Taxation, social security and compliance across the Nordic countries and the Øresund region
An employee may live in Sweden, work for a Danish employer and spend most working days in Denmark.
Another may live in Denmark, work in Sweden and occasionally work from home.
A third may divide their working time regularly between both countries.
They may travel the same bridge – but their tax, social security and payroll positions can be very different.
The assessment may depend on:
✓ Where the employee lives
✓ Where the work is physically performed
✓ How much work is performed from home
✓ Where the employer is established
✓ Tax residence
✓ Social security coverage
✓ Salary, bonus, pension and equity
✓ Danish or Swedish payroll obligations
✓ A1 documentation
✓ Danish and Swedish expatriate tax regimes
✓ Posted worker requirements
The important question is not simply where the employee is employed.
It is how the complete employment arrangement works across both countries.
A decision to work from home in Sweden may affect social security coverage.
A change in the number of working days in Denmark may affect taxation.
A change in social security may affect payroll and employer contributions.
A bonus, pension contribution or equity award may need to be allocated between the countries.
And an arrangement that worked when the employment began may no longer be compliant when the employee’s working pattern changes.
Cross-border compliance therefore needs to follow the actual working pattern – not only the employment contract.
Denmark and Sweden have a long history of cross-border employment, and specific tax rules may apply to employees working across the Øresund.
For some employees, the Øresund rules can provide a more practical tax treatment when part of the work is performed from home or elsewhere.
But the tax position cannot be considered in isolation.
The employee’s social security position must be assessed separately, and the rules do not necessarily follow the same thresholds or principles.
This is why a working pattern can be acceptable from a tax perspective while creating a different result for social security.
We assess both sides before the working arrangement is established.
Cross-border employees may in some situations qualify for special tax treatment.
An employee living in Sweden and working for a Danish employer may, subject to the relevant conditions, qualify for taxation under the Danish expatriate tax regime.
Living in Sweden does not in itself prevent the regime from applying.
However, working patterns, remuneration, employment structure and other requirements must be considered before the employment begins and monitored during the employment.
Employees living in Denmark and working in Sweden may in certain circumstances qualify for the Swedish expatriate tax regime.
Eligibility and application deadlines require careful planning, and the tax regime must be considered together with the employee’s Danish tax position.
For Danish residents working abroad, Section 33A may in certain circumstances provide relief from Danish taxation.
The employee’s travel pattern, periods abroad, presence in Denmark and actual working days are decisive.
Special tax regimes can create significant benefits – but only when they fit the complete cross-border employment structure.
Tax residence does not determine social security coverage.
An employee may be taxed in one country while remaining socially insured in another.
For employees who regularly work in both Denmark and Sweden, the distribution of working time – including home working – can determine which country’s social security legislation applies.
This affects more than employer contributions.
It may affect:
✓ Healthcare coverage
✓ Pension contributions
✓ Parental benefits
✓ Sickness benefits
✓ Employer social security contributions
✓ A1 documentation
For employers, determining the correct social security position should therefore be part of establishing the employment arrangement – not something addressed afterwards.
How Relocare brings it together
We work across both Denmark and Sweden and coordinate the employment structure from both sides of the Øresund.
Our specialists assess the interaction between:
This allows us to identify conflicts between the different rules before they become a problem.
Cross-border employment cannot be divided into separate tax, payroll and social security questions.
A decision in one area may change the position in another.
Relocare combines the disciplines and assesses the employment from both the Danish and Swedish perspective.
Relocare operates in both Denmark and Sweden.
We understand the legislation, authorities and practical processes on both sides of the Øresund and coordinate the complete cross-border employment situation.
For the employer, this means one coordinated process rather than separate advice in two countries.
Whether your employee lives in Sweden and works in Denmark, lives in Denmark and works in Sweden, or divides their working time between both countries, we help establish a structure that works across tax, social security, payroll and employment.
