diff --git a/packages/js/src/executors/swc/schema.json b/packages/js/src/executors/swc/schema.json
index 7ee3c69b39ca9..8914c39400f15 100644
--- a/packages/js/src/executors/swc/schema.json
+++ b/packages/js/src/executors/swc/schema.json
@@ -38,7 +38,13 @@
     "swcExclude": {
       "type": "array",
       "description": "List of SWC Glob/Regex to be excluded from compilation (https://swc.rs/docs/configuration/compilation#exclude)",
-      "default": ["./src/**/.*.spec.ts$", "./**/.*.js$"]
+      "default": [
+        "./src/**/.*.spec.ts$",
+        "./**/.*.spec.ts$",
+        "./src/**/jest-setup.ts$",
+        "./**/jest-setup.ts$",
+        "./**/.*.js$"
+      ]
     }
   },
   "required": ["main", "outputPath", "tsConfig"],
diff --git a/packages/js/src/executors/swc/swc.impl.ts b/packages/js/src/executors/swc/swc.impl.ts
index a5380c699c310..873afa161d338 100644
--- a/packages/js/src/executors/swc/swc.impl.ts
+++ b/packages/js/src/executors/swc/swc.impl.ts
@@ -1,4 +1,4 @@
-import { ExecutorContext } from '@nrwl/devkit';
+import { ExecutorContext, logger } from '@nrwl/devkit';
 import {
   assetGlobsToFiles,
   FileInputOutput,
@@ -18,6 +18,7 @@ import { watchForSingleFileChanges } from '../../utils/watch-for-single-file-cha
 
 function normalizeOptions(
   options: SwcExecutorOptions,
+  layoutDir: string,
   contextRoot: string,
   sourceRoot?: string,
   projectRoot?: string
@@ -38,15 +39,21 @@ function normalizeOptions(
     outputPath
   );
 
+  const projectRootParts = projectRoot.split('/');
+  // We pop the last part of the `projectRoot` to pass
+  // the last part (projectDir) and the remainder (projectRootParts) to swc
+  const projectDir = projectRootParts.pop();
+  const swcCwd = projectRootParts.join('/');
+
   const swcCliOptions = {
-    projectDir: projectRoot.split('/').pop(),
-    // TODO: assume consumers put their code in `src`
-    destPath: `${relative(projectRoot, options.outputPath)}/src`,
+    srcPath: projectDir,
+    destPath: relative(join(contextRoot, swcCwd), outputPath),
+    swcCwd,
+    swcrcPath: join(projectRoot, '.swcrc'),
   };
 
   return {
     ...options,
-    swcrcPath: join(projectRoot, '.swcrc'),
     mainOutputPath: resolve(
       outputPath,
       options.main.replace(`${projectRoot}/`, '').replace('.ts', '.js')
@@ -81,9 +88,20 @@ export async function* swcExecutor(
   _options: SwcExecutorOptions,
   context: ExecutorContext
 ) {
-  const { sourceRoot, root } = context.workspace.projects[context.projectName];
-  const options = normalizeOptions(_options, context.root, sourceRoot, root);
-  options.swcrcPath = addTempSwcrc(options);
+  const { sourceRoot, root, projectType } =
+    context.workspace.projects[context.projectName];
+  const layoutDir =
+    projectType === 'library'
+      ? context.workspace.workspaceLayout.libsDir
+      : context.workspace.workspaceLayout.appsDir;
+  const options = normalizeOptions(
+    _options,
+    layoutDir,
+    context.root,
+    sourceRoot,
+    root
+  );
+  options.swcCliOptions.swcrcPath = addTempSwcrc(options);
   const { tmpTsConfig, projectRoot } = checkDependencies(
     context,
     options.tsConfig
diff --git a/packages/js/src/utils/schema.d.ts b/packages/js/src/utils/schema.d.ts
index 3bc3b89f6d375..3fa8af2dbb0ef 100644
--- a/packages/js/src/utils/schema.d.ts
+++ b/packages/js/src/utils/schema.d.ts
@@ -52,15 +52,16 @@ export interface SwcExecutorOptions extends ExecutorOptions {
 }
 
 export interface SwcCliOptions {
-  projectDir: string;
+  srcPath: string;
   destPath: string;
+  swcrcPath: string;
+  swcCwd: string;
 }
 
 export interface NormalizedSwcExecutorOptions
   extends NormalizedExecutorOptions {
   swcExclude: string[];
   skipTypeCheck: boolean;
-  swcrcPath: string;
   swcCliOptions: SwcCliOptions;
 }
 
diff --git a/packages/js/src/utils/swc/compile-swc.ts b/packages/js/src/utils/swc/compile-swc.ts
index 9ed34f7b7c504..df24f4d6ae603 100644
--- a/packages/js/src/utils/swc/compile-swc.ts
+++ b/packages/js/src/utils/swc/compile-swc.ts
@@ -2,16 +2,15 @@ import { ExecutorContext, logger } from '@nrwl/devkit';
 import { cacheDir } from '@nrwl/workspace/src/utilities/cache-directory';
 import { exec, execSync } from 'child_process';
 import { createAsyncIterable } from '../create-async-iterable/create-async-iteratable';
-import { NormalizedSwcExecutorOptions } from '../schema';
+import { NormalizedSwcExecutorOptions, SwcCliOptions } from '../schema';
 import { printDiagnostics } from '../typescript/print-diagnostics';
 import { runTypeCheck, TypeCheckOptions } from '../typescript/run-type-check';
 
 function getSwcCmd(
-  normalizedOptions: NormalizedSwcExecutorOptions,
+  { swcrcPath, srcPath, destPath }: SwcCliOptions,
   watch = false
 ) {
-  const srcPath = `../${normalizedOptions.swcCliOptions.projectDir}`;
-  let swcCmd = `npx swc ${srcPath} -d ${normalizedOptions.swcCliOptions.destPath} --source-maps --no-swcrc --config-file=${normalizedOptions.swcrcPath}`;
+  let swcCmd = `npx swc ${srcPath} -d ${destPath} --source-maps --no-swcrc --config-file=${swcrcPath}`;
   return watch ? swcCmd.concat(' --watch') : swcCmd;
 }
 
@@ -40,8 +39,8 @@ export async function compileSwc(
 ) {
   logger.log(`Compiling with SWC for ${context.projectName}...`);
 
-  const swcCmdLog = execSync(getSwcCmd(normalizedOptions), {
-    cwd: normalizedOptions.projectRoot,
+  const swcCmdLog = execSync(getSwcCmd(normalizedOptions.swcCliOptions), {
+    cwd: normalizedOptions.swcCliOptions.swcCwd,
   }).toString();
   logger.log(swcCmdLog.replace(/\n/, ''));
   const isCompileSuccess = swcCmdLog.includes('Successfully compiled');
@@ -85,9 +84,10 @@ export async function* compileSwcWatch(
       let stderrOnData: () => void;
       let watcherOnExit: () => void;
 
-      const swcWatcher = exec(getSwcCmd(normalizedOptions, true), {
-        cwd: normalizedOptions.projectRoot,
-      });
+      const swcWatcher = exec(
+        getSwcCmd(normalizedOptions.swcCliOptions, true),
+        { cwd: normalizedOptions.swcCliOptions.swcCwd }
+      );
 
       processOnExit = () => {
         swcWatcher.kill();
diff --git a/packages/js/src/utils/versions.ts b/packages/js/src/utils/versions.ts
index 7ad7d62e67e2c..a3f35b44926b8 100644
--- a/packages/js/src/utils/versions.ts
+++ b/packages/js/src/utils/versions.ts
@@ -1,7 +1,5 @@
 export const nxVersion = '*';
 
-export const swcCoreVersion = '1.2.118';
-
-export const swcCliVersion = '~0.1.52';
-
-export const swcHelpersVersion = '~0.2.14';
+export const swcCoreVersion = '~1.2.143';
+export const swcCliVersion = '~0.1.55';
+export const swcHelpersVersion = '~0.3.3';