips and Employee Records

Employees must receive a detailed payslip every month. It should show:

  • Salary breakdown

  • Taxes and deductions

  • Net pay

  • Period covered and employer info

Employers must also keep payroll records for several years, in case of audit.

Year-End Tasks

At the end of the year, the employer is responsible for:

  • Summarizing total payments and tax

  • Issuing annual income statements

  • Closing out the payroll year in the system

Some providers offer year-end reports automatically, which saves significant time.

Why Outsource?

Because each of these steps is time-consuming and requires legal accuracy, many companies choose to outsource payroll to specialists in Sweden.

With the right partner, payroll becomes seamless — so you can focus on business, not bureaucracy.



Before you continue, let me quickly tell you about the photo you see.

This is Gripsholm Castle, located by Lake Mälaren in the town of Mariefred.

Built in the 1530s by King Gustav Vasa, it’s one of Sweden’s most iconic Renaissance castles. With its round towers, red brick facade, and scenic lake views, Gripsholm holds centuries of royal history.
Today, it houses the Swedish State Portrait Collection – including paintings of every Swedish monarch and notable figures from the 1500s to today.

The castle also offers a glimpse into Sweden’s early nation-building era, when central administration – and yes, even payroll for soldiers and officials – became more structured under royal rule.

Inside Gripholms Castle