How much does an employee cost in 2026? Calculate total personnel costs step by step
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What does an employee actually cost? The employer's total cost is higher than the agreed gross salary. In addition to salary, a realistic staff cost calculation needs to take into account payroll taxes, vacation costs, pension, insurance, and other costs resulting from the employment.
The most important points in brief: Start with the gross salary. Then add payroll taxes according to the rules that apply to the employee and the payment period. Also, budget for vacation, agreed occupational pension, special payroll tax where relevant, insurance, and other personnel-related items. Calculate each line separately to avoid double-counting costs.
What costs are included in an employment?
| Cost | What should be budgeted? | What determines the level? |
|---|---|---|
| Gross salary | Fixed and variable salary, supplements and allowances | Employment contract and applicable terms |
| Payroll taxes | Taxes on taxable compensation | Age, timing, and any reductions |
| Vacation cost | Vacation pay, supplements, and vacation pay debt | Annual Leave Act and applicable agreements |
| Occupational pension | Pension premiums and associated costs | Collective agreement or pension commitment |
| Insurance and other | Insurance, work clothes, systems, training, and equipment | Industry, risks, and local conditions |
Payroll taxes 2026 – which percentage applies?
The full payroll tax is normally 31.42 percent in 2026 for employees covered by the main rule. However, the tax may differ depending on, for example, age and specific reduction rules. The Swedish Tax Agency (Skatteverket) publishes current tax rates and conditions.
During the period April 1, 2026–September 30, 2027, there is a temporary reduction for certain young people. For eligible age groups, the payroll tax is 20.81 percent on taxable compensation up to 25,000 SEK per calendar month; for compensation exceeding this, the standard tax rate normally applies. Always check birth years and current rules before using the percentage.
A salary budget for 2027 should therefore not copy a general percentage from 2026, but should be updated once each year's rules and conditions have been established.
Example: what does a monthly salary of 35,000 SEK cost?
Assume an employee has 35,000 SEK in gross salary per month and that the full payroll tax of 31.42 percent applies. In this simplified example, no benefits or other taxable compensation are included.
| Item | Per month |
|---|---|
| Gross salary | 35,000 SEK |
| Payroll taxes: 35,000 × 31.42% | 10,997 SEK |
| Subtotal before other costs | 45,997 SEK |
Important: 45,997 SEK is not the complete staff cost. Vacation-related costs, pension, insurance, any collective agreement costs, equipment, and absences can increase the total. Expenses that are already included in the salary base should not be added again.
Calculate staff cost step by step
- Determine staffing: list employees, employment rate (FTE), contract period, and expected start and end dates.
- Budget the salary base: gross salary, variable salary components, irregular working hours (OB), overtime, and taxable benefits where relevant.
- Select the correct tax level: check the Swedish Tax Agency's rules for each person and payment month. Document the assumption.
- Include vacation: calculate current vacation cost according to applicable rules, and ensure items are not double-counted.
- Include pension and insurance: use your actual agreement levels; special payroll tax on pension costs may need to be included.
- Distribute indirect costs: such as recruitment, work clothes, software, training, and personnel equipment when such costs are relevant for the budget decision.
- Follow up budget against outcome: separate price changes, staffing changes, and one-off items to understand the deviations.
Staff cost per year, per hour, and per FTE
For an annual budget, you sum the actual cost items for the year's months and adjust for when staff start or end. When calculating hourly costs, you must distinguish between paid hours and productively available hours. A person working full-time during a calendar year is not productive for all scheduled hours of the year due to, for example, vacation, public holidays, training, and absences.
Example of a decision question: If the company compares a new hire with rented competence, the salary calculation often needs to be supplemented with productive time, flexibility, management, equipment, and risk. Use the same cost definition in both alternatives.
Checklist for a realistic salary budget
- Are the employment rate and staffing plan correct?
- Have salary revisions and variable supplements been included where expected?
- Has the correct payroll tax been applied for each person?
- Is the vacation cost calculated without double-counting?
- Are pension, insurance, and special payroll tax included where needed?
- Are costs for temporary employment and substitutes included?
- Has the budget been updated for next year's rules and assumptions?
- Is there a monthly follow-up and an assigned person responsible for deviations?
Common mistakes
- Counting total staff cost as only gross salary.
- Adding a fixed percentage without checking age and reductions.
- Treating preliminary 2027 assumptions as decided tax rules.
- Mixing pension premiums with special payroll tax or forgetting to separate them.
- Not taking into account employment rate, absence, and actual hours worked.
- Comparing internal hourly cost with consultant price without equivalent conditions.
Common questions about staff costs
Is the payroll tax always 31.42 percent?
No. That is the normal full tax for 2026, but exceptions and reductions apply, for example, to certain age groups. Check the Swedish Tax Agency for current conditions.
Should occupational pension be included?
Yes, if the company pays pension premiums, the cost should be included in the budget. The amount of the pension depends on collective agreements or individual commitments. Also assess any applicable special payroll tax.
Should vacation pay be added on top of the gross salary?
It depends on how the salary and vacation benefits are already calculated. A standard rate added to a base where the vacation cost is already included can lead to double-counting. Follow the Annual Leave Act and applicable agreements.
Can a staff cost calculation be used for a 2027 budget?
Yes, but parameters for payroll taxes, pension costs, salary increases, and other rule-governed items need to be updated so that the forecast is not based on outdated assumptions.
Plan the staff budget in Excel
Mallbutiken's salary budget and staff cost calculation help you collect cost types, staffing, budget/outcome, and documentation in one workflow.
Related guides and templates
- Employment contract – what should it contain according to the Employment Protection Act (LAS)?
- Income budget and income forecast
- Liquidity budget and cash flow forecast
- Salary survey step by step
- Timesheet and time tracking in Excel
- Templates for HR and personnel administration
Authority sources
- Swedish Tax Agency – payroll taxes, tax rates, and reductions
- Verksamt.se – calculate what an employee costs
Updated: October 13, 2026. The examples refer to selected conditions in 2026 and are simplified. The text provides general information, not individual tax, labor law, or accounting advice. Always check law, collective agreements, and current charges.
