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Wellness allowance – good to know for employers


Why offer a wellness allowance? What are the rules and what is classed as a wellness activity? These are just a few of the questions about wellness allowance that we will answer in this article.

The advantages of offering a wellness allowance

As an employer, you are under no obligation to offer your employees any wellness benefits, it is completely voluntary. On the other hand, a wellness offering provides a number of advantages to employer and employee alike. Offering a wellness allowance or wellness activity sends a clear message that you want to make it easier for your employees to participate in health-promoting activities. Wellness offerings can contribute to:

  • Long-term healthy living
  • Improved employee attendance
  • The prevention of work-related stress injuries 
  • Greater employee satisfaction.

What are the rules for a wellness allowance?

According to the Swedish Tax Agency, a wellness allowance is a tax-free employee welfare benefit. For a benefit to qualify as a tax-free employee welfare benefit, it must be of lesser value and offered to all employees.

If a wellness allowance is offered to a select group of employees only, or if the value differs between various groups of employees, all or part of the allowance becomes a taxable benefit. However, the allowance may be differentiated according to part- or full-time employment, for fixed-term positions and for employees paid by the hour who only work on certain occasions.

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Wellness allowance amount

As mentioned above, the wellness activity must be of lesser value to be tax-free, which in practicality means that the wellness allowance must not exceed SEK 5,000. Any amount above this is taxed. The activity must also be of simpler kind and not require advanced equipment or expensive facilities.

For activities without any form of exercise, for example, massage, the maximum cost for the activity is SEK 1,000 per occasion to be considered of lesser value and tax-free. 

The tax exemption only applies to the cost of the activity itself, meaning that the purchase or rental of equipment or accessories for wellness activities is not considered a tax-free benefit. However, it does not include the rental of equipment that’s required and included in the price of the activity, for example, the rental of a bowling ball and shoes.   

What is classed as wellness?

The wellness allowance covers the most common physical exercise and wellness activities. It can be used for simple activities with elements of exercise or treatments for relaxation or to relieve muscle stiffness. It’s also possible to use it for dietary counseling or courses on how to quit smoking. 

Previously, the Swedish Tax Agency had a list of the most common wellness activities included in the wellness allowance. The extensive list has been removed since it could be interpreted that activities not mentioned on the list weren’t included in the allowance.  

The employer’s approach is key

As well as being voluntary for the employer to offer a wellness allowance, it is also completely voluntary for the employee to take up the offer. Achieving change and a healthier lifestyle requires more from the employer than simply offering a financial incentive. Management’s approach is key to whether employees take up the offer. Managers must be part of the wellness initiative by demonstrating and talking about its importance.

Reaching those who find it difficult to get started may require additional support and encouragement in the form of joint activities or by establishing workplace ambassadors to inspire colleagues. Naturally, the greatest benefit is gained by getting employees who do not participate in any form of wellness activity to become physically active and improve their health. Focusing on those who are already keen fitness enthusiasts offers less return on your wellness initiative.

Many ways to motivate

A wellness initiative such as a wellness allowance is just one way to encourage employees to improve and maintain their health. There are, of course, other ways to encourage healthier living. Activities such as seminars on physical exercise, courses on how to quit smoking, health check-ups and so on can also inspire your employees.

Advice within wellness

Azets’s experts have extensive experience in payroll and accounting services and advising companies. Within wellness, we can provide support in both the establishment of new wellness benefits and changes to existing offerings, the preparation of policies, the administrative aspects and more. Please don’t hesitate to contact us for more information about how we can help your company.