What are employer contributions?

In addition to paying an employee's salary, an employer also pays mandatory employer contributions.

These contributions contribute to important social insurance such as health care, pensions, and social care. By means of the employer's contribution, it can be said simply that the state ensures that the employer contributes to the general welfare.

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Changes in employer contributions for 2024

Previously, there was a reduced employer contribution for young people between the ages of 15 and 18. This reduction was abolished on 1 January 2024. It means the employer contribution for young people is now 31.42%

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Components of the employer contribution

The 31.42% employer contribution is divided into several components, with the general payroll tax forming the largest part.

The contributions included in the employer contribution are:

• Health insurance contribution 3.55 percent
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• Parental insurance contribution 2.60 percent
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• Old age pension contribution 10.21 per cent
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• Survivor's pension levy 0.60 per cent
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• Labour market levy 2.64 per cent
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• Occupational injury rate 0.20 per cent
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• General payroll tax 11.62 percent
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How to calculate the employer contribution:

To calculate the employer contribution you start by summing up all the compensation, gross salary, and the taxable benefits paid to your staff. This fee is not a single cost but collects several charges under it, which together form an essential part of the social safety net in Sweden. The sum of these contributions, as mentioned, represents 31.42 percent of the total gross wages and benefits paid to your employees.

Counting example:

Let's say you have an employee to whom you pay 30,000 kronor a month in gross salary, and that employee also has taxable benefits worth 2,000 kronor per month. To calculate the employer contribution, do the following:

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1. Sum of gross salary and benefits: For an employee with a monthly salary of SEK 30,000 and benefits of SEK 2,000, the total is SEK 32,000.
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2. Calculate the employer contribution: With a 31.42% levy, simply multiply the total (£32,000) by 0.3142 to get the employer contribution.
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3. Results: The employer's contribution will be SEK 10,054.40. The total cost to the employer thus becomes the salary plus the fee, which in this case is SEK 42,054.40.
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Important dates of submission and payment:

Every month, on the 12th, it is time to file the employer's declaration and to pay for taxes and employer contributions. Please note that there are two exceptions: In January and August, this deadline is extended to the 17th. These payments must be made to the tax account of the company.

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Financial support and benefits for employers

VÄXA support

If you run an individual business and are facing your first employment, you can benefit from VÄXA support to reduce your costs. For the first 25,000 kronor of the employee's monthly salary, you only need to pay an old-age pension contribution of 10.21 percent. For wage amounts exceeding this limit, the standard employer contribution of 31.42 percent is added. This support is designed to make it more economically affordable for individual traders to grow and expand by hiring.

The program for start-up jobs

By employing someone who has not been active in the labour market for at least one year, or for people aged between 20 and 25 who have been inactive for at least six months, as well as for individuals who have recently arrived in Sweden, you as an employer can qualify for financial compensation through the new start job programme. The level of compensation varies depending on the background of the employee and can cover the entire employer contribution and sometimes more.

This financial support is available for both fixed-term and permanent employment, and it does not matter whether the employment is full-time or part-time. To take advantage of this opportunity, you as an employer need to apply for a new starting job via The Employment Service for the current candidate. Approval from the Employment Service is required before the employment relationship is initiated.

Regional support for employers

As an employer, you have the opportunity to take advantage of regional support programs that allow you to reduce employer contributions for employees operating in specific geographic areas. This deduction, which amounts to 10 percent of the total contribution base, can maximally reduce your costs by up to SEK 7,100 per employee per month. The aid does not apply to all industries. Read more about the sectors in which the support covers The Tax Agency.

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Conclusion:

With these insights and tools, we hope you feel better equipped to manage employer contributions effectively. Remember to regularly consult the Tax Agency's guidelines or consult an accounting expert and take advantage of the resources offered to ensure smooth handling of your fees.

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