To successfully implement its business strategy and safeguard its long-term interests, including sustainability, retaining and hiring top-performing employees is imperative. Competitive compensation is vital to ensure long-term success.

As we all know, the COVID-19 pandemic has had a significant impact on the world's economy, though its full impact is still unknown. Businesses have to cut staff, cut salaries, and turned to the government for help in order to preserve cash and remain afloat.

These are some of the measures taken by the Swedish government to provide financial assistance to businesses:

Reduced Employer Contributions for Young People

The government has proposed a temporary reduction in employer contributions from 1 April 2021 to 31 March 2023 for those aged 19-20 years old.

Employers who employ people born between 1998 and 2002 during the year 2021 will be entitled to lower contributions due to the new rules. As soon as you submit your employer declaration, the Swedish Tax Agency automatically calculates your employer contributions.

Parking and Gifts are Temporarily Exempt from Fringe Benefits Tax

Until 31 December 2021, employees who have access to free parking at their workplace are exempt from fringe benefits tax. During this period, employees do not have to pay social contributions for the value of the benefit, nor do they have to pay income tax based on the market value of the parking.

Compensation Scheme

As part of its emergency economic relief and financial assistance package for businesses affected by the COVID-19 pandemic, the Swedish Government has enacted a broad range of new regulations. In a new compensation scheme proposed on 19 January 2021, companies that are temporarily shut down as a result of the COVID-19 Act will receive financial support. In line with the Government's previous announcement, businesses impacted by the COVID-19 Act should receive compensation as a rule.
Moreover, some businesses have gone the extra step by adjusting the compensation practices for their Executive and Board members, mainly by reducing their base salaries and fees.
But things can't keep going this way. Businesses have to incorporate new emerging trends in order to retain and recruit qualified executives.
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