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Wellness Allowance 2023 – which Regulations Apply?

Yoga, spinning, padel, or perhaps a punch card at the masseuse’s. Increasingly more workplaces offer wellness allowances to promote the employees’ health and strengthen the employer brand. But how do the rules work in practice? What amounts apply, and which activities are approved? We’re summarizing the rules for wellness allowance 2023.

To begin at the right end – what does wellness allowance constitute, and what can it be used for? Firstly, wellness allowance is an attractive job benefit where employers can (but don’t have to) give their employees the possibility to practice exercise and benefit from health care of lesser value. It can also be offered for activities without elements of movement that are stress-reducing or relaxing, such as massage. For the activity to be considered a tax-free benefit, it must be offered to every employee on equal terms.

Most commonly, the employee hands in a receipt for the activity and is reimbursed for the cost by the employer. It is also increasingly common that the employer signs an agreement with a wellness portal where the employee orders the preferred service and then pays with the wellness allowance directly via the portal.

What Amounts Apply?

Secondly, there is the question of how big or small the wellness allowance amount can be. This is up to every employer to decide. The Swedish Tax Agency has, however, set a limit of 5000 SEK for the allowance to remain tax-free. As an employer, you can choose a higher amount, but in this case, the employee will be taxed for the full wellness allowance.

For activities without elements of exercise, such as massage, there is a maximum limit of 1000 SEK per occasion for it to be tax-free.

Which Activities Are Approved for Wellness Allowance 2023?

In the past, the Swedish Tax Agency used to publish a long list of approved activities from A to Ö – something that they now have decided to lay off. The problem was that the list could easily be perceived as a complete record of which activities were approved or not, which wasn’t the intention. At the same time, keeping the list up to date was challenging since new activities constantly appeared or changed names.

From the year-end of 2021/2022, it is instead up to each employer to decide which activities should be offered as a wellness allowance. However, the same rules still apply – that the activity should be “of a simpler nature and lesser value.”

Most sports and activities with exercise meet the regulations of the Swedish Tax Agency, but a few examples of activities that are covered by the wellness allowance in 2023 are:
– ball sports
– golf
– horseback riding
– sailing
– gym pass and individual gym workout
– yoga, massage, and acupuncture
– ski pass
– apps and online services for activities such as yoga, weight loss, and smoking cessation.

A few examples of what is not approved are:
– membership fees
– theory courses
– diplomas
– medical care
– beauty treatments

Source: The Swedish Tax Agency

How About Equipment?

Yoga mat, new running shoes, or dumbbells… If an employee wants to spend their wellness allowance on equipment – are they allowed to? The short answer is: no. The ground rule is that the wellness allowance can only be used for the activity itself and not for the equipment needed to exercise it, and this rule applies whether it refers to equipment you purchase or rent.

But there are some exceptions. If the equipment is part of the mandatory cost for an activity, it is indeed covered by the wellness allowance. In bowling, the shoes and the bowling ball are examples of this.

Many Good Reasons for Investing in Wellness Allowance

As an employer, promoting exercise and wellness has several benefits: it strengthens the employer brand, makes the employees feel and perform well, and reduces sick leave.

In fact, studies show that every Swedish crown (SEK) that goes into wellness allowance gives more than four SEK back – in the shape of reduced sick leave and increased effectivity. The best results come from companies that work strategically, long-term, and with measurable and specific goals. For example, many employers follow up on the development of sick leave numbers to get a receipt that the wellness allowance investments have generated results.

Do you want to be able to monitor the company’s sick leave over time and effortlessly compare it between different departments? With the dashboard in Flex HRM, managers and HR have a perfect tool for sick leave statistics and other key figures. Everything is practically and intuitively arranged with pie charts, graphs, and gauges with green/yellow/red lights. All it takes is a few button clicks, and you’ll finish a previously time-consuming procedure in only a few seconds. Do you wish to know more about the advantages? Please get in touch with us!