The employee benefits for sole proprietors

What employment benefits can a sole proprietor utilize?

As a sole proprietor, you cannot offer yourself the same tax-free employee benefits that a limited company can provide to its owner and employees. However, many expenses that support well-being and work performance are deductible in the business taxation for sole proprietors. The key is that the expenses must have a clear connection to the business activities in order to be accepted as tax deductions.

Utilize at least these benefits:

• Occupational Health Services
• Training and Professional Development
• Home Office Deduction and Ergonomics
• Business Travel Expenses
• Exercise and Well-being (if they are connected to your work)

Even though you may not be able to offer yourself benefits in the same way as salaried employees, you can optimize tax deductions and invest wisely in your well-being.

Here’s an overview of the benefits you can utilize and the conditions attached to them.

1. Sports and culture benefit

As a sole proprietor, you cannot provide yourself with the tax-free Edenred Virike benefit, which is an exercise or cultural benefit. However, you can deduct exercise and cultural expenses in your taxes if they are part of your business activities.
 
How does this work?

• If physical fitness is an essential part of your business (e.g., a fitness instructor or a contractor), you can deduct exercise expenses as part of your business costs.
• If you use exercise to maintain your work capacity, you may attempt to deduct it partially, but the Tax Administration will assess on a case-by-case basis whether it is acceptable. 

2. Wellbeing benefit

As a sole proprietor, you can arrange Wellbeing benefit for yourself and deduct its costs as business expenses. Occupational health care can cover, for example, health examinations, physiotherapy, and general practitioner services.

Occupational health care is only deductible if it is organized to maintain work ability, not for general health care purposes.

 
3. Bike benefit

Unfortunately, the company Bike benefit is not available for sole proprietors, as you cannot be an employee of your own company. Instead, you can purchase a bicycle in the name of the business if it is primarily used for work-related purposes (e.g., client visits).

4. Lunch benefit

As a sole proprietor, you cannot utilize the lunch benefit in the same way as employees, but you can deduct the costs of work meals purchased during workdays for tax purposes if they are related to business trips.

 
5. Training and development ppportunities

Business-related courses, seminars, and training are deductible expenses. This is one of the best benefits to invest in, as developing skills can bring direct advantages to your business.

6. Home office deduction and ergonomic tools

If you work from home, you can claim a home office deduction for tax purposes. Additionally, ergonomic furniture, such as a standing desk or office chair, can be deducted as business expenses if they are related to your business activities.

 
7. Business travel and travel expenses

You can deduct mileage allowances or actual costs for using your own car if it is used for business-related travel. Public transportation tickets for business trips are also deductible.

Would you like more information on how to take advantage of employee benefits and tax deductions as a sole proprietor? Feel free to ask for advice!