Christmas is around the corner – and maybe you’re thinking it would be nice to show a little extra appreciation for your staff with a holiday gift or a festive dinner? Absolutely! But are you up to speed on what the Swedish Tax Agency has to say on the matter? Let’s break it down.
Christmas Gifts for Employees
As an employer, you can give your employees a tax-free Christmas gift if it’s of “lesser value.” Here’s a quick summary of the amounts and rules you need to keep in mind.
- The general rule is that Christmas gifts for employees are tax-free as long as they don’t exceed a certain value. In 2025, the maximum is SEK 550 (same as last year). If the price tag is higher, the entire gift becomes taxable for the employee from the very first krona.
- Back in 2020, a temporary tax exemption was introduced for employee gifts due to the pandemic (the so-called “corona gift”), which could be combined with the Christmas gift if it hadn’t already been used earlier in the year. That exception is no longer in effect.
- A tax-free gift can basically be anything – with a few exceptions. For example, steer clear of cash or anything that can be exchanged for cash. When in doubt, check the Tax Agency’s website (in Swedish).
- And remember: no unfair Santas allowed! To qualify for the tax exemption, the gift must be given to all employees or to a larger group of employees.
Christmas Dinners and Parties for Employees
’Tis the season – for mulled wine mingle and those gloriously ugly Christmas sweaters. But what does the rulebook say about Christmas buffets and holiday parties for staff?
- The basic rule is simple: both Christmas dinners and parties are considered internal representation and are tax-free for employees.
- You’re only entitled to a tax deduction for what’s considered “simpler refreshments” (think gingerbread cookies, mulled wine, or a light sandwich) costing no more than SEK 60 per person plus VAT. If the food and drink cost more than that, the expense isn’t deductible.
- However, you can deduct VAT on amounts up to SEK 300 per person. In other words: if the meatballs and Christmas ham cost SEK 450 per person, you can deduct the VAT on the first SEK 300.
- Want to hire a DJ or book a venue to really set the holiday mood? Go for it! But (unsurprisingly) there’s also a cap here: ancillary costs are deductible up to SEK 180 per person, excluding VAT.
- We’re all for celebrating at every opportunity – but note that the Tax Agency is less generous: you’re allowed a maximum of two staff parties per year for the event to be tax-free for employees and for the company to be able to deduct the costs.
Good luck with both the gifts and the holiday feast – from all of us at Flex Applications!
Make it easy to get taxes, benefits, and other payroll matters right – with minimal manual work. Our payroll system, Flex HRM Payroll, automates most of the process so you can spend your time on other things. Get in touch if you’d like to know more!
