The wellness allowance - key rules to know before the year-end
As an employer, you are not obliged to offer wellness benefits to your employees; it is entirely voluntary. However, providing a wellness allowance offers a number of advantages for both you and your employees. Offering a wellness subsidy or wellness-related activity sends a clear signal that you are committed to supporting your employees in engaging in health-promoting activities. Wellness initiatives can also form an important part of your long-term sustainability strategy.
What rules apply to the wellness allowance?
According to the Swedish Tax Agency, a wellness allowance is treated as a staff welfare benefit that is tax-free for employees. To qualify as a tax-free staff welfare benefit, it must be of low value, be simple in nature, and be offered on equal terms to all employees, regardless of their form of employment.
However, the allowance may be proportioned according to working hours and level of employment. For example, if permanent employees receive a wellness allowance of SEK 5,000, the employer may grant SEK 2,500 to someone who only works six months of the calendar year. Similarly, the allowance can be adjusted proportionately for employees working part time throughout the year. For hourly and project-based employees, the allowance may also be proportioned according to estimated working hours. Employees who are on sick leave or parental leave are still considered part of the workforce and should be assessed based on their ordinary working hours when determining their entitlement to the allowance.
Wellness allowance amounts
For the wellness allowance to remain tax-free, it must be of low value. The total amount may not exceed SEK 5,000 including VAT per calendar year. If this threshold is exceeded, the entire amount becomes taxable.
For activities that do not involve physical exercise, such as massage, the activity may cost a maximum of SEK 1,000 per occasion to be considered of low value and therefore tax-free.
Tax exemption applies only to the cost of the activity itself. This means that the purchase or rental of equipment used to perform the activity is not considered a tax-free benefit. For example, ski passes may be reimbursed through the wellness allowance, but the rental of ski equipment may not.
Handling the wellness allowance at the 2025/2026 year-end
There are a few rules to consider when reimbursing wellness expenses around the 2025/2026 year-end.
- Only costs incurred during the period of employment may be reimbursed tax-free. The documentation submitted by the employee must be dated in 2025.
- A wellness allowance that is not used within the year cannot be carried over to the following year.
What counts as wellness activities?
The wellness allowance covers most common exercise and wellness activities. It may be used for simple exercise-based activities or treatments that reduce stress or alleviate soreness and stiffness. The allowance may also be used for nutritional counselling or smoking cessation support.
Previously, the Swedish Tax Agency maintained a list of the most common approved wellness activities. This comprehensive list has now been removed, as it could be interpreted to mean that activities not included on the list were not approved.
It is the employer’s responsibility to assess whether an activity qualifies as a tax-free wellness activity. Be sure to document any assessments so you can respond to potential questions from the Tax Agency in the event of an audit.
Checklist for the year-end
- Set a deadline for submitting receipts
- Ensure that all employees are offered the benefit on equal terms and that any variations are properly proportioned according to working hours
- Review which activities and types of receipts you accept — avoid gift cards and expenses for equipment hire
Do you need support with payroll and HR matters? Read more about how Azets can assist you here.
