If you’ve been looking for a lower sugar cream cheese frosting that still tastes like the real deal, this is it. Creamy, tangy, and so delicious I could eat it with a spoon! This is a simple and classic recipe; perfect for frosting carrot cake, spice cake or banana cake.

As much as I love classic cream cheese frosting, I don’t love consuming that much sugar. Of course, I don’t generally eat baked goods with cream cheese frosting on a daily basis! Still, when I set out to make a healthier carrot cake, I knew I wanted to pair it with a healthier cream cheese frosting as well.
Basically, I wanted all the flavor of classic cream cheese frosting but with less sugar. Going in, I knew I wanted a reduced-sugar version but not necessarily a completely sugar-free version. I’ve found that including some regular sugar in the frosting helps me cut down on sugar while keeping the classic taste and texture.
I wouldn’t necessarily say this is “healthy” cream cheese frosting, but it’s definitely a healthier one.
Low Sugar Cream Cheese Frosting
If you love classic cream cheese frosting but want to try reducing the sugar content, read on. You might find that you will also enjoy this version. Honestly, I would be hard-pressed to notice a difference in flavor in this reduced sugar frosting compared to the classic recipe.
Just like classic cream cheese frosting, this has 4 simple ingredients and comes together quickly. It holds its shape nicely, although like any cream cheese frosting, it will soften fairly quickly at room temperature. I wouldn’t recommend leaving a frosted layer cake out for hours, since cream cheese frosting isn’t very stable at room temperature.

About This Recipe
I used a classic cream cheese frosting recipe and just swapped out some of the sugar. Other than that, it’s pretty much a traditional cream cheese frosting. This means the texture is soft and spreadable, perfect for frosting cakes or cupcakes.
Of course, being a traditional cream cheese frosting, it also means this is not the frosting to use in warm temperatures. You’ll want to refrigerate any baked items frosted with cream cheese frosting, bringing them to room temperature about an hour or so before serving.
This is also not the best frosting for piping large swirls or detailed decorations. For that, it would be best to use a stable buttercream.
Ingredients

Key Ingredients
Cream cheese: I used full fat brick-style Philadelphia brand cream cheese. I have found full fat is important for the best results when making cream cheese frosting. Definitely don’t use the tub cream cheese as it won’t work properly.
Butter: I use salted butter in pretty much all my baking. This means I don’t add extra salt to my frosting. If you want to use unsalted butter, that will work fine but you’ll add about 1/4 teaspoon salt along with the other ingredients.
Sweetener: This is where you get to choose what you use depending on your own preferences and nutritional requirements. I used 2 cups powdered xylitol and 1 1/2 cups regular powdered sugar. I found this to be a good level of sweetness and texture. Next time, I might even reduce to 1 cup regular powdered sugar and 2 cups xylitol for a total of 3 cups of sweetener.
Of course, the easiest way to make cream cheese frosting lower in sugar is simply to use less of it. If you prefer a less sweet frosting, feel free to adjust the sweetener amount to your liking. I’d say the minimum is about 2 cups total, whether you’re using powdered sugar or a powdered sugar-free alternative. Just keep in mind, with less sweetener the frosting will be a bit looser. It should still work well for a sheet cake, but will not hold up as nicely for stacking a layer cake.

The sweetener gives bulk and thickness to the frosting so you want to add at least enough to get the texture you want. I’ve heard of other methods of thickening cream cheese frosting, such as adding corn starch, milk powder, or instant clear jel. I haven’t personally tried any of those methods but if you want to add less sweetener, they might be worth exploring.
I didn’t have powdered xylitol on hand, so I just added granulated xylitol to my Vitamix and blended until it was a fine powder. I then measured the amount needed. The result wasn’t quite as fine as store-bought powdered sugar but it worked perfectly. My frosting was smooth and the texture was perfect without any grittiness whatsoever.
Just a quick note: xylitol is not safe for pets. This is actually one of the main reasons I don’t use it more often in my baking. Of course, I don’t feed my pets any of these treats, but using xylitol just requires extra caution to avoid spills or accidents. I used xylitol in this case because it has a very clean flavor in frostings, and it worked perfectly.
You can use other sugar-free sweeteners such as allulose, Lakanto Monk Fruit Sweetener, or Swerve. Most come in powdered forms you can use as is or you can buy the granulated and run it through the blender before using. Some of the options are more cost effective if you buy granulated and powder your own.
Flavoring: The traditional choice is vanilla extract, which works beautifully. I sometimes like to use Fiori di Sicilia extract in my cream cheese frosting and that’s what I used here. It’s definitely not a must have for cream cheese frosting but I love it for so many things (it’s amazing in whipped cream!) that I always have it on hand. A little bit goes a long way so if you buy a bottle, it will last for years!
Instructions




This recipe comes together very quickly. You can make this in a stand mixer if you like or use a handheld mixer.
Step 1: Beat butter until light and fluffy and a bit lighter in color.
Step 2: Add cream cheese and beat just until smooth.
Step 3: Add powdered sugar and/or sugar-free powdered sweetener in three or four parts and beat just until incorporated each time.
Step 4: Once all sugar has been incorporated, beat for another minute or so until light and fluffy. Avoid overbeating!
If frosting is too soft, refrigerate for 15-20 minutes before using and it will firm up nicely.
NOTE: It’s important to beat just as much as necessary. If you overmix, the cream cheese will break down and you’ll end up with a soupy mess. Ask me how I know!

FAQs
Can I use only sugar-free sweetener and no regular sugar at all?
Yes, though the flavor and texture will be slightly different. Some sugar-free sweeteners can have cooling aftertastes or behave differently in frosting, so test as you go. You might find just a bit (perhaps 1/4 cup) regular sugar helps the taste and texture be more on point. However, if you can’t have any regular sugar, you can definitely use only sugar-free sweetener.
Can I make this frosting ahead of time?
Yes! You can make it up to 4-5 days in advance. Realistically, the frosting will be good up to the best-by dates on the butter and cream cheese. Store it in an airtight container in the refrigerator, then let it sit at room temperature for 20–30 minutes. Blend with a spatula or spoon to restore consistency before spreading.
Can I freeze cream cheese frosting?
Yes, you can. I have done this so I know it works but the texture can change slightly after thawing. If you do freeze it, thaw in the fridge and then beat it again briefly to restore smoothness. Although the texture might be a touch different, it will still taste delicious.
Other lower sugar recipes you might enjoy:

Low Sugar Cream Cheese Frosting
Ingredients
- 8 tablespoons (1 stick) butter room temperature
- 1 (8oz) package brick-style cream cheese room temperature
- 2 teaspoons vanilla extract or 1/2 teaspoon Fiori di Sicilia
- 3-3 1/2 cups powdered sugar or sugar-free powdered sweetener
Instructions
- Beat butter until smooth and slightly lighter in color.
- Add cream cheese and extract (vanilla OR Fiori di Sicilia) and beat just until smooth.
- Add the sugar in three parts and beat on slow until incorporated.
- Beat for one more minute on medium until light and fluffy.
- Do not overbeat or the cream cheese will break down and the frosting will become thin and runny.
- Once done, if frosting is too soft, refrigerate for about 20-30 minutes to firm up slightly before frosting the cake.
- Refrigerate the cakes or cupcakes once frosted. Bring to room temperature about an hour before serving.
Notes
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