Maximising Tax‑Free Allowances for Employees on Assignment in Sweden: What HR Needs to Know
When you send employees to Sweden for project work, housing and living expenses can quickly erode budgets. Fortunately, Swedish tax law allows employers to reimburse certain costs tax‑free—but only if you follow strict rules. Understanding these allowances helps HR departments design attractive compensation packages while staying compliant.
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Maximising Tax‑Free Allowances for Employees on Assignment in Sweden: What HR Needs to Know
- October 08, 2025
- Rentaborg Team
- Blog
When you send employees to Sweden for project work, housing and living expenses can quickly erode budgets. Fortunately, Swedish tax law allows employers to reimburse certain costs tax‑free—but only if you follow strict rules. Understanding these allowances helps HR departments design attractive compensation packages while staying compliant.
Conditions for Tax‑Free Reimbursements
To qualify for tax‑free allowances, employees must have dual residence: they maintain a permanent home in another country while staying in Sweden for work. The workplace must be at least 50 km from their permanent home, and the employee must stay overnight at the Swedish location. The tax‑free period starts from the first day of work in Sweden.
Meal and Small Expense Allowances
For the first month of a project, employers can reimburse meals and small personal expenses tax‑free up to a capped amount. According to a Rydoo compliance summary, the maximum tax‑free allowance is SEK 87 per day for employees working in Sweden. This amount covers the extra costs of eating out and incidental expenses, so there is no need for employees to submit receipts. After 30 days, meal allowances become taxable unless they are tied to travel days.
Accommodation Expenses
Housing is often the largest expense for corporate travellers. The tax rules allow employers to reimburse actual accommodation expenses at the second residence without incurring taxable benefits, provided the employee submits receipts or invoices. To simplify this, companies often choose fully furnished apartments in Sweden so that employees can move in immediately with all costs clearly documented.
Travel Home Allowances and Time Limits
Employees with dual residence may also be reimbursed for travel home to their permanent residence. The allowance covers the cost of one round trip per week at the cheapest available fare. Employers must ensure that the distance criteria (minimum 50 km) are met and maintain documentation of travel dates and costs. This travel allowance remains tax‑free for as long as the employee qualifies for the dual‑residence scheme.
Putting It into Practice
To make the most of these allowances, HR teams should:
Document employee eligibility: Keep records showing that the employee maintains a permanent home and that the Swedish workplace is at least 50 km away.
Track timelines: Remember the one‑month limit for meal allowances and the two‑ or five‑year limits for housing. Set reminders to adjust compensation when tax‑free periods expire.
Collect receipts: Require employees to submit invoices for accommodation and travel expenses to substantiate reimbursements.
Educate employees: Provide a simple guide outlining allowable expenses so employees know what to claim.
Conclusion
Sweden’s tax‑free allowances for dual residence can significantly reduce the cost of long‑term assignments, making corporate housing more affordable for employers while keeping staff satisfied. By understanding the rules around meal allowances, accommodation costs and travel home, HR managers can design compensation packages that comply with Swedish tax law and maximise savings. Rentaborg’s dedicated team can help you manage these allowances and provide transparent invoices, ensuring that both your finance department and your employees are happy.
