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An EOR assists businesses in hiring and managing a global workforce, while a PEO provides support for companies with domestic HR and workforce functions where they already have legal entities.

With a PEO, you enter into a co-employment arrangement, meaning you remain the legal employer of your hires and retain responsibility for any legal or compliance issues that arise. In contrast, an EOR becomes the legal employer, assuming full responsibility for your team.

If your focus is on domestic operations, a PEO is a great choice. However, if you’re looking to expand internationally while streamlining HR, payroll, and compliance, an EOR is the ideal solution.

Hiring employees in Sweden comes with several costs in addition to wages. Employers are required to make social contributions, which cover pension fees and health insurance, totaling approximately 31.42% of the gross salary. Holiday pay is typically around 12% of the annual gross salary, and there may also be additional expenses for employee benefits, such as wellness allowances and other health-related perks.

A Professional Employer Organization (PEO) is a company that offers HR services such as payroll, tax, and compliance management to businesses looking to outsource these functions. PEOs typically work with small to medium-sized companies, also assisting in recruiting and onboarding employees.

Key services:

• Employee benefits
• Tax management
• Payroll processing
• Compliance support
• HR administration
• Employee training and onboarding
• Recruiting and hiring
• Employment contracts
• Other HR-related tasks (e.g., complaint management or terminations)
• Co-employment, where employment liabilities are shared with the official employer

It depends on the company’s turnover and reporting period. VAT can be reported monthly, quarterly, or annually, depending on the company’s size and turnover.

The VAT rates vary depending on the goods and services, but the three most common VAT rates are 6%, 12%, and 25%. Output VAT must be reported to the Swedish Tax Agency. The difference between input and output VAT must be reported to the Swedish Tax Agency. The company will either receive a refund or pay the difference to the Tax Agency.