Invoicing allowance as a self-employed contractor
As a self-employed contractor, your assignments may sometimes involve covering expenses, and of course, you have rights when it comes to this. You may be entitled to an allowance, but what does that entail, and how do you actually invoice for it? Here at Cool Company, we’ll clarify how allowances work for self-employed contractors.
What is an allowance?
An allowance is the compensation you, as a self-employed contractor, can receive for expenses incurred during assignments. It is tax-free and applies to full-day, half-day, and/or overnight stays. The rules differ between countries, but in Sweden, the daily allowance rate for the 2024 income year is 290 SEK, and the half-day allowance is 145 SEK.
What is included in an allowance?
To qualify for an overnight allowance, you must spend at least one night more than 50 kilometers away from your residence. For instance, if you live in Stockholm but your assignment requires you to spend two days in Östersund, you may need to stay overnight there, and you’ll receive an allowance for the night spent while traveling and covering accommodation.
An allowance does not need to be declared, but you are also not allowed to make deductions for it. If you want more detailed information about allowances, you can refer to the Swedish Tax Agency (Skatteverket). However, you are also welcome to contact us with any questions or concerns, and we will do our best to answer them.
How do you invoice for an allowance?
Before starting your assignment, it’s a good idea to check whether you’re eligible for an allowance. For example, if you live in central Gothenburg but have an assignment in Kungsbacka lasting several days, the allowance might not apply if you plan to stay overnight there, as it’s not far enough from your home. You must always keep your original receipts and register them to be able to invoice for the allowance for the expenses you incur. This is simply so you can report exactly what you’ve paid for. You can easily register your receipts under “Expenses” when you log in to Cool Company’s website.
Want to get started?
If you’re not already a self-employed contractor but are curious about becoming one, you can create an account and register with us in just a few clicks. It’s completely free, and you’ll be ready to invoice your first assignment.