Christmas Gifts – Taxation regulations for Employers

Christmas gifts to employees may be exempt from tax provided certain conditions are met. For 2025, the tax-free limit is SEK 550 including VAT.

Tax Exemption for Employees

A Christmas gift is tax-free for the employee if:

• The gift is provided to all employees or a broader group of employees

• The market value of the gift does not exceed SEK 550

• The gift is not provided in cash, vouchers, or gift cards that can be exchanged for cash

• Gift cards that cannot be redeemed for cash may qualify as tax-free

If the value of the gift exceeds SEK 550, the entire value of the gift becomes taxable.

These rules also apply if you are employed by your own limited company. However, sole traders are not considered employees and therefore cannot receive tax-free Christmas gifts from their business.

Donations to Charitable Organisations

Instead of providing a Christmas gift, an employer may choose to make a donation to a charitable or non-profit organisation.

For the donation to be tax-free for the employee, the employee must not have influenced the choice of recipient. In such cases, the donation is not tax-deductible for the employer.

If the employee has influenced the choice of charity or has chosen to donate in lieu of receiving a Christmas gift, the value of the donation is treated as salary. The employee will be taxed accordingly, and the employer must pay employer social security contributions.

Deductibility for Employers

As a general rule, salaries, benefits, and other compensation paid to employees are tax-deductible for the employer, regardless of whether the benefit is taxable for the employee. This also applies to Christmas gifts.

If a Christmas gift is taxable, the employer is required to pay employer social security contributions.

Christmas Gifts for Customers

Christmas gifts to customers are generally not tax-deductible, due to a general prohibition on deductions for gifts. An exception applies to gifts to employees.

However, tax deductions may be allowed in the following cases:

• Representation gifts: deductible up to SEK 300 excluding VAT, provided the gift is given in connection with a representation event close to the Christmas period

• Promotional gifts: deductible up to SEK 300, provided the gift is of low value, non-personal in nature, and typically branded with the company’s name or logo