Partnering with YellowFin in Sweden: Tailored Payroll Solutions for Modern Business Needs

Introduction

Navigating payroll solutions in Sweden can be challenging, especially for contractors and businesses unfamiliar with local regulations. In this article, we explore two primary solutions: the Employed Solution or Employer-Of-Record (EOR) and the Swedish Limited Company (AB). Understanding the nuances of each option can help you make an informed decision that aligns with your business needs.

Employed Solution or EOR with YellowFin

Under the Employed Solution, contractors become employees of YellowFin, our Swedish entity. This approach simplifies the payroll process significantly:

1. Responsibilities of YellowFin: We handle all Social Security Contributions and Income Tax, ensuring contractors receive their NET salary directly in their bank accounts.
2. Payment Schedule: NET salaries are typically disbursed within the first 10 days of the following month.
3. Employee Benefits: Contractors are entitled to standard employee benefits, including holidays, public holidays, and sickness pay for the initial 14 days, covered by the employer.
4. Provisions for Benefits:
   • For contractors with a fixed monthly salary, 25 working days of holidays per year are provided.
   • For those with a daily or hourly rate, a Holiday Pay of 12% is common in Denmark.
   • Public holidays are compensated in the payslip for contractors with a fixed monthly salary.
5. Additional Services: Registration, monthly payroll and payslips, tax returns, de-registration, and Professional Indemnity Insurance (PII) coverage up to €5 million are included.
6. Extra Services: We offer ID06 Cards for construction sites and can sponsor work permits for immigration purposes.
7. Management Fee: The standard management fee for this solution is €550 per month.

Swedish Limited Company (AB)

The AB solution, though more complex and costly, can be more efficient or financially attractive for some contractors. Key aspects include:

1. Registration Process: Setting up an AB can take up to 4 weeks, with backdating from day 1. No extra cost for setup or shutdown is involved.
2. Capital and Tax Requirements: AB requires a share capital of 24,000 SEK and incurs a Corporation Tax of 20.6%. Dividends can be withdrawn annually.
3. Services Provided:
   • Establishment of the AB (excluding business bank account opening).
   • Registration of the contractor as Director of the AB.
   • Comprehensive bookkeeping (monthly, quarterly, and annually).
   • Payroll/Salary processing for the contractor.
   • Individual and Corporation Tax submissions.
   • De-registration and closing of the AB.
4. Standard Fee: The fee for this service is €850 per month.

Conclusion

Choosing between an Employed Solution or establishing a Swedish Limited Company depends on your specific needs and circumstances. Each option offers distinct advantages, from the simplicity and inclusivity of the Employed Solution to the financial attractiveness and autonomy of the AB. By understanding these differences, contractors and businesses can better navigate the complexities of payroll solutions in Sweden.

Reach out to a WhiteFin solution expert and find out how to gain an edge on the competition!

info@whitefinsolutions.com +44 (0) 208 036 3015.

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