Social Security

Swedish Social Security

Social Security

The Swedish social security system is a mix of public, corporate and private insurance. The public welfare system covers all Swedish residents equally. Further coverage is agreed by collective bargaining for each sector, while private insurance also exists for individuals or groups.

Established at the beginning of the century and developed during the postwar era, Swedish public social security covers all Swedish residents. It is compulsory and is based on the principle of redistribution. Everyone contributes, but only the disadvantaged receive benefits. Its aim is financial security during the different stages of life and it is financed by contributions and tax. Contributions are mainly paid by the employer and very little by the individual.

The social insurance system covers unemployment, occupational injuries, sickness, handicap, maternity and paternity leave, child allowances and elderly persons. To qualify for social insurance you must be a Swedish resident and for occupation related insurance, be or have been employed in the country. Public insurance is mostly income related, except for unemployment benefit, which is a flat rate.

For unemployment benefit, public social insurance is supplemented by sectoral or company insurance agreed during collective bargaining. Many trade unions offer an Unemployment Insurance Fund which is financed by grants from the government and membership fees. These benefits are income related and offer additional coverage to the flat rate paid by public insurance. Trade union members are usually automatically part of an Unemployment Insurance Fund.

Private insurance plans are also common in Sweden. They can be taken out individually or in a group. Some companies will offer you a private insurance plan.


Taxation is relatively high in Sweden and pays for the three levels of Swedish government: local, regional and central. However, the process is relatively straightforward, as income is taxed at source. Taxation is usually around 30% of income and is both direct and indirect. Taxes are collected by the Swedish Tax Agency. Income tax includes a state tax and a municipal tax. If you work in Sweden for less than six months you can apply for a special income tax rate of 25% (SINK). If you remain for a longer period, you have to follow normal tax rules.

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