top banner image

Travel deductions and new fields in the PAYE tax return

What new rules come into force on January 1st, 2023?

The end of the year is a common date for new rules to come into force. So which new rules can we expect from January 1st, 2023? This article lists the news to keep in mind, including new rules for travel deductions and place of employment fields in the PAYE tax return. 

The employee's place of employment in the PAYE tax return

Over the past months, there have been some twists and turns concerning travel deduction legislation. In June 2022, the then Riksdag decided on a new model for tax deductions for business travel, which was supposed to come into force the following January. As there was a change of government in the autumn of 2022, the new government decided against the new model. Instead, they proposed that the travel deduction should remain in its existing form, but be enforced. A part of the earlier proposed model is still kept, which is to add new fields about the employee's workplace (address and city) in the PAYE tax return. 

The Riksdag voted on this proposal on December 13th, 2023. 

Rules for the employee's place of employment

From January 1st, 2023, employers must monthly report their employee's place of employment in the PAYE tax return. Two new fields are added to the current PAYE tax return, one for address and one for the city, that the employer must fill out. 

Employees can only have one place of employment with their employer (see the primary rule in the list below). If the employee works in more than one location, the employer needs to assess the employee's place of employment based on the following rules: 

  • Primary rule - the place of employment is on the employer's premises, where the employee performs most of the work, for example, office buildings, factories, workshops or stores. 
  • Alternative rule - if the employee switches between different workplaces, the place of employment is where the employee picks up or leaves work material or prepares or finishes their tasks. 
  • Exception - if the primary rule nor the alternative rule is applicable, there might be cases where the employee's residence can count as the place of employment. The requirement is that the employee does not visit the employer's premises regularly and these cases require individual assessment. This rule would be applicable in industries such as construction and consulting. Another exception would be employees that work from home. In that case, there must be an agreement between the employer and employee regarding distance work. Furthermore, this case also requires that the employee doesn't visit the employer's premises regularly. 
  • For members of parliament or other occupational groups mentioned in the legislation, their residence counts as their place of employment. 
  • Temporary employees in societal crises are, in addition to members of parliament, reserve officers, jurors, jury members in court, rent boards, tax boards and tenancy boards. Their place of employment is their own residence. 
  • Seamen - for employees that get their income from working on ships, their place of employment is the ships on which they work. 

Place of employment when working from home or hybrid workplaces 

Today, many companies offer hybrid workplaces where employees can work from home. In December 2021, The Swedish Tax Agency declared that if the employee has the possibility to do most of their work at the employer's premises, that should then be stated as the employee's place of employment. Even if the employee chooses to work more than 50% of their time from another location, it doesn't necessarily mean that they have another place of employment than the employer's premises. To have another place of employment, there must be an agreement between the employer and the employee. The agreement must state clearly that the employee should perform most of the work from another location. 

Increased tax-free allowance for business travel

For business travel by private car, the tax-free allowance is raised from 18,50 SEK per Swedish mile to 25 SEK per Swedish mile. 

For business travel by company car, the allowance is raised to 12 SEK per Swedish mile for both diesel and other fuel cars. Previously, the allowance was 6,50 SEK for diesel cars and 9,50 SEK for cars running on other fuel.

Allowance for electric cars is kept at the current level, which is 9,50 SEK per Swedish mile. 

Look over your travel policy

We encourage you as employers to look over your business travel policy, how the new allowances affect the company's expenses and if you need to adjust the taxable part of the allowance that you pay. Furthermore, make sure that you have routines in place so information about employees' place of employment is managed in a structured and efficient manner.


Do you have any questions about this in your capacity as an employer? Contact us here at Azets. We are experts in payroll administration, HR and accounting and offer advice to companies that need help.