Over the past decades, the Arctic has been warming more than any other region in the world with profound socio-economic consequences. One of the key elements for understanding this rapid climate change is the surface energy budget. However, in the Arctic this budget is not consistently described across the various climate models, reanalyses and observation products. Recognising the physical causes of these inconsistencies is highly relevant for improving climate predictions and projections. Here we show that a 5 to 10 °C warm bias of the sea-ice surface temperature in global atmospheric reanalyses and weather forecasts is mainly caused by a missing representation of the snow layer on top of the sea-ice. Due to the low thermal conductivity of snow compared to sea-ice, a thin snow layer reduces the conductive heat flux much more efficiently than sea-ice, and thus insulates the cold atmosphere from the relatively warm ocean.