Guide

Umbrella employment or sole trader – which suits you?

A straightforward comparison of the two most common ways to start freelancing. This page is for guidance only and is not personal tax or legal advice.

Short answer

Umbrella employment often suits you if you want to try out an idea, take on occasional assignments or prioritise simple admin. An umbrella company invoices the client and pays you a salary after deductions.
Sole trader often suits you once assignments become more regular and you want to manage the business, finances and deductions yourself.

Comparison: umbrella employment and sole trader

The differences are mainly about who invoices the client, who is responsible for tax and contributions, and how much admin you handle yourself.

Getting started and registration

Umbrella employment

Create an account with an umbrella company. No company registration required.

Sole trader

Registered with the Swedish Tax Agency (Skatteverket) and, if needed, the Swedish Companies Registration Office (Bolagsverket).

Who invoices the client

Umbrella employment

The umbrella company invoices in its own name. You find your own assignments.

Sole trader

You invoice the client in the name of your business.

F-tax or FA-tax

Umbrella employment

You don't need your own F-tax (F-skatt).

Sole trader

You normally apply for F-tax approval. FA-tax may apply if you're both employed and running a business.

VAT, tax returns and bookkeeping

Umbrella employment

Handled by the umbrella company.

Sole trader

You're responsible for your own bookkeeping, VAT return (if VAT-registered) and the NE business income form.

Annual accounts

Umbrella employment

No annual accounts required for you.

Sole trader

Annual accounts must be prepared in line with current rules.

Self-employed contributions or employer contributions

Umbrella employment

Employer contributions and preliminary income tax are deducted before your salary is paid out.

Sole trader

You pay self-employed contributions and preliminary tax on the business's profit.

Personal financial liability

Umbrella employment

You're a contractor and aren't personally registered as a business owner liable for the business's debts.

Sole trader

The business isn't legally separate from you – you're personally liable for its debts and obligations.

Expenses and deductions

Umbrella employment

Expenses related to the assignment can be reimbursed according to the company's procedures and tax rules.

Sole trader

You deduct business expenses in your tax return.

Cost model

Umbrella employment

A fee based on the pricing plan you choose with the umbrella company. With Accly Frilans you can check current terms and calculate your cost in the pricing calculator.

Sole trader

Your own costs for bookkeeping, software, insurance and any advice.

Control over the client relationship and business

Umbrella employment

You own the client relationship, but the invoice goes through the umbrella company.

Sole trader

Full control over contracts, invoicing and how the business develops.

When this option usually works best

Umbrella employment

One-off or irregular assignments, testing an idea, minimal admin.

Sole trader

Regular assignments, larger cost deductions and wanting to handle everything yourself.

Comparison between umbrella employment and sole trader
Area	Umbrella employment	Sole trader
Getting started and registration	Create an account with an umbrella company. No company registration required.	Registered with the Swedish Tax Agency (Skatteverket) and, if needed, the Swedish Companies Registration Office (Bolagsverket).
Who invoices the client	The umbrella company invoices in its own name. You find your own assignments.	You invoice the client in the name of your business.
F-tax or FA-tax	You don't need your own F-tax (F-skatt).	You normally apply for F-tax approval. FA-tax may apply if you're both employed and running a business.
VAT, tax returns and bookkeeping	Handled by the umbrella company.	You're responsible for your own bookkeeping, VAT return (if VAT-registered) and the NE business income form.
Annual accounts	No annual accounts required for you.	Annual accounts must be prepared in line with current rules.
Self-employed contributions or employer contributions	Employer contributions and preliminary income tax are deducted before your salary is paid out.	You pay self-employed contributions and preliminary tax on the business's profit.
Personal financial liability	You're a contractor and aren't personally registered as a business owner liable for the business's debts.	The business isn't legally separate from you – you're personally liable for its debts and obligations.
Expenses and deductions	Expenses related to the assignment can be reimbursed according to the company's procedures and tax rules.	You deduct business expenses in your tax return.
Cost model	A fee based on the pricing plan you choose with the umbrella company. With Accly Frilans you can check current terms and calculate your cost in the pricing calculator.	Your own costs for bookkeeping, software, insurance and any advice.
Control over the client relationship and business	You own the client relationship, but the invoice goes through the umbrella company.	Full control over contracts, invoicing and how the business develops.
When this option usually works best	One-off or irregular assignments, testing an idea, minimal admin.	Regular assignments, larger cost deductions and wanting to handle everything yourself.

When umbrella employment works best

With umbrella employment, the umbrella company invoices the client and pays you the compensation as salary, after deducting its fee, employer contributions and preliminary income tax. You don't need your own company or your own F-tax.

You find and agree your own assignments – the umbrella company handles the invoicing and the admin around it. That makes this option common for one-off assignments, seasonal work, or when you want to test an idea before committing.

Read more in our guides invoice without a company and invoice as a freelancer.

When sole trader works best

A sole trader business isn't legally separate from you as the owner. That means you're personally liable for the business's debts and obligations, but it also means you're in full control of the business.

With F-tax, you're responsible for preliminary tax and self-employed contributions on the business's profit. You're also responsible for ongoing bookkeeping, annual accounts and your tax return with the NE business income form. If the business is VAT-registered, you must also submit VAT returns.

This option often becomes relevant once assignments are regular and you have costs you want to deduct in the business.

Three everyday examples

A one-off freelance assignment

You take on an assignment worth a few thousand kronor alongside the rest of your life. Umbrella employment lets you invoice without registering a company and without ongoing admin.

A consultant with recurring clients

You invoice every month and have costs in the business. In that case, a sole trader business can be more suitable, since you get full control and can make deductions in the business.

Employment plus your own business

You have a permanent job and run something on the side. Here, FA-tax may be relevant, since you both receive a salary as an employee and have income from business activity.

How to get started today

Two common routes in. Which one suits you depends on how often you invoice and how much admin you want to handle yourself.

Try umbrella employment

Create an account with Accly Frilans, send your first invoice and get paid as salary. Check fees in our pricing calculator.

Get started for free

Start a sole trader business

Registration and information about this type of business are available at verksamt.se, which is run jointly by Swedish government agencies.

Frequently asked questions

Do I need F-tax as an umbrella employee?

No. With umbrella employment, it's the umbrella company that invoices the client and holds F-tax. You receive the compensation as salary after deductions.

Can I run a sole trader business at the same time as being employed?

Yes, you can combine employment with a sole trader business. In that case, FA-tax may apply, meaning you have both A-tax on your salary and F-tax on the business.

Who is responsible for tax and contributions?

With umbrella employment, the umbrella company deducts and pays preliminary income tax and employer contributions. With a sole trader business, you're responsible yourself for preliminary tax and self-employed contributions on the profit.

Can I make deductions?

As a sole trader, you deduct business expenses in your tax return. As an umbrella employee, expenses related to the assignment are handled according to the umbrella company's procedures and tax rules, but you don't make your own business deductions.

When might it make sense to switch from umbrella employment to a sole trader business?

Often when assignments become regular, when you have larger costs in the business, or when you want to control invoicing, contracts and deductions entirely yourself. What suits you depends on your situation – it's a good idea to check with the Swedish Tax Agency (Skatteverket) or an advisor.

Sources and further reading

Last checked: August 2026

This information is for guidance only and is not personal tax or legal advice. Always check current rules with the Swedish Tax Agency (Skatteverket).