Independent measurements of radiation, sensible and latent heat fluxes and the ground heat flux are used to describe the annual cycle of the surface energy budget at a high-arctic permafrost site on Svalbard. During summer, the net short-wave radiation is the dominant energy source, while well developed turbulent processes and the heat flux in the ground lead to a cooling of the surface. About 15% of the net radiation is consumed by the seasonal thawing of the active layer in July and August. The Bowen ratio is found to vary between 0.25 and 2, depending on water content of the uppermost soil layer. During the polar night in winter, the net long-wave radiation is the dominant energy loss channel for the surface, which is mainly compensated by the sensible heat flux and, to a lesser extent, by the ground heat flux, which originates from the refreezing of the active layer. The average annual sensible heat flux of -6.9 W/m**2 is composed of strong positive fluxes in July and August, while negative fluxes dominate during the rest of the year. With 6.8 W/m**2, the latent heat flux more or less compensates the sensible heat flux in the annual average. Strong evaporation occurs during the snow melt period and particularly during the snow-free period in summer and fall. When the ground is covered by snow, latent heat fluxes through sublimation of snow are recorded, but are insignificant for the average surface energy budget. The near-surface atmospheric stratification is found to be predominantly unstable to neutral, when the ground is snow-free, and stable to neutral for snow-covered ground. Due to long-lasting near-surface inversions in winter, an average temperature difference of approximately 3 K exists between the air temperature at 10 m height and the surface temperature of the snow.