This chapter explains how working life in Sweden works, and who decides on wages. It also covers tax, a-kassa (unemployment insurance funds), saving, loans and debt.
Public and private sector
The labour market has 2 sectors, meaning parts: the public sector and the private sector. In the public sector, the employer is the state, a region or a kommun (municipality), and the work is paid for with tax money. Teachers, police officers, firefighters, childcare workers and healthcare staff work there, for example. About 30 percent of people in work are in the public sector.
The private sector is companies with private owners, for example shops, restaurants, factories and building firms. It can also be companies working in law, economics and transport. About 70 percent of people in work are in the private sector.
What jobs are available depends on where you live. The big cities have many kinds of companies, for example in trade and services. Smaller towns often have industry, for example steelworks, paper mills and other factories. These are close to the natural resources they need, meaning materials that come from nature.
The parties in the labour market
Someone who employs a person and pays wages is called an employer. Someone who is employed is called an employee. Both sides have their own organisations, known as the parties in the labour market.
An employers' organisation represents employers. For private companies, the largest is Svenskt Näringsliv (the Confederation of Swedish Enterprise). For public workplaces, the largest are Arbetsgivarverket (the Swedish Agency for Government Employers) and Sveriges Kommuner och Regioner, SKR (the Swedish Association of Local Authorities and Regions).
On the employees' side there are trade unions. Many of them belong to central trade union confederations. The largest are Landsorganisationen i Sverige, LO (the Swedish Trade Union Confederation), Tjänstemännens centralorganisation, TCO (the Swedish Confederation of Professional Employees), and Saco, Sveriges akademikers centralorganisation (the Swedish Confederation of Professional Associations). An academic is someone who has studied at university or an institute of higher education.
Trade unions and collective agreements
As an employee, you can join a trade union. The union and the employer negotiate wages, meaning they discuss things in order to reach agreement. The union can also support a member who runs into problems at work.
After the negotiations, the parties sign a collective agreement. The agreement covers pay and working conditions, meaning the rules that apply at work. If a workplace has a collective agreement, it applies to everyone who works there, even someone who is not a union member.
It is not the state that decides wages in Sweden. The parties do that themselves, through negotiation. This way of doing things is usually called the Swedish model.
Laws, contributions and tax
Employees have rights that are protected by law. Some laws deal with working hours. Under arbetsmiljölagen (the Work Environment Act), the workplace must be safe. Rules on annual leave, meaning time off work, are set out in semesterlagen (the Annual Leave Act).
Besides the wage, the employer pays an employer's contribution to the state. This goes towards employees' pensions and sickness insurance.
Anyone who works must pay income tax, meaning tax on wages. Someone who earns more pays more tax. Working without paying tax is called undeclared work, and it is illegal. Everyone with an income must file a tax return every year, meaning show Skatteverket (the Swedish Tax Agency) how much they have earned.
If you become unemployed
Someone who becomes unemployed can get money from unemployment insurance. The money is paid out by an a-kassa. A-kassa funds are run as economic associations.
One requirement is having earned enough from work over a certain period. Since 1 October 2025, it is income that counts, not the number of hours worked. Another requirement is actively looking for work. The money comes from the state and from members' fees.
Personal finances
Personal finances means a person's own money. Income is money you receive, for example wages or benefits. Expenses are what you pay for, for example housing, food and clothes.
In many other countries, wages are lower than in Sweden. Wages are affected by occupation, education, experience and sector. Through social insurance, you can also get money from the state. Examples are pension, sickness benefit and child allowance. Sickness benefit goes to someone too ill to work.
Someone who wants to save can keep money in a bank account. Funds and shares are other ways to save. A share is a small part of a company. In a fund, many people save together.
Loans and debt
When you buy a home or a car, you often borrow money from the bank. Housing has become much more expensive in many parts of Sweden over recent decades. Because of this, many people have a large mortgage, meaning a loan for housing.
Many people pay by credit card, meaning on credit: you get the goods now and pay later. Someone who buys on credit often has to pay high interest, meaning an extra cost for the loan.
The state has an agency that works to make sure debts get paid. It is called Kronofogdemyndigheten, often known for short as Kronofogden (the Swedish Enforcement Authority). Someone with large debts can get help from Kronofogden to sort out their finances. This help is called skuldsanering (debt relief).