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Global PEO and Payroll in Sweden

Sweden offers a sophisticated, highly regulated business environment with robust employee protections and complex statutory obligations. For international employers, navigating Swedish payroll, HR, and tax compliance can be a barrier, especially when local entity setup is not practical.

A Global PEO (Professional Employer Organisation) enables companies to operate in Sweden, paying, managing, and supporting staff without establishing a Swedish company. PEO is the recognised, compliant model for payroll and HR outsourcing in Sweden, distinct from the traditional EOR model.

What Is a PEO in Sweden?

A PEO (Professional Employer Organisation) acts as your administrative HR and payroll partner, managing:

  • Payroll processing and payslips in Swedish kronor (SEK)
  • Local tax withholding and social security contributions (arbetsgivaravgifter)
  • Statutory and collective bargaining agreement (CBA) benefit administration
  • Employee onboarding, employment contracts, and HR documentation
  • Ongoing HR support, policy updates, and compliance monitoring

Key Point:
With PEO, you remain the legal employer, the PEO runs all Swedish payroll, HR, and compliance functions on your behalf.

PEO vs. EOR in Sweden: What’s the Difference?

PEO (Professional Employer Organisation) in Sweden

  • You are the legal employer.
  • PEO manages payroll, statutory employee benefits, and HR admin in Sweden.
  • Ideal for companies with or preparing to set up a Swedish entity, or those wanting to retain full employer responsibility.
  • Fully compliant, widely accepted by Swedish tax authorities and unions.

EOR (Employer of Record) in Sweden

  • EOR is the sole legal employer on paper.
  • In Sweden, true EOR is only compliant when offered by a properly licensed Swedish staffing (bemanning) agency that genuinely employs and leases out the staff.
  • “Global EOR” providers often market EOR in Sweden, but unless they operate as true local employers (not just payroll processors), this carries compliance risk.
  • If the arrangement is challenged, authorities may reclassify the client company as the real employer, exposing you to tax, labour, and immigration liabilities.

Bottom Line:
For most cross-border business needs, PEO is the accepted, risk-free option in Sweden. EOR is rare, regulated, and only appropriate where a Swedish staffing agency is the genuine employer.

Swedish Payroll and HR Compliance: What PEO Delivers

  • Payroll administration: Monthly calculation, payslips, and payment in SEK; all required payroll tax and social security filings.
  • Social security contributions: Employer must pay 31.42% (2025) on all eligible compensation.
  • Employee taxation: Income tax is withheld at source via PAYE; SINK tax (25% flat) applies for some non-residents.
  • CBAs: Most sectors require contracts and benefits that meet or exceed collective bargaining agreement standards, PEO ensures all terms are compliant.
  • Benefits administration:
    • 25+ days’ paid annual leave (statutory minimum)
    • Sick leave, parental leave, and insurances as per Swedish law and CBA
    • Occupational pensions and supplementary benefits as required
  • Documentation and language: Contracts and payslips must be compliant and typically in Swedish; PEO handles localisation and legal updates.
  • HR support: Ongoing leave management, policy changes, union queries, and employee administration.

Who Uses PEO in Sweden?

  • International companies hiring staff before entity setup
  • Subsidiaries and branches needing local payroll/HR expertise
  • Employers transitioning contractors or consultants to direct employment
  • Organisations with both local and expat staff requiring compliant Swedish payroll and benefits
  • Multinationals outsourcing complex HR/payroll functions.

Why PEO for International Employers in Sweden?

  • Legal compliance: Swedish law expects a real, substantive employer, not just a paper arrangement. PEO keeps you fully compliant by making you the actual employer while covering every admin and reporting duty.
  • Union and authority acceptance: PEO is understood and accepted by Swedish unions and tax agencies; non-compliant EOR structures can be scrutinised or challenged.
  • Audit and risk protection: PEO reduces risk of tax audits, reclassification, permanent establishment, and immigration problems.
  • Full local service: Payroll, HR, CBA benefits, and documentation are managed by Swedish experts.

Limitations and What PEO Does Not Cover in Sweden

  • Work permit sponsorship: PEOs in Sweden do not sponsor work permits; employees must have the right to work in Sweden (or be sponsored via a separate, compliant employer entity).
  • No “proxy employment”: PEO is not a way to avoid employer obligations. You remain responsible for day-to-day management and employment relationship.

Frequently Asked Questions

Can I hire Swedish staff with a PEO before I have a company?
Yes, PEO can handle all payroll and HR admin for you, but in most cases, you will need a local registration (or be preparing for one) to be the legal employer. PEO is not a workaround for all licensing/permit requirements.

What about expats or non-residents?
PEO can process payroll and HR for expats, including correct tax handling (PAYE or SINK). Work permit/visa eligibility must be arranged separately.

Is PEO compliant with Swedish CBAs?
Yes. The PEO will ensure all contracts, benefits, and payroll processes are fully aligned with any sectoral or company-level CBA.

How is PEO different from payroll outsourcing?
PEO provides a full HR, payroll, and compliance service, payroll outsourcing may only cover payslips and filings, not full legal and HR admin.

What are the main risks if I use a non-compliant EOR?
Audit, tax reclassification, penalties for unpaid social contributions, possible personal liability for directors, and blocked work/residence permits.

Why Choose Acumen International When You Need to Hire, Pay, and Manage Teams in Sweden?

  • You want to hire quickly and compliantly without a Swedish company:
    We enable you to onboard local or expatriate employees in Sweden within days, handling all contracts, registrations, and mandatory processes, so your team is working legally from day one.
  • You need accurate payroll, every month, without Swedish admin headaches:
    We calculate and pay salaries, deduct taxes, pay social charges, and issue payslips, so you can focus on your business, not Swedish bureaucracy. No missed filings, no last-minute panics.
  • You need contracts and benefits that are actually accepted in Sweden:
    We draft and maintain employment contracts and benefits packages that meet Swedish law and local CBA requirements, protecting you from disputes, misclassification, or union challenges.
  • You want a single partner for everything people-related:
    From onboarding and ongoing HR advice to handling leave, sick pay, and terminations, we provide one point of contact and complete local support for both your managers and your Swedish staff.
  • You need cost clarity and risk control:
    With our Global Payroll Calculator, you see the full cost of hiring in Sweden before you commit, no hidden employer taxes, no surprise liabilities, no vague estimates.
  • You want to build a team, not just process payroll:
    We support you in recruiting, integrating, and retaining staff, with ongoing updates on Swedish law, best practices, and compliance obligations as your business evolves.
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