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Employment-based benefits

Having a job is a form of security in itself. But in Sweden you can expect much more as an employee, from paid parental and sick leave to employment-based pension and optional unemployment insurance, all based on your salary.

Sick leave payment

Except for your first day away from work, sick leave pay in Sweden typically amounts to 80 percent of your salary. Your first sick day is the waiting period (karensdag), which means that you do not receive any payment for this day. Your employer will pay for your sick leave for 13 days, following the waiting period. If you are on sick leave for more than seven days, a doctor must attest this.

After this time the Swedish Social Insurance Agency (Försäkringskassan), rather than your employer, compensates you, usually with around 80 percent of your total salary. After 180 days on sick leave, you are only entitled to sickness benefit if you cannot carry out any work at all on the regular labor market. You can apply for sickness benefits for a maximum of 364 days during a 15-month period.

On top of Sweden’s sick leave system, there is also a preventive system in place to keep employees active and healthy. Employers often sponsor gym memberships, and some employees are even entitled to use one hour of working time per week for exercise.

Parental leave

Parental leave is a central part of Swedish family life, making it possible to have children while continuing your career. Leave is paid for 480 days, shared between mother and father, and amounts to a large portion of your usual salary. 60 days are reserved for each parent. This is mainly to encourage equality and shared responsibility. Fathers (or the other parent) are also entitled to 10 extra paid days of leave when the child is born.

The Swedish parental leave system is quite flexible. Parents can choose to be off work for extended periods, single days or parts of days. Time off can even be saved and used at any time from 60 days before the expected delivery date until the child reaches the age of eight.

Parental allowance is taxed like other income and counts toward pensions. For 390 of the 480 days, the amount is the same as for sickness benefit: 80 percent of benefits-based income, depending on how much you earn. The maximum parental allowance is SEK 935 a day (2012). For the remaining 90 days, the allowance is SEK 180 a day in the case of children born on July 1, 2006, or later; otherwise the allowance is SEK 60. If you happen to be sick during parental leave, you are still entitled to your usual paid sick leave, which is handled separately from your parental leave days.

Unemployment pay

If you lose your job, and are a member of an insurance program, you have the right to unemployment benefits linked to the pay from your previous job. However, it is your responsibility to become a member of an unemployment insurance program (arbetslöshetskassa). These insurance programs are administered by the trade unions. Your fees and benefits will depend on your field of work and on the insurance program you choose.

While Sweden’s unemployment insurance programs are relatively generous, they are designed to cover your living expenses while you find a new job. To be eligible for such benefits, you have to be actively looking for a new job and willing to apply for jobs suggested by the Public Employment Service (Arbetsförmedlingen).

Since this pay is limited to a very basic level, it can be a good idea to join a union, which can provide additional insurance more closely matched to your previous salary. Whichever insurance you choose, there are limits to how long you are entitled to claim unemployment benefits. The payments you receive are taxed in the same way as a normal working salary.

Employment-based pension

Throughout their working life, all employees in Sweden earn income pension. In addition, many employers make extra monthly payments to a so-called occupational pension, which is based on collective agreements. Most Swedish residents also invest in private pension savings.

The Swedish pension system is often pictured as a pyramid, with your basic income pension forming the base of the pyramid, your employer contributions in the middle and any personal pension savings plans you choose at the top. As mentioned, many employers contribute to your occupational pension, but make sure to ask your employer about the agreements at your particular workplace. These contributions, and the interest earned, are added to your pension savings every year.

Although it is guaranteed by the state and funded partly by employer contributions, part of your pension, called premium pension, is in your control. It is held in a personal account, which you can choose to place in any of a number of market-based pension funds.

Illustration: Business Sweden

You can also choose when you would like to retire, with some people retiring as early as 55 years of age. Income pension and premium pension, however, can only be drawn from the age of 61.

Regardless of when you retire, the total amount of your pension remains the same. If you choose to go into early retirement, you should therefore be aware that your monthly payments will be reduced accordingly. It is also possible to keep working beyond the normal retirement age of 65.