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Why Sweden doesn’t have a minimum wage and how to ensure you’re fairly paid

New arrivals to Sweden are often told how generous the country's working hours and benefits are, so it may come as a surprise that there's no minimum wage as such.

Why Sweden doesn't have a minimum wage and how to ensure you're fairly paid
Large pay rises are unusual in Sweden, so follow these tips to ensure you're happy that your starting salary is fair. Photo: Lieselotte van der Meijs/imagebank.sweden.se
This article is available to Members of The Local. Read more Membership Exclusives here.

Most countries in Europe have some sort of minimum wage in place, after the first laws on minimum legal pay were implemented in New Zealand and Australia in the 1980s.

In Sweden however, there is no official minimum wage.

That doesn't mean salaries go entirely unregulated. Instead, they are agreed by negotiations between the employer and either the individual employee or a trade union which represents them (or often, both).

Trade unions agree collective bargaining agreements (kollektivavtal) which apply to different industries. These usually include minimum pay levels for different jobs within the industry, which might differentiate between employees with different levels of education. They usually require employers to conduct an annual performance and salary review, as well as an annual pay rise of at least around 2.5 percent.

The agreements cover other aspects of your working life beyond salary, which can have a big impact on your take-home pay and quality of life, so it's well worth finding out if your employer or prospective employer has one, and what it includes.

For example, a typical kollektivavtal will include provisions for overtime pay, pensions, sick pay and parental leave, vacation allowance. There are also often extra benefits such as training or 'fitness benefit' (friskvårdsbidrag) which is an annual sum of money you can spend on sport- or health-related expenses, like a gym membership or sports club.

Photo: Lieselotte van der Meijs/imagebank.sweden.se

As well as in kollektivavtal, another situation in which minimum wages apply is for third-country workers in Sweden. If you want to move to Sweden from a non-EU country for work, you must have an offer from a job that will allow you to earn a minimum of 13,000 kronor per month before tax. This is extremely important for self-employed people to be aware of. There have been several high-profile cases of successful entrepreneurs being deported from Sweden after choosing not to take a salary and instead investing the money back into their business and living off personal savings or a partner's salary, for example.

For many full-time work permit-holders, though, another of the requirements is more pertinent when it comes to salary. In order for a work permit to be approved, the employer must be offering the prospective worker a salary “that is at least on par with that set by Swedish collective agreements or which is customary within the occupation or industry”.

Around 90 percent of employees are covered by a kollektivavtal, but some companies, especially smaller businesses and startups, choose not to use them.

So when you're interviewing, how can you be confident if the wage you're being offered is fair?

If you're a member of a union, you'll have access to their salary statistics which give detail about the average pay for people in your industry. You can find out the market rate for someone in a similar position to you, in a similar location and with a similar level of experience and responsibility. 

Some unions will also offer advice over the phone or by email so that you can get help reviewing an employment contract or preparing for your salary review.

And even if you're not a union member, a lot of useful data is publicly available.

Websites such as Alla Studier, Lönestatistik, and SCB offer information on average salaries, which you can break down by length of experience, location, and education level. But be aware of any extra factors which can affect salaries in your industry, such as professional qualifications or language skills which might be a requirement to reach the higher end of the band. 

If you're at a larger company with a clear hierarchy and structure, it may well be possible to have a frank discussion with the hiring manager (for a new job) or your line manager (if you're already employed). Many companies have salary bands for different positions, and you can ask questions like what the salary band for your current position is, what you would need to do to be qualified for a higher level within the band, or what your options for career progression within the company are.

Something else to be aware of is that large pay rises are unusual in Sweden unless you're changing position, so it's best only to agree to a salary you're completely happy with, rather than settle for something lower and hope you'll be able to increase it later.

Member comments

  1. I think there is a typo here. The first minimum wage laws were passed in Australia and New Zealand in the 1890s, not the 1980s.

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For members

ENERGY

EXPLAINED: When should I turn on my heating in Sweden this year?

Energy costs in Sweden are set to reach sky-high levels this winter, which will leave many people wondering when they should start heating their homes. Here's what you need to bear in mind.

EXPLAINED: When should I turn on my heating in Sweden this year?

What’s happening?

As a result of supply stoppages for cheap Russian gas affecting energy prices on the European market – particularly in Germany – energy prices in Sweden have been at record levels for months, especially in the two energy price zones in the south of the country.

With winter looming and no sign of things getting cheaper anytime soon, private individuals are starting to cut down on energy usage as much as they can to slash their bills this season.

Does it make a difference what type of accommodation I live in?

The right time to start heating your home depends on several factors including your own personal preference, the weather, whether you live in rented accommodation or own your own property, and on the age and features of the property you live in.

How does the heating system work in Swedish homes?

More than half of all houses and commercial properties in Sweden use district heating or fjärrvärme, with this number rising to around 90 percent for apartment buildings.

This system distributes hot water from heating plants to houses and apartments through underground water pipes, meaning that heating sources are centralised, rather than individual houses or apartments having their own heating source.

In smaller towns and in houses, district heating is less common, and it’s these households who can benefit the most from waiting longer to turn on their heating.

Do I control my heating?

It depends. If you live in a rented apartment or a bostadsrättsforening (co-operative housing association) with district heating, your landlord or the board of your housing foundation will usually decide for you when to turn your heating on.

Unlike other countries, Sweden has no official legal heating season, with heating in bostadsrättsföreningar usually switched on automatically following periods of cold weather, no matter which date they occur on.

This will usually be designed to provide an indoor temperature of around 21 degrees – you can turn your radiators down if you feel this is too warm, but you won’t usually be able to turn them up if you want the temperature to be warmer.

The Public Health Agency recommends temperatures of between 20 and 24 degrees indoors, with temperatures lower than 18 degrees in apartments posing a health risk.

Temperatures lower than 14 are not recommended as they can cause condensation and mould growth on walls and furnishings, which, again, are a health risk, and can cause permanent damage to properties.

Can I save money by waiting to turn my heating on?

Again, it depends. If you’re renting and you pay varmhyra – rent with heating included – then you won’t save money directly, but heating your home wisely could make it less likely for your landlord to raise your rent to cover increased heating costs.

If you pay kallhyra – rent without heating included, then waiting to turn on the heating will save money on your electricity bill.

Similarly, in some housing associations, electricity and heating costs are included in your monthly fee, meaning you pay your share of the heating costs for the entire building ever month. In this case, your energy costs are more affected by how much energy everyone else in your housing association uses than your individual usage.

On the other hand, this doesn’t mean you shouldn’t care about how warm your heating is – if you have your heating on full-blast for the whole winter, your costs will increase as well as the costs of all of your neighbours, and if the entire association’s energy costs increase substantially, the board may decide to raise the monthly fee or avgift for everyone in the building to cover this.

If you pay an individual energy bill based on your own household’s usage, and not on an average of the whole building, it could pay to wait before you switch on your heating.

How else can I save money on heating costs?

Turning your heating down a couple of degrees can make a big difference to your heating costs, but you can also save money on heating and make your property feel warmer by making it more energy effective.

There are a few easy ways to do this, according to the Swedish Energy Agency.

Firstly, make sure your house is well insulated, not just your doors and windows, but also in the loft: a large amount of a building’s heat escapes through the roof. This also applies to the boundaries between well-insulated and poorly-insulated areas.

If you have a cellar or conservatory, for example, which is not heated and not insulated, make sure the door between this room and the rest of the house is well-insulated with no gaps around the doorframe where heat can escape into the colder room. 

In a similar vein, locate any drafts and do what you can to block them, either with draft excluders or by replacing worn-out draft excluder strips on old doors and windows.

You can also benefit from thinking about how you furnish your home – furniture placed in front of radiators mean it is harder for warm air to circulate, and you can keep your house warmer at night by closing your curtains or blinds to keep eat from escaping through your windows.

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