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Social Security / Healthcare / Other Required Benefits in Sweden

1. Legal Framework

There is no overall legislation regarding employee benefits, but there are some statutory provisions that give the right to payment in certain specific areas. For example, the Annual Leave Act entitles employees to vacation pay, the Sick Pay Act prescribes the right to sick pay during periods of sickness and the Employment Protection Act entitles employees to salary and other employment benefits during the notice period.

2. Required Contributions

The employer’s social security contributions, paid in addition to the salary, amount to 31.42 percent (2016) of the employee’s gross salary. These contributions are mandatory and include specific charges, such as, old-age pension, survivor’s pension, fees for health insurance and work injury. The fees constitute parts of the Swedish social security system.

3. Insurances

Except for insurances included in the mandatory employer social security contribution, there is no obligation under the law for the employer to provide the employees with different insurances. However, employers that are bound by collective bargaining agreements are obliged to take out certain insurances, such as, group life insurance (TGL) or work injury insurance (TFA), in addition to the insurances included in the employer social security contributions.

4. Required Maternity/Sickness/Disability/Annual Leaves

The employee is entitled to mandatory sick pay payable by the employer, provided that the employment is expected to continue for more than 1 month or if the employee has been working for more than 14 consecutive days.

The employee may be on parental leave until the child is 18 months. Thereafter, the employee is entitled to leave for as long as he or she receives compensation from the state. In addition to the parental leave, the mother can start drawing parental allowance 60 days prior to the expected birth of the child. The father of the child may also be on paternity leave for 10 working days in connection with the child’s birth.

5. Mandatory and Typically Provided Pensions

The Swedish pension system is based on an income-related pension, premium pension and guarantee pension. The pension system is administrated by the state and financed by employers and employees jointly. The employers’ contribution is paid through the employer’s social security contributions.

In addition to the state pension, the employees usually are entitled to supplementary pension provided by the employer. Employers bound by a collective bargaining agreement are obliged to provide the employees with a supplementary pension. However, for employers not bound by collective bargaining agreements, such additional pension benefits are completely optional.

The predominant pension scheme for white-collar employees in the private sector is the ITP pension plan, which is a supplementary pension plan. The plan includes old-age pension, supplementary old-age pension, disability pension and family pension. The employee’s belongs to ITP-1 (a defined contribution plan) or ITP-2 (a defined benefit plan) depending on the employee’s age. For blue-collar employees the SAF-LO pension plan applies, which is a defined contribution plan.

For more information on these articles or any other issues involving labour and employment matters in Sweden, please contact Robert Stromberg, Partner at Cederquist (www.cederquist.se) at robert.stromberg@cederquist.se
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