Northern regions have received considerable attention not only because the effects of climate change are amplified at high latitudes but also because this region holds vast amounts of carbon (C) stored in permafrost. These carbon stocks are vulnerable to warming temperatures and increased permafrost thaw and the breakdown and release of soil C in the form of carbon dioxide (CO2) and methane (CH4). The majority of research has focused on quantifying and upscaling the effects of thaw on CO2 and CH4 emissions from terrestrial systems. However, small ponds formed in permafrost wetlands following thawing have been recognized as hotspots for C emissions. Here, we examined the importance of small ponds for C fluxes in two permafrost wetland ecosystems in northern Sweden. Detailed flux estimates of thaw ponds during the growing season show that ponds emit, on average (±SD), 279 ± 415 and 7 ± 11 mmol C m-2 d-1 of CO2 and CH4, respectively. Importantly, addition of pond emissions to the total C budget of the wetland decreases the C sink by ~39%. Our results emphasize the need for integrated research linking C cycling on land and in water in order to make correct assessments of contemporary C balances.