Hobby or business?The page was last modified:
A hobby is an activity that is independent and ongoing but which does not have a profit motive. If you earn money through your hobby, you are required to pay tax on what you earn.
What is a hobby?
A hobby might a handicraft, beekeeping, hunting, fishing, or a cultural activity. A hobby is:
- something you do in your spare time
- not your main source of income
- not work that you do on assignment for someone else.
Income from a hobby is taxed within the income type “paid work” and you pay your own social security contributions.
There is no accounting obligation for a hobby, but you are obliged to keep records. This means that you must save records, bills, and receipts for your tax return.
A hobby does not entitle you to F-tax.
Picking berries and mushrooms is tax-free
You only need to pay tax if, during an income year, you earn more than SEK 12 500 from the sale of wild berries, mushrooms and pine cones that you have picked or gathered yourself.
What is a business activity?
A business activity is an activity that is run independently and on a commercial basis. This means that the activity is to be ongoing, independent and have a profit motive. Unless all of these conditions are met, the activity is generally characterised as income from paid work from a customer or a hobby activity.
When you start a business as a sole trader, you are approved for F-tax. Normally, you will also be deemed to be engaged in an economic activity, in which case you must also register for VAT.
Hobby or business activity?
You cannot choose yourself whether your activity is deemed to be a hobby or a business. A hobby activity may generate a surplus but still lack a profit motive. The line between a hobby activity and an economic activity is sometimes difficult to draw. In many cases, an overall assessment may be required in which all aspects of the activity are considered.
The difference between a hobby and an economic activity has nothing to do with quality, but is about how you will be taxed.
Different types of income
An activity is taxed based on one of the types of income recognised in Swedish tax law:
- business activity
- paid work.
It is important that you are taxed according to the correct type of income in relation to how deficits are treated, and for the calculation of social security contributions.
If you generate a surplus from your hobby activity, this is taxed as paid work. You pay your own social security contributions in the form of self-employed person’s social security contributions (egenavgifter). If your activity is run on a commercial basis and is independent, it is taxed as income from a business activity.
Responsible: Swedish Agency for Economic and Regional Growth